What Are the Best Metrics for Measuring Innovation? - Associated Content - associatedcontent.com

How can you measure how well your organization is doing with innovation? What metrics can you use? Most corporations find it difficult to measure innovation in any satisfactory way. But there is help at hand. There is
some useful information in a piece of Boston Consulting Group research on the subject. The British Quality Foundation carried out an innovation metrics web survey. These surveys show that the most common measurements are backward looking - e.g. % of revenue from products released in the last two years. The BCG report recommends that you select a small number of metrics appropriate for your business and have some for inputs, process and outputs. Here are some of the best yarsticks to use:

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

It is useful to draw flow-chart diagrams of the innovation approval and pipeline processes and ask some searching questions. Are we getting enough ideas coming in? Is it taking too long for good ideas to be implemented? Are we getting enough innovations out of the process? Are our approval processes too complicated or too difficult?

There are no perfect measurements for innovation. Each metric gives a part of the picture. 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.

Paul Sloane writes and gives keynote talks on innovation.