28 Nov Monitoring your innovation – from childhood years to the adult stage
Posted at 17:16h in Business
What are the best innovation metrics? Answering this question is as simple – or as complicated – as answering the question “What’s your favorite food?”. My favorite food when I was a kid was candy. In my teenage years and early twenties, I had a craving for hamburgers. Nowadays, I mostly enjoy seafood.
Obviously, my food preference changed and evolved as I grew older and as my needs and lifestyle changed. The same can be said for a company’s innovation metrics.
INNOVATION ACTIVITY METRICS
When setting up your innovation organization, there’s not much to go on in terms of measuring the success of your innovation initiatives. The most common metrics at this point are the number of collected ideas, time spent on innovation, number of innovation campaigns, etc. These are commonly referred to as innovation activity metrics and correspond roughly to our candy-loving childhood years.
INNOVATION IMPLEMENTATION METRICS
When the innovation matures and the ideation process becomes streamlined, innovation initiatives start producing results. As captured ideas get enriched and developed, activity metrics become less important and the innovation managers’ focus shifts to the next innovation maturity stage – the teenage years. Instead of tracking the volume of ideas or time spent on innovation, it becomes increasingly important to understand metrics that reflect how successful the company is in driving the innovation initiatives. Percentage of successfully implemented ideas, capital investment, time to market are some examples of what is typically called innovation implementation metrics.
INNOVATION IMPACT METRICS
In the later stages, a company’s innovation organization is well managed, well-funded and refined, carrying a lot of influence, not only on the business strategy, but also on the business results. Ideation and implementation processes are now in cruising mode and don’t require a lot of attention and tweaking. Innovation executives (very often members of top or C-level management) concern themselves with numbers that reflect the business impact (hence the term innovation impact metrics) that innovation brings to the company. KPIs like percentage of revenue from innovation initiatives, change in valuation or market share as a result of innovation, return on innovation investment, are now monitored to ensure not only a justifiable investment, but also a strategic alignment between business and innovation.