“There is a clear correlation between capability in innovation measurement and innovation success, yet less than 20% of companies believe they have a decent innovation measurement capability” says the 8th Arthur D. Little’s Global Innovation Excellence Study.
Few business processes are more critical to a company’s continued performance than innovation. But when it comes to the question “what should I measure?”, there isn’t a fixed answer which can help an organisation to quantify the return on innovation investments. Finding practical indicators that clearly measure innovation is a difficult task and even harder is how to implement innovation measurement as a self sustaining-process.
Having worked with many companies across different industries, here are our 4 tips to measure innovation.
- Define a few, clear (maximum 5) Key Performance Indicators (KPIs) as a constant reference. “What gets measured gets done” the saying goes.
- Measurement must be made a priority and the organisation should stick to it from day one. In order to get the most out of your metrics, you need to know where you started, what you achieved, over what time and from what inputs.
- Look beyond the short term. What you are investing in really matters to the long-term value of the business and therefore should not be assessed against short-term metrics or business targets.
- Keep it going. Innovation measurement has to become a core capability of the organisation and has to cross every business function, involving the entire staff as an everyday management practice.
An idea management platform can help you track the outcomes of the innovation process with consistent metrics across every function. Keeping the entire stream monitored is essential to a sustained competitive advantage: how many resources invested, for how long, who are the main contributors and what are the net benefits are only some of the indicators you can rely on.