How to avoid the innovation management analysis-paralysis

You may easily find yourself overwhelmed with the amount of innovation metrics you can choose from. But you simply cannot get mired in endless reports, comparative numbers and hundreds of percentages that may have nothing relevant to show you.

Based on experiences with our clients from across several countries and industries, we, at Exago, have come to identify the chief indicators you should contemplate at each phase of the process: from the investment phase through to performance and development and, finally, output and evaluation.

These indicators consider three dimensions we believe are fundamental: human capital and organisational culture, the ‘people factor’ as the cornerstone of any innovation programme; financial and accounting plans, a stronger focus on growth and sustainability; resources acquisition and development, namely, tangible and intangible aspects, such as assets and knowledge.

measuring innovation

Keep in mind this framework is elastic. It’s a chart to identify your own metrics set, according to your specific challenges. These three steps will help you decide which to adopt:

a) The most important step – define how innovation will serve the strategy and purpose of your organisation;

b) Establish the nature of the results and stabilise a set of priority metrics (and practices) of input, process and output;

c) Make the process evolve by including new metrics and excluding aspects difficult to measure or those that do not suggest process improvements Most of all, remember you don’t have to start from scratch and you can’t freeze up in any phase. Innovation is a process of trial and error, by its very nature. So, build a solid initial plan, including top metrics to track, and be ready to learn and adapt as you progress.

READ MORE:
If no magic formula exists for innovation, how could one exist for measuring it?

FROM THE START:
How can you measure innovation management?

Pedro do Carmo Costa, Exago’s director and co-founder
pcc@exago.com

TIP: How to measure idea management intangible returns

Photo: by zacklur via photopin cc

Arthur D. Little’s 2013 ‘Innovation Excellence Survey’ found a correlation between capability in innovation measurement and success. Yet less than 20% of companies believe they have a good idea management measurement capability. If you run a search on the web, you find many different approaches and models to do it … however, you might be neglecting much of the real value of your initiative if you look only for tangible outcomes.

It is astonishing how, especially in the last decade, innovation efforts have delivered profound and often unexpected alternative results. These deliverables have been so significant that in some cases they have overshadowed the outcomes themselves. For example, the implementation of idea management systems often yields benefits far beyond the ideas they generate. This might include…

Engagement outcomes
The feeling of belonging is embodied in these collaborative initiatives because participants can voice their contributions to the future success of the company (e.g., ‘I feel that I am being heard and my voice matters’).

Strategy alignment outcomes
Idea management systems, when well structured, are a very powerful tool to communicate strategy and direction. By defining the right idea challenges, derived from company leadership’s strategic direction, you are embedding important messages in your organisation. For example, if entering a particular new market segment is a strategic goal, by making it an innovation challenge to generate ideas you are also communicating and embedding this objective throughout the organisation.

Talent spotting
There is always hidden talent within a company. Idea management systems create an equal opportunity democratic platform. You may find that there are people lower in the corporate hierarchy who consistently have the best ideas.

Higher execution levels
The fact that the ideas are born within the company leads to more effective and swift implementation (e.g., ‘If it’s my idea being implemented, I will go the extra mile to make it happen’).

All these outcomes are intangible or at least harder to measure in terms of economic value. Finding a way to measure them (e.g., comparing employee responses to statements such as, ‘I feel like an important part of the organisation’ or ‘I understand our company’s primary business goals’) assures that you don’t lose credit for the many intangible positive results delivered by your initiative.

Insight: ‘In the end, the best talent will migrate to those firms that have inspiring goals, along with process, culture, incentives and investment that seeks out exciting innovation-driven growth opportunities. Those firms that attract that talent into a superior innovation culture will win in the global marketplace.’ (‘Demystifying Innovation’, PWC, 2011).

Pedro do Carmo Costa, Exago’s director and co-founder / pcc@exago.com

FROM THE START: Innovation looks easy – it’s not

Performance evaluation in Idea Market

Organizations using Exago’s Idea Market platform can take advantage of participation metrics at the user level. This allows administrators to identify which employees are actively engaging with the software and those who are not, determining participants’ interest in innovation before acting accordingly.

Figures such as the number of submitted ideas, comments, investments, and visits can easily be translated into more advanced metrics like the proportion of market-approved and implemented ideas. Other useful statistics include the ratio of investments in approved and implemented ideas vs. non-adopted, and the rate of rejected ideas in relation to the total number of investments.

This activity data can then be sourced to geographic, social, or demographic information about the user base, allowing companies to fully analyze engagement and motivation across different groups.

Exago’s Idea Market helps harness the collective intelligence of an organization, intensifying the voice of employees and giving them the power to contribute their knowledge to company progress.