Automation with entrepreneurialism

The issue of change management is addressed in the chapter on 'Motivating embedding and maintaining change'. But the key message there is that scripting the process, making it easy and automatic, is the key to embedding change. So in addition to ensuring a focus on aggregate outcomes, and a reduction in transaction costs, automation also mitigates against backsliding to old routines.

Nonetheless, a renewed focus on outcomes and processes may have its own risks, if not guarded against. If the majority of the business development is undertaken by external partners there is a need to ensure that the 'commercial muscles' of the KTO team do not atrophy. It's necessary to keep the KTO team sharp. Whilst the team is not best placed to substitute for the dealmakers - it doesn't have the time and resource - the best way to keep the team sharp is to ensure that it also has a role in deal making and execution.

But this KTO role should be carefully considered. If the KTO team cannot let go of, or tries to back-seat drive, the early initiation and business development or deals, it will unnecessarily restrict the entrepreneurial activity that can be generated. Undertaking any serious early commercial due diligence and business plan programme may take a member of the team out of action for around six months for anything other than that deal. That deal may go nowhere. Indeed, the sunk costs will encourage the business manager not to see the need to kill early stage ventures that are not viable or validated.

Keeping the team sharp

Nonetheless there are good reasons to ensure that the team is fully engaged with the landing of deals. A focus on facilitating the network is not the same as restraining the KTO team from tactically getting 'down and dirty' in real deal making. They have to keep their hands in on this because:

• Ultimately any deal done will be executed by the university or its commercial vehicle. This can only be done by those acting for the university, preferably employees authorised to do so (as addressed before in the section on 'Who does what');

• The entrepreneur-consultants may not have all of the skills necessary (ref back) to execute the deal and a team will need to be built round them to land the big opportunities and deals. It's better if this includes a KTO team member as a participant, as well as a facilitator for the KTO in building that team;

• And perhaps most importantly of all the KTO needs to keep its commercial 'nous' keen and its negotiation muscles exercised. Otherwise these atrophy. Without the right level of deal engagement:

• The job will be less interesting - and the KTO director may lose the best people;
• Some entrepreneur-consultants - being entrepreneurs - may sense the lack of commercial acumen and operate the process to their advantage and not that of the university or the academics. This will be rare with the right consultants and ground rules, but the KTO is the ultimate guard against an self-dealing (amongst any party!);
• The KTO will not understand the real pressures of a business and may not behave in a commercial manner - there is a good chance that bureaucratic dynamics in a university will become the dominant logic and you will slide backwards toward convoluted stage-gates designed only to eliminate risk (and with it opportunity and potential value).

Autonomy - commercial '20% time'

One way to ensure that the bulk of the KTO teams efforts are focused on the portfolio and on the commercial outcomes, whilst ensuring that they stay sharp is to allow them a 'hobby' deal or spinout to work on. An analogy is Google's '20% time' policy where employees get 1/5th of their time to work on projects of their own choosing. This maintains balance in terms of focus on the ecosystem versus the project. It provides interest and autonomy, the latter probably being the most effective motivation factor for team members. This is best if it:

• Involves P&L responsibility. Positions on a company board are undoubtedly the best commercial education that member of a KTO team will ever receive. It is arguable that a KT practitioner is never really fully competent until they have had this sort of exposure. 'Industry' experience is not an adequate substitute for responsibility for the sustainability of an early venture and the balances that it requires. This is the best antidote to bureaucracy and... it keeps the team sharp, unbureaucratic and emphasises the needs of the business that they are creating;

• Is not too early. Pre-business ventures might not give the real exposure to the dynamics of a business that a new start-up might give. Time for this type of activity might be limited - and is best reserved for the entrepreneur consultants, and some team members are best exposed to an undiluted business dynamic. But we need to balance this with some added value to the company... eg an IP expert or contractual/legal experience;

• Does not dominate. Do not let team members have more than one (at most two) such engagements. Anything above 10-20% of their time will result in substitution of the network and will distract from the focus on scalability. The goal is educative, not to resource the spinout portfolio. And these proportions are a principle - not a fixed rule. But don't waste valuable resource by stuffing every board with KTO staff as observers.

The other problem with populating boards with KTO staff, beyond the time and effort involved, is that KTO staff will have primary responsibility to the company - not the university.

Of course large deals or licence opportunities or realisations can offer similar experiences - but nothing is quite like board experience for generating a balanced sense of competing business demands. So being able to share this experience around the team widely is a good idea and it's even better if there is a skill set match, so that businesses are not saddled with someone that will not bring value.

Ultimately there is no better antidote to dampening the dead hand of bureaucracy that can arise in large organisations (unless the board is simply a committee of the university and not a real venture).

Animation - network health

Finally, the scalability of the system is dependent on the introduction of new players and new skill sets. Ensuring new blood is introduced and that the virtual team is animated and kept involved is crucial. Attraction of new blood will be down to the opportunities provided, but community animation needs also to be an element of the performance metrics. Preferably someone will have primary responsibility for managing the community. All team members need to see this as a core task, hence their performance criteria need to reflect this. Whilst this is less tangible than the Return on Investment figures, metrics on network health are important to the longer sustainability of the approach, so ensure that this is also monitored.