Innovation Metrics – Part 1

1 08 2008

Metrics are one of the most important elements of an innovation program’s success – determining everything from a program’s future direction – to whether a program even gets funded the following year.  Yet metrics are probably the least understood, and most misused activity in a corporate program agenda.  Understanding what to measure, and how to benchmark your performance is paramount to achieving both recognition and validation at the senior executive level – so how do you get it done?  I thought I’d paste in a step by step guide over the next few weeks to let you know!

Understanding the Innovation function

1. Start with Strategy – Key to understanding the metrics used to measure your innovation program is understanding what the real goal of that program is.  Your whole program should be focused at trying to help the company achieve its strategic objectives (if it’s not – make sure it’s realigned to do so or you risk having a marginalized program that will be cut at the first opportunity!) – so it makes sense to start your journey into metrics by getting a better understanding of what it is exactly that the organization is trying to achieve – where does it want to go? What are the barriers stopping the company from achieving it? Where are the key competitive forces?  These and other questions will lead you into a better understanding of how best to target the activities of your innovation efforts to best benefit the organization as a whole. 

Don’t be fooled into believing that the answer will always be via the creation and development of the company’s product set either.  Sometimes it could be a need to dramatically improve process efficiency that will drive a company forward. For other companies it could be a need to develop innovative business models to drive profitability in the forthcoming years – and yet others might be driven by a need to get out of a commoditized marketplace and develop an entirely new value proposition and new client base altogether (see my earlier White paper on Innovation Dimensions for more on the different dimensions an innovation program can and should be attacking).  Even within the same industry – different players will typically be driven by different environmental and competitive factors that will lead the decision to pursue a particular business strategy.  This strategy should then lead both the direction of your program and the metrics you use to measure the program’s effectiveness. In the same way that companies do not typically simply copy another’s business strategy blindly, neither should you simply copy their innovation metrics and benchmarks – as what’s appropriate for one company in a certain situation could be disastrous when applied to another.  With metrics, the wrong metrics will give you misleading information on your ability to help meet the company goals

I’ll be adding more in weeks to come! 

Non-Value Events and the Pursuit of Expansion

30 07 2008

I don’t think any client ever hears me say “focus on the value” enough times for the most part – but I will accept that there is a time and a place for running events that don’t directly add value creating ideas into the pipeline. 

One great example of such a time is in helping to broaden and expand a program by running an event that is broader in scope than your standard event in order to engage the most amount of people possible and give as many as possible a good experience of using the methodology.  

One recent client in the aerospace industry actually did this quite well – as part of their initial pilot period they ran both value enhancing events, but also ran one event for a senior marketing VP which was much ‘softer’ in nature – focusing more at understanding the characteristics of a new market they were thinking of attacking.  The value events drove some great results and perceived ROI despite being reasonably technical in nature and as a result had low participation rates. The non-value event got a fair amount of ideas on all sorts of subjects related to the new marketplace. Whilst it didn’t generate any actionable ideas, it did however generate a lot of interest in the tool from potential event sponsors and enquiries about how it could be used. The client then pointed to the ROI figures from the value-driven events to convince future event sponