“Of course, from an IP strategy view, we always try to sit with the business people and get aligned with the IP strategy. But when we talk lean IP, I think people need to spend more time with those in manufacturing and the guy on the factory floor. Try to go there once or twice and just walk through. It will inspire you and give you so many ideas. I think looking at what they are capable of doing is pretty amazing.”
- Tony Afram, Chief Patent Counsel, Leica Microsystems GmbH
How can Intellectual Property Management professionals continue to develop their professional competence?
- Attend industry conferences.
- Read industry publications (and blogs like this).
- Create a mentoring network or mastermind circle.
- Visit the factory floors of highly efficient manufacturers.
- All of the above.
Surprised by the fourth option? You shouldn’t be, according to Leica Microsystems’ Chief Patent Counsel Tony Afram. Tony is a huge proponent of the lessons IP professionals can learn from visiting factories to observe how components are efficiently combined into finished products.
He’s convinced - and can provide evidentiary support - that IP departments should emulate manufacturing departments to gain similar benefits from efficiency and standardized processes. It’s lean IP management and it’s quickly gaining converts in Europe.
Six months after Leica Microsystems implemented IPfolio in 2016 to accelerate the transition to a new IP model, Tony sat down with us to discuss the opportunities and challenges of adapting an efficiency model originally developed for physical manufacturing to more mental purposes.
We were delighted when he agreed to speak with us about transitioning from traditional IP management to one operating on principles long associated with the Toyota Production System and the version optimized by Danaher Leica’s parent company.
A quick Tony biography: He’s a native Swede now working in Zurich who’s maintained his pride in Sweden’s success in international ice hockey competition. A masters graduate of the Royal Institute of Technology in Stockholm, he’s a mechanical engineer who worked as a patent attorney before joining Leica Microsystems in March 2014.
(In the spirit of disclosure, Leica Microsystems has been an IPfolio customer since Q1 2016. Tony’s comments do not necessarily reflect those of his employer nor do they constitute legal advice of any kind.)
Leica Industrial Imaging
Headquartered in Wetzlar, Germany, Leica Microsystems GmbH (Leica) emerged in 1997 as one of three successor companies of Ernst Leitz GmbH. While it owns the Leica trademark, it’s not the company behind the eponymous consumer camera brand. That’s a separate independent entity.
Leica, the industrial imaging company, develops and manufactures microscopy and imaging products and software to analyze macro-, micro- and nanostructures. It’s a truly global enterprise; there are distribution partners in over 100 countries, manufacturing plants in eight, and product development offices in Europe and the Far East. It employs approximately 2,000.
Part of the Danaher Empire
Leica has been wholly owned by Danaher since 2005. If you’ve never heard of Danaher, it’s one of the most successful lean manufacturing proponents in the world. In the mid-to-late-1980s, Danaher merged key pillars of lean and kaizen-based systems and practices to create the Danaher Business System (DBS).
Since then, it has become a Fortune 150 behemoth by acquiring operating companies and successfully implementing the DBS. More than 120 subsidiary companies generated more than 21 billion USD in aggregate revenue for fiscal 2016. With a 21% annual shareholder return, the stock price has outperformed the S&P 500 index by more than 2,000 percent since 1997.
A planning and execution roadmap, the DBS has clearly been wildly successful for the company. In late-2015, Tony decided to start applying as much as he could of it to Leica’s IP department.
The IP Department at Leica
IPfolio: What was the inspiration to investigate the lean philosophy for IP?
Tony: It’s important to understand how our IP department is structured. Increasing efficiency was a big reason why we started. We’re in three locations; I am based in Switzerland, the majority of the team is based in Germany in one location, and there’s a second smaller group in another location in Germany.
The traditional world of IP lawyers or patent attorneys - I was one for almost ten years - is based on physical files. They’re stacked up on your desk waiting for you on Monday mornings. You arrive and guess how much work you have for the week. This didn't work for us because we are spread out in three locations. Sending me physical files from our German headquarters would take days.
As soon as I joined, we started looking at some kind of "virtual office setup" to manage our workload. As you can imagine, email is a very frustrating experience; it’s impossible to look into your inbox and immediately see where you stand. Plus, even though we’re a small team, we had many different variations of doing the same activity.
That’s anything but efficient.
That’s true but certainly not uncommon. As you know, lean models have traditionally been much more common in manufacturing. In software development, you have examples of planning sprints, tracking time and monitoring all kind of metrics. In other departments, however, the lean model has not taken root.
