As companies are becoming more and more dependent on the knowledge, experience and creativity of the people in their businesses, they must begin to think more strategically about their “intellectual assets.” At Equinox, we regularly receive calls from individuals starting a business and wondering if the contract they signed with their employers limits their ability to move forward with their new ventures. How does an employer capture the “intellectual assets” of its valuable employees and keep them for the long term?
“Intellectual assets,” by my definition, includes the traditional intellectual property of a company (i.e. patents, trademarks, copyrights, trade names, trade secrets, customer lists, and other proprietary information) plus the intellectual capital residing in the employees of the company. Protecting the former is fairly straightforward with legal registrations and employment contracts but adequately capturing and protecting the latter can be much more difficult.
The primary tool used by companies to protect intellectual property and keep employees from taking their knowledge elsewhere is the Employment Contract. Beyond the contract, though, is the deeper view of what valuable intellectual assets the company has – and what it wants to develop. Employees must want to contribute this knowledge to develop the company’s intellectual property. To do so, the environment must foster collaboration and value creation. Companies are almost universally creating more restrictive employment contracts to protect them from employees going to the competition. This approach certainly has value to the company; but it must reflect the company’s real needs and not be overly restrictive. These companies are simultaneously developing content that can be reused within the company and across company clients. To foster this value creation, employees must feel their contributions are an important part of the company’s development and that they are acknowledged for their contribution to the value they have provided. A carefully crafted recognition and incentive program can go a long way to creating an environment of loyalty and respect.
Our goal in this world of increased dependence on intellectual capital is to create a balance in what intellectual assets employers are able to capture, grow and protect and the rewards granted to the people who have provided those assets. In finding that balance, a company can foster creativity and growth while protecting what is being created.