The Framework for Innovation by Frank Voehl

Author:Frank Voehl
Language: eng
Format: epub
ISBN: 9781351645287
Publisher: Taylor and Francis

The $64,000,000 Question: How Do You Measure Innovation?

One of the reasons that only about one-third of all Fortune 1000 companies have formal innovation metrics is because this simple question does not have a simple answer. Metrics can be important levers of innovation – for driving behavior, as well as evaluating the results of specific initiatives. Companies like 3M and Google have had innovation metrics for years – the most noteworthy that 10% of employees’ time is dedicated to experimentation with new opportunities. Some companies like 3M have tried to mandate that 35% of the corporations’ revenues should come from products introduced within the past four years. Defining the right metrics for your business can be tricky.

The best solutions create simplicity from complexity. Assuming that successful innovation results from the synergies between complementary success factors, it is important to address these by

• Creating a “family of metrics” for ensuring a well-rounded portfolio of measures

• Including both “input metrics” and “output metrics” to ensure measures that drive resource allocation and capability building, as well as ROI

A “family of metrics” ensures a portfolio of measures that covers the most important innovation drivers. The following are the three categories to consider for any metrics portfolio:

Return on investment metrics: ROI metrics address two measures: resource investments and financial returns. ROI metrics give innovation management fiscal discipline and help justify and recognize the value of strategic initiatives, programs, and the overall investment in innovation.

Organizational capability metrics: Organizational capability metrics focus on the infrastructure and process of innovation. Capability measures provide focus for initiatives geared toward building repeatable and sustainable approaches to invention and re-invention.

Leadership metrics: Leadership metrics address the behaviors that senior managers and leaders must exhibit to support a culture of innovation within the organization, including the support of specific growth initiatives. Within each of these categories, there are “input metrics” and “output metrics.” Input metrics are the investments, resources, and behaviors that are necessary to drive results. Output metrics represent the desired results for the metric category. There’s generally no one right answer and agreeing on what to measure can feel more like art than science. *

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