When you are going to reform something, the goal is to change it to something better. It is to reshape or correct something. It comes in cycles. We see it in the financial industry through Wall St. and the many government regulations. Policies, rules, regulations, laws, etc. all drive reform. What is the catalyst to reform? To go in the opposite direction by deregulating, removing regulations to let the market take over. On today’s show, I am going to be discussing and explaining what innovation reform is.
Does innovation need reforming? Can something as nebulous as innovation be changed? The reason that this issue bothers me is due to the misuse of innovation, done in a whole variety of ways. Innovation tends to have minimized support financially. What is the proper role that innovation plays in our daily lives? We tend to view innovation as the new shiny gadget from Apple, Dell, or HP.
The reality is that innovation plays a much more significant part of our daily lives. It’s the continuous role of innovation solving issues such as healthcare, education, politics, etc. It allows us to share ideas globally uniting us rather than dividing us. Back to my fundamental question. Does innovation need reforming? If so, what approach should minimize? Should more regulation or other incentives be applied? Or is there another completely different approach?
3 Key Areas of Innovation Reform
What is wrong with innovation that requires reforming? I believe there are three critical areas that we, as innovators need to be thinking about:
- Presenting Misleading Information – People have presented innovation in a misleading way to investors and the public. Ex. Theranos promised to do blood tests with a single drop of blood. They were installed into Walgreen’s stores and provided false information misleading their customers.
- Academic Research Retracted – There has been a growing number of retracted academic research in the last few years. It is so common that somebody created a website to track retractions for the public’s use.
- Knowingly Faulty Products Released – Innovators releasing products they know are faulty. Ex. Boeing knew that their 737 Max had issues and still released it.
- Small to Large Companies – I’ve seen this happen from small startups to large companies. Rather than doing their R&D, they take an idea from another company. It’s all about avoiding the need to do R&D and to save money.
- Employees misappropriating IP – People have downloaded IP from a previous employer and take it to a new employer.
Lack of Transparency
- There is an apparent lack of transparency when it comes to investment returns. Instituting GAP created a balance and to compare companies. The balance does not exist in innovation. This issue of a lack of transparency has been one of my most frustrating areas. How a company looks at it is entirely different from company b. It becomes hard to attach intangible value related to innovation.
How do we address these innovation reform issues? What are the best ways to address these issues? What do we as a society do to encourage innovation to solve the challenges we are facing?
How to Initiate Innovation Reform
How do we reform unethical innovation, stolen IP, transparency?
Here are my proposals:
- Establish a Code of Ethics – I propose that we establish a code of ethics similar to what the medical field has. Define an oath for innovation so engineers and project managers etc. recognize that the use of innovation for good or bad is just like in medicine. The Hippocratic oath for innovation would be 1. Do no harm. 2. Protect IP as an employee and employer. 3. Be transparent with research and test results.
- Disincentivize Investing in the Unethical – What happens when someone violates this oath? When doctors break theirs, they lose their license to practice medicine. For innovators, there needs to be more than the standard issued punishment. So how would you keep investors from backing violators of the oath? For innovators, there is a need for money to create products and services. The best way to deal with this is to punish investors by taking away their tax benefits, such as capital gains. Use whatever mechanism that applies to where you live to disincentivize investors from backing unethical people. Another privilege I would take away is the option to declare bankruptcy.
- Loss of Tax Credits – This would incentivize organizations to boost their R&D spend, rather than stealing IP. If you do the right thing, the government should encourage you to increase your R&D.
- New Set of GAP Reporting Requirements – These would give insight into the value of innovation created by the organization. These would include bad patents canceled/retracted, innovation premium, and intangible value of innovation. We want to encourage innovation investment through transparency. We need more innovation. Are there areas you would like to see reformed? What are those areas?
Five Minutes to New Ideas
My grandfather had an old saying when I was growing up, “never burn a bridge.” At the time, I thought it was a strange saying, but only later did I realize what he was saying. No matter how bad someone treats you, don’t get angry or retaliate and destroy that relationship. Great leaders keep cool even when the attacker makes it personal.
A president of a large corporation was confronted by an angry employee who stormed into his office and poured out his complaints. The president calmly listened and when the employee stopped, the president said thank you. The president had wisely remained cool like the writer of Proverbs, Solomon. He said, “A gentle tongue is a tree of life.” The person who winds up in charge is someone who can remain calm through intense stress and pressure. Stillness is the most universally outstanding quality of great leaders. Leaders don’t make the best decisions when in the heat of anger. Earlier in my career, I was overseas and saw two truck drivers who came face to face in a narrow street. Neither backed up to let the other go and they yelled and honked at each other. After a few minutes of watching this, I went on to a meeting. After a few hours, I returned to see them in the same place doing the same thing. Nothing happens when anger and emotion overcome reason. Nothing constructive happens. This week on Five Minutes to New Ideas, we need to recognize when we are in the wrong to avoid burning bridges.
Let’s connect; I am on LinkedIn, Facebook, Twitter. If we do connect, drop me a note and let me know. The email address is email@example.com, or you can go to PhilMcKinney.com and drop me a note there. If you are looking for innovation support, go to TheInnovators.Network or want to be challenged to develop the next big idea, check out our Disruptive Ideation Workshops. Don’t forget to join our Innovators Community to enjoy more conversations around innovation.
To learn more about innovation reform, listen to this week’s show: Innovation Reform.