Fortunately, there is a great culture inside every Danaher company to implement lean. We are encouraged to think in terms of lean, then supported with the technology to do it. This was the beginning for us.
A New IP Management Process Based on Repeatability
How did you start?
Danaher provides a lot of training resources. Transactional Process Improvement (TPI) was really valuable. The teachers have implemented lean across a multi-billion dollar company for years so they know how to apply lean principles to an office environment. This is more like us. Although we don't produce products, our so-called transactions are handling files and working on emails.
The DBS and TPI training heavily emphasized the importance of repeatable processes. Some of the key messages were developing a checklist for each task or activity, and keeping single copies. Don’t make and send out multiple copies; just keep one in one central place. You can imagine how these could conflict with an IP system developed on an Excel spreadsheet like we were using to do over 50 first filings. You end up with very messy spreadsheets and waste a lot of time.
What was your implementation plan? While you were in the training, were you thinking of a project roadmap?
To get started, I decided to concentrate on two fundamental areas; standard work and visual management.
Standard work is critical to efficiency. Even in a group of three, you can have multiple processes, even though they are all trying to achieve the same goal. It’s not that one is better than the other, it’s just you need to find a standard work so that you can be very efficient, particularly in your daily work. In addition to focussing on standard work, the importance of visual management was very clear.
One of the standard work foundations is a checklist that is documented in one place. This ensures 100% objectivity for everyone. No one gets to add their personalized notes to it, which could create confusion. If somebody doubts what to do, they know they can log in to the system, find the officially approved process, and simply start with the first step.
Visual management is how you know ”where you stand.” If you can create some metrics or visualizations, they enable you to understand where you are and the workload you have. The usual question we would ask is, “Are you winning with your daily task?”
You can’t easily answer that question using a spreadsheet.
No, you can’t. It took a little while to understand this. Our old setup was some basic Excel spreadsheets and an antiquated, client-server-based internal docketing system. We tried to do some visual management stuff in Excel but updating worksheets and exporting data took way too much time. It became quickly obvious that we needed new technology.
We needed one system for everyone, fast and easy access for our different locations, and something we could easily configure and update without the assistance of tech support. It needed to be an enabler so we could combine standard work, checklists and visual management. Obviously we needed a lot of reporting flexibility so a combination of dashboards and granular reports was high on our list. IPfolio met all of our criteria and wish list priorities.
Upgrading the IP Technology
What was the implementation process?
We signed the contract in February 2016, had our project kickoff workshop in early March and went live in early May.
That was the technology implementation, where are you as far as implementing your new IP model? Did you just jump into the deep-end?
No. It’s an incremental process. We had to migrate hundreds of relevant database tables from our old system into IPfolio. We also had to connect IPfolio to our existing infrastructure. Our finance department is on SAP and we wanted to have our IP costs in our IP docketing system. It wasn't possible in the old system; somebody had to manually type them in. That meant a lot of typed invoices every month.
Our DBS and TPI training emphasized the importance of finding, configuring, and using the right tools to help standardize processes. We used a tool available in the Salesforce marketplace to export our SAP data to IPfolio. Right there, that’s a good example of standard work in practice. It’s repeatable and efficient.
How was visualization implemented?
In terms of visual management, it’s early days. We’ve mapped our process of reviewing invention disclosures and created several dashboards that provide a real-time overview. We mimicked our manufacturing environment by applying the workstation model to our mapping.
Between receiving an invention disclosure and finalizing the files with the patent office, we have eight different steps or workstations. The entire workflow and all the associated files and activities are visually presented in the IPfolio UI. It’s much easier now for any team member to answer the "Are you winning?" question for themselves.
What other tactical activities are you doing?
If you’re familiar with the lean startup model of software development, you know about stand-up meetings. We implemented the same kind of thing, a weekly call during which each team goes through their dashboards. You need to stand up in front of your dashboard and discuss your activities and deliverables with everyone else.
Benefits of Implementing IPfolio
I know it’s very early, but can you speak about the differences between the new way and the old way?
Let’s start with standard work. We now have everything in one place. This includes what we call documentation or checklists, which are the routines or orders of operations we follow for everything.
In terms of visualization, the difference is considerable. When we compare what we did before and what we do now, the ability to visualize what you are working on has made a huge difference. It may sound like a really simple thing, but being able to visualize your work makes a big difference from a planning perspective.
