Innovation metrics are important to get right. And sometimes you need to move quickly. This guide identifies the key innovation metrics you need to ensure you’re getting the basics of innovation performance measurement right.
Selecting the right innovation metrics is vitally important because of the essential role they play in, for example:
But figuring out what innovation metrics to measure can appear daunting (there are hundreds you could track) and getting it right can take time—time you’d rather spend actually working on innovation projects.
The good news: getting the basics right is straightforward, and our guide identifies all the innovation metrics you need to measure to get started—or to do a quick check on your existing innovation metrics. Note: if you know you need to go beyond the “typical” and develop a measurement system that’s highly customized to your company’s needs and culture, we set out a step-by-step process in our separate guide.
It’s easy to get overloaded with too many innovation metrics—in fact, we regularly find companies are collecting metrics they don’t even use. Too many innovation metrics means wasted time (spent collecting and reporting data) and the potential for sending confusing or contradictory signals to decision-makers.
We help you avoid this pitfall by establishing a set of functions your innovation measurement system should perform. Based on the decisions required to achieve those functions (e.g., should we increase / decrease funding to our innovation lab that focuses on early stage and breakthrough innovation projects?) we identify what information about innovation performance is needed and specify which innovation metrics to use to provide that information.
The diagram below shows the typical functions most companies want from their innovation performance measurement system. We’ve used these typical functions to focus our recommendations for innovation metrics.
Innovation teams working directly on projects need different innovation metrics from those responsible for an innovation portfolio or for innovation across the whole organization. BUT at the same time those innovation metrics all need to tell a consistent story. Otherwise you’ll have people making decisions based on different information, which is a recipe for conflict!
The guide specifies innovation metrics to use at each level (for innovation leaders, innovation portfolio managers and innovation project teams) that tell a consistent story.
Innovation metrics at the front end of innovation are particularly challenging. There tends to be a lot more ambiguity. At least at the outset, it might be unclear who the potential customer is, what need(s) you’re seeking to address and, of course, what the actual product or service might be. This ambiguity means the focus of innovation metrics needs to change—away from forecast outcomes (like potential revenue) and towards learning.
The guide sets out specific considerations and illustrates how to proceed.
Our guide sets out the basics on which innovation metrics to use. To keep you moving, we highlight key next steps you’ll need to address, including: