Friday, May 26, 2006

How can I sell know-how?

Part of Open Innovation is marketing your know-how, sometimes across industry, which is what I think makes it innovative. Suzanne Harrison talks about this in her new book Einstein in the Boardroom, but only a few cutting-edge companies have managed to pull it off.

Here are some ideas for how to go about selling know-how for your Open Innovation program.

  1. Package it – Given the nebulousness of selling intangibles, Harrison coined the term i-Stuff. To shed i-Stuff of this stigma, one idea is to package it with manuals and other tangible material that helps define what the know-how is. People understand exchange of funds for tangible goods, so to the extent to which you can make the intangible seem tangible helps bridge the gap. If you don’t have a unique name for you know-how, name it, make it a “thing” that people can talk about. A three-letter acronym can be good, but another thing to think about is a name that communicates the value-proposition of the know-how. What problem does it solve? What benefit does it impart if you have it? From what I’ve heard, it can be difficult to sell know-how because your buyer may have trouble admitting they don’t know what you know. By packaging it, you give them a way to pitch it to their boss without making it sound like the valuable part they’re buying from you is the knowledge. Help your buyer save face.
  2. Cast it as a capability – Capabilities consists of People, Processes, and Tools. Know-how is typically the Process part of a Capability, but it could also be knowledge that you convey to another company’s People that help them implement a process. Think beyond the knowledge portion of the know-how and figure out how to cast it as a Capability. What kinds of People does it require? What Processes are needed to pull it off? Do you have any tools you’ve developed that your customer will need if they want the Capability?
  3. Identify benefits – Anything you sell, whether tangible or tangible, won’t be bought unless it imparts a benefit to the buyer. List out 8 to 10 benefits of your know-how. Some benefits are causal, for example a benefit like “improves cycle time” leads to the benefit “reduced waste”. There are some good techniques for identifying benefits.
  4. Find a distribution channel – If you’re a materials company, will a company in the travel industry give you the time of day if you think they could use know-how you’ve developed? To increase your credibility, partner with a consulting firm to re-sell the know-how. Consulting firms are the ones people go to when they need to know how to do something. But consulting firms aren’t in the trenches like you so they may not be able to develop know-how like yours. So it can be very synergistic to license your know-how to a consulting firm for resale.
  5. Search for buyers in other industries – Don’t want to sell your know-how to a competitor? Most companies don’t, that’s normal. So find non-competitive industries that need the same know-how. That presents a challenge because you’re expert in your own industry, but not other industries. Sophisticated forms of Internet search can help you find people in different industries who want the benefits you know how to provide.

If you get good at marketing know-how as part of your Open Innovation initiative, another idea for you is to package your knowledge-selling capability and sell it to other companies that want to sell their know-how :-)

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