By: Rob Hoehn
In an Innovation Point article, Founder Soren Kaplan notes that only one third of Fortune 1000 companies have defined innovation metrics. And yet 77% of business leaders see innovation as a priority. How is it possible that something that is so important to business leaders doesn’t have a defined set of KPIs?
Well, one reason is that innovation means different things to different people and different things to different businesses… and even different business units. And most of the time we are talking about measuring two different things: innovation capability and innovation results. And it’s actually important to measure both. But how?
Innovation Capability (or inputs)
Innovation inputs help you analyze the health of new ideas and the potential for positive change in your organization. You could be measuring the number of ideas in your idea management software, the percentage of your workforce that is contributing to innovation efforts, or maybe it’s about creating culture change and you’re measuring the percentage of the workforce that’s been trained in innovation. The reason that this is important is because innovation (like many other business activities) is a pipeline. You need to be nurturing it at multiple stages continuously. Measuring innovation inputs will tell you not just how you’re doing now, but how you might perform in the future.
Innovation Results (or outputs)
Ideas that never see the light of day… well, they never become “innovation.” And the value of innovation is measurable (good news, right?). It can be measured in terms of savings, it can be measured in satisfaction (either employee or customer satisfaction), it can be measured in terms of top line revenue growth, and more! However, the only way to know the value of any innovation is to TRACK it and that means establishing a baseline before your program launch. Be sure to plan for success by measuring!
To learn more about innovation metrics and how they are being used by different groups, download this complimentary infographic.
By Rob Hoehn
About the author
Rob Hoehn is the co-founder and CEO of IdeaScale: the largest open innovation software platform in the world. Hoehn launched crowdsourcing software as part of the open government initiative and IdeaScale’s robust portfolio now includes many other industry notables, such as EA Sports, NBC, NASA, Xerox and many others. Prior to IdeaScale, Hoehn was Vice President of Client Services at Survey Analytics.