Innovation Metrics

Very interesting blog on the principle of measuring innovation. We typically associate innovation as a highly creative, on the fly dynamic process that invokes the notion of a person with a light bulb going off in their heads, because they have just come across a major epiphany. The reality of course, is that it can take years of hard persistent work to reach a point where such an epiphany bears fruition. Read any history text or biography of historical geniuses such as Einstein, Edison, etc., and you will see this pattern throughout.

Much in the same way, the author of the blog positions the notion that companies need to apply this kind of historical archiving of innovative ideas, so that some kind of rigorous, quantitative metric could be applied to measure both the predictive likelihood of the ideas potential, tools and processes to apply to the idea so as to be realized, and quantitative measures to gauge its progress. Its a basic Input/Output model:

Input metrics

• Number of ideas generated
• Resources allocated to innovation - people and budget

Process Metrics

• Average time from idea approval to implementation
• Number of ideas approved and number implemented
• Stage-gate pass rates
• Value of the innovation pipeline

Output metrics

• Number of new products or services launched
• Revenue from new products or services
• ROI on innovation spend
• Market Perception
• Number of new customers

And of course, this has strong ties to project and product release and management cycles, as each of those ideas would typically be launched through a project/product development life cycle. In fact, that input, process and output technique is the very same technique advocated by PMI's PMBOK in it's Input, Tools & Techniques, and Output model for managing projects.

Some may argue that applying such rigor to innovation may stifle the creativity needed to generate such innovative ideas, but that is to misunderstand the purpose of these metrics, for as the blog states, "By choosing and applying a small number of metrics appropriate for your business you can add innovation to your balanced scorecard and give it the high level attention that it needs if you are to succeed".