Innovation is fundamentally different from other business functions. Measuring it requires a system designed specifically for that context. Improve the system, unlock value from your innovation / R&D investments.
A comprehensive measurement system includes metrics, benchmarks for comparison, communication practices, and the tools to support all of the above. It should be as innovative as the technologies, products, and services you’re creating. It’s working well when it enables confident decision-making at the project, portfolio, process, and organizational levels.
Even when executive sponsors give new innovation initiatives freedom from the formal accountability they’d normally place on more typical business operations, measurement is still important. Questions about “return on investment” will inevitably arise—the best innovation leaders are ahead of those questions, defining how they want their leadership to evaluate their success.
Good innovation performance measurement requires careful design of a system to ensure it efficiently achieves its intended functions. Innovation measurement systems are often highly metric-driven; that is, they’re ad hoc collections of metrics including:
Commodore’s approach to innovation performance measurement starts with recognition that it requires a system. The design of that system starts with identifying its core functions and understanding your organization’s culture. The answers to those question define the other aspects of the system: the metrics you need, the norms you benchmark against, how you communicate, and the tools you need.
Our standard approach to designing and refining measurement systems is shown in the diagram. Sometimes our clients need more targeted assistance. In those cases, we also: