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How can we measure innovation?

Undoubtedly, this is one of the main concerns of many Managers. How do we know if what we are doing in innovation is working or not? Do we earn or waste money with innovation? What type of indicators can we use to know if we are going well or if we are wasting time?

Measuring innovation is necessary, no doubt about it. But many companies are too obsessed with this matter. Innovating is a constant learning process. If we strictly start measuring behaviours and results, we may cause panic. Do measure, but without consigning to oblivion processes and people’s attitudes. Measuring without patience is highly frustrating.

Innovating is said to be expensive and risky. This is not true. Unsuccessful innovation is. When we innovate by learning from the process and with a safety net, we eliminate great part of the risk and possible costs. As a result, we should focus on the learning process rather than on measurements. The latter will be a consequence of having done everything well.

What do companies which measure innovation appropriately do? Basically, they turn it into a regular process, with its own parameters, indicators and control mechanisms. Find some ideas below:

  • If we agree that innovation is important, we must be consistent. People should have specific tasks related to innovation in their lists of objectives, and they must be considered as important as, or more important than, their daily tasks. Besides, payment systems should be linked to the achievement of innovative objectives, which may be either individual or collective. If we do not do so, people will never consider innovation as a real priority. Metrics should be aligned with assessment performance systems.
  • Innovation does not mean “having ideas” but being able to turn them into a benefit for the company. People who claim having many ideas should be able to translate them into successful facts. Inventing is not innovating. Innovating is turning ideas into benefits.
  • Allocating a large budget to a company which starts developing innovation policies is not a good idea for such purpose. In those circumstances, people will tend to spend money just to spend. It is much more important to focus on the learning process than learning from mistakes. Budgetary increase should be in accordance with such progress.
  • Some of the measurements related to the innovation output may be lots of products or services successfully launched, innovative product incomes, benefits derived from innovation investments and so on. But we should also take into account measurements associated with inputs: the number of ideas generated in a creative session, financial resources allocated to innovation, the number of people with tasks directly related to innovation, average time of working hours spent on innovating, innovation speed (projects development, etc.)…

Needless to say, any tool that helps control innovation processes better will be welcome, only if it is subordinated to (and not over) real innovation drivers: market analysis and contact with clients, creativity, passion, disruptive anxiety… Instruments such as the Balance Scorecard applied to innovation, Six Sigma, the present engineering, specialized softwares, etc. may undoubtedly help have conscious control which is more effective and efficient of our innovative policies. How is it done in your company?

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15 Comments on “How can we measure innovation?

  • Fernan Guzman
    Sunday December 12th, 2010 at 05:43 AM

    Algun libro que recomienden sobre este tema? Gracias

    Reply
  • Antonio
    Tuesday March 26th, 2013 at 09:57 PM

    Hola, creo que ud. me podrá ayudar, le explico: estoy preparando un tema sobre Innovación y más concretamente sobre como medir la rentabilidad de la misma en las empresas y los factores de éxito de la innovación, le estaría muy agradecido si pudiera recomendarme o facilitarme información al respecto. Gracias

    Reply
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