Successful organizations run on metrics; metrics for decisions, metrics for evaluation, metrics for analysis, metrics, metrics, metrics. Some use more and some use less but all use metrics. So, it is completely natural that innovation programs are frequently asked to use metrics to measure their success. But how should measures be used?
As a general rule, in the early days prove the value of your emerging program with tactical measures and in the mature phase you will want to show strategic linkage using larger, organizational measures.
Some of the key measures used are revenue generation, expense reduction, customer value, and time values such as time to market. The most successful measures will be tailored to the objectives of your company and innovation program. And that’s where innovation leaders have to be savvy about using measures.
There are essentially three maturity stages of measures in an innovation program: early, developing and mature.
New and early-stage programs should use the minimal metrics necessary to prove value to the organization. They should be tactical and immediately useful to show the value the program is bringing. Examples are measures that support the immediate goals of showing value such as return on investment.
Innovation programs that are more developed will likely require multiple metrics. More robust metrics will be needed to appease stakeholders and their specific goals. Examples of metrics used at this stage are revenue generation, time-to-market, time-within-stages, number of ideas, number of patents, number of launched ideas, and everything in between.
Lastly, innovation programs that are mature require less metrics and can be more holistic in nature. Because innovation is an accepted and valued capability, the metrics used are usually more focused on the big picture, and they don’t require multiple measures to prove the program. Measures used at this stage show the overall value of the program to the strategic goals of the organization. For example, 3M’s very robust program only uses two measures: Total revenue from innovation and an innovation survey to employees—that’s all they need.
If you read this far, you’re welcome to contact me and I’ll send you a “selection” chart I’ve frequently used for picking the correct innovation metrics.
To know how to measure your innovation, determine your program’s maturity level and use those metrics that support your current goals and program. In the early days prove the value with tactical measures and in the mature phase you will want to show strategic linkage using large measures.