To break things down further, we’ve seen benefits in a half-dozen key areas, some of which have improved the workloads of individuals, while others have helped me as a manager:
1. Confirmation of Workload
The old school mindset was that everybody knew where they stood because they could see a pile of physical files next to their desk. This wasn’t true, though, because unless you looked inside each one, you couldn’t possibly know what was outstanding.
Our centralized reporting has fixed this. Some team members here have told me that they feel more comfortable with their daily work because they have a better overview where they actually stand.
How do you set your priorities? First, you have to understand how much you have to do, which I’ve just explained. Now we have to identify what we should do first. Our dashboards use different colors like green and red to communicate completion, delays and urgencies.
When you can visualize your different segments, office actions, and invention disclosures like this, you can follow a standard process and prioritize what matters most. We are now able to do this much more capably than before.
3. Team Cohesiveness
This could have several names; teamwork or esprit de corps, but it’s closely aligned with resource allocation. Basically, it’s the awareness to know who may be struggling or needs assistance.
Before we implemented our new IP model, there was never any discussion about trying to “help out” somebody else. We just didn't know who needed it, and the “Do you need support?” offers might not have been accepted as readily. Now, I think it’s much different and colleagues are more likely to reach out and have those “can someone jump in and help me?" conversations.
4. Resource Allocation
Without this new transparency, we would not be able to understand where our bottlenecks are. We have much more clarity now. Since we are now mapping the process in real time, we can better see who needs support and where. I can dynamically allocate resources to another segment in the division and prioritize more effectively.
5. Capacity Utilization
When I can understand resource allocation vs. demand, I’m then able to take the next step, which is to look at our capacity. As a manager, this is huge. How should I plan the workload within the department? What is the capacity? Are we approaching full capacity?
If I have this data, I can make better judgements about, for example, outsourcing something to external counsel. Similarly, I can state that we don’t have capacity to do this project within the next two weeks, and we will need three weeks.
6. Resource Acquisition
This is the logical end of being able to immediately know where you stand with your current resources and workload. The data in IPfolio are beginning to help us understand if and when we may need to hire new people.
We’ll be able to support a hiring argument with data, rather than a gut feeling that we just need a new guy because it’s been a little busy the past two months. If you have all this information, you can deliver a much more convincing argument in budget meetings.
A Data Evolution?
You speak in terms of data, but what’s really changed for you?
Well, right now, within a second, I can answer these two questions; “Where do we stand?” and “Are we winning?” I know exactly where my cases are, and how long they have been resting at a particular workstation. From there, I can prioritize, as I just explained. This is really the beauty for us of combining this process and this software.
Does data mean KPIs for you?
Yes and no. It’s important to have KPIs, but I would say it’s too early for me to know which are the most important. We track metrics like “how long it takes us to review an invention disclosure from beginning to filing,” but we haven’t studied their relevance to business impact yet.
My plan in the coming year is to identify the best KPIs in different areas. I’m not a fan of focussing on a lot at the same time. We want to focus on a handful, perhaps two, three, or four and make sure they really bring value before we focus on the next ones.
IPfolio: The Early Returns
What do you think IPfolio has provided to you?
Fundamentally, it’s enabled us to begin implementing an operations model that has been extremely successful across so many Danaher companies. Although we’re still in the early stages, we’ve already seen a lot of improvement. It’s really the software, this Salesforce/IPfolio combination, that is enabling us to do this. Other IP management technology would have have been far too expensive and required too much customization to be feasible.
We’ve seen the argument that "if you do it right, it will not take extra time” proven beyond any doubt. I think this is perhaps a fear of some, but it hasn’t been the case for us. Referring to the checklist doesn’t take any longer because it is part of the system. It’s not as if you’re leaving your desk to refer to a binder somewhere.
To borrow a hockey reference, I would say that we’re just in the first period right now. We knew that to implement this model fully, we needed the right tool. We’ve got it, and, frankly, would not have reached this point without it. We know that lean processes when done right should just be part of our daily work. We’ve already seen this.
I definitely know we are on the right path, though, because whenever I meet other European colleagues, explain what we are doing, and show them our IPfolio account and dashboards, they frequently say “wow, I didn’t know you could do this.”
Thank very much to Tony for his time and willingness to share his experiences and help his industry peers. If you’d like more information on IPfolio, please visit IPfolio.
- Repeatable processes and data visualization are critical.
- Concentrate on creating standard processes for all actions.
- Keep ONE copy of each process in ONE central location to prevent any "customization."
- Create a methodology for visualizing status, progress and workloads.
- Identify KPIs that represent meaningful and material business impact.
- Focus on the most important KPIs.