Key considerations when measuring innovation

by | Sep 20, 2023 | Innovation

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Innovation is something different that creates value. You can innovate internally, such as improving employee engagement, or externally, such as improving how you deliver services to customers.

Every organisation loves to say that they are innovating but how do YOU know if YOUR organisation truly is?

You need to measure it.

Measuring innovation makes it blatently clear as to whether innovation is genuinely happening, or a marketing buzzword.

Ok, given you should measure innovation in some way, WHAT can you use to measure it? You need to think carefully. Don’t just copy from others.

Your metrics must align with your organisation’s innovation approach and strategic objectives.

When thinking about metrics, you need to consider which associated behaviours will be promoted. For example, if you choose to track the number of innovation experiments to test ideas with customers, you will need to consider how you define an experiment, and that you might be encouraging a surplus of unnecessary experiments. Also, the number of experiments will depend on how risky the innovative solution is. For low-risk solutions, little experimentation will be needed, high-risk, more experimentation.

Basically, there are two important types of innovation metrics: Activity and Impact.

Activity Metrics

  • These will help you determine if employees are engaging in innovation. These metrics should link directly to your organisation’s innovation process and seeks to understand if employees are following the process. Given a process will generally involve finding problems, solutions and implementing them, tracking these is a great start. You can find out more about The 5-Step Innovation Process that we train & coach in here. 
  • Examples of things you could track that align with The 5-Step Innovation Process include:
    • Number of problems identified & aligned with key stakeholders to take forward in the process (include a list of these problems)
    • Number of solutions found that will be taken forward in the process (include a list of these solutions)
    • Number of solutions implemented (include a list of these)

Impact Metrics

  • These will help you determine if innovation efforts are helping to achieve the organisation’s strategic goals. This is where the rubber hits the road. What overall impact or outcome you are trying to achieve with innovation?
  • Examples include:
      • Increased revenue/reduction in costs
      • Improved customer experience

A third component to measure is..

Innovation Climate & Capability

You will see climate refers to your employee’s perception of the organisation’s culture.

Do employees think the organisation is innovative? Do they understand what innovation is and that an innovation process exists? Do they feel safe to speak up and share the problems we see around us, or share our ideas?

Your Innovation Climate can be measured with an annual Innovation Climate & Capability Survey. The outcome of the survey enables you to identify strengths and gaps where the organisation can focus on improving.

Improving the innovation climate is like improving the quality of your soil before sowing seeds.

It creates the right environment that will increase the likelihood that innovation activity will occur and lead to impact.

Have any questions about innovation? Need to measure your Innovation Climate & Capability? Contact us.

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