Over the last ten years—both in my practice as an innovation consultant and in the literature—I’ve seen a recurring theme among people responsible for growth in large companies. Consistently, they rank innovation among their highest priorities and consistently, they’re not happy with how it’s going.
Why aren’t they happy? Of course it varies by person and by company, but these are among the reasons I hear most often:
Business leaders aren’t satisfied with the return on their investment in innovation.
As far back as 2008 57% of the 3,000 executives BCG surveyed about innovation said they were dissatisfied with the financial return on their investment in innovation. The 2017 issue of that same survey showed 76 percent of respondents that identify their companies as “weak” in innovation are dissatisfied with return on innovation spending. This is perhaps not surprising given an increasing number of studies shows that innovation performance is declining. (See our post on this topic).
Innovation leaders aren’t confident in the decisions they’re making.
Sixty-five percent of senior executives that responded to a McKinsey survey said they were somewhere between “somewhat” and “not at all” confident in the decisions they make related to innovation. I’ve seen the downstream effects of this lack of decisiveness. One director of R&D for a consumer products company told me his team was stretched too thin because they didn’t have a basis for saying “no” to ideas so they kept working on everything.
Expectations aren’t aligned across levels of the firm.
The perspectives of business leaders don’t line up with those of the people on the front lines of innovation. A client with 20 years of experience developing new ventures in a large firm told me, “I know in my heart that the mismatch between leadership’s perceptions and mine is our biggest problem.” Another said “I’ve exhausted myself trying to get on the same page with my CEO.” (I wrote more about this here.)
TL/DR: expectations aren’t being met; decisions are being second-guessed; resources are being wasted; and teams aren’t on the same page. I only pretend to be a therapist, but that seems like a recipe for unhappiness.
High-quality measurement is part of the solution.
Under those circumstances in other corporate functions, you might take a hard look at metrics, but that’s often not the case with innovation. You might say that’s because your measurement system doesn’t tell the real story, or that you de-emphasize measurement because it’s better to fly under the radar. Maybe you’ve had bad experiences with metrics designed for the rest of the organization. It’s true—those don’t work well in the innovation context, where you need to account for uncertainty and ambiguity; and emphasize learning and communication.
But, if the problems above sound familiar, it’s worth examining: might better measurement be part of the solution?
