An odd press release showed up on my “open innovation” news search today
UTEK Corporation (AMEX:UTK) (LSE-AIM:UTK), an Open Innovation services company, has agreed to acquire Strategos, Inc., a leading innovation and strategy consulting firm providing services primarily to Fortune 500 companies.I’d never heard of Utek, but their website implies that they are an IP licensing middleman. CEO Clifford Gross has co-authored a book on commercializing technologies from US federal labs.
Founded in 1995, Strategos has offices in Chicago, Lisbon and London. Over the past 13 years, Strategos became a leader in providing strategic growth advisory services, helping its clients outperform their industry peers by building and deploying a sustaining capability to innovate more effectively and efficiently at scale.
Since inception, Strategos has performed services for 25 out of the 30 companies included in the DJIA (Dow Jones Industrial Average).
I was skeptical about the “open innovation” claim, since this is really just the “found money” approach of external innovation that became popular after Henry Chesbrough’s 2003 book was published. Normally, firms (and consultants) take an oversimplified version of open innovation: fire your R&D staff and then look for all that free innovation just waiting to be used.
However, Chesbrough is listed as a consultant to the company and confirmed his involvement, so the claim of being in open innovation is legit.
Strategos was once a breakthrough strategy consulting company, on the strength of founder Gary Hamel. With CK Prahalad, Hamel heavily influenced the approach to strategy during the 1990s with their book Competing for the Future and a series of articles. I personally enjoyed Leading the Revolution the best, but I have not had a chance to read his latest book, The Future of Management.
Strategos had a 3.5% loss last year on revenues of $10.8 million. If it earns out, Strategos shareholders will get $15 million in stock over three years (with the attendant risk of stock price fluctuations).
Still, that’s a far cry from LECG, started by Berkeley’s David Teece. Even allowing for LECG doing an IPO at the peak of the Internet froth, LECG today has a market cap of $240m — 16x that of Strategos and more than double the $110m market cap of the company acquiring Strategos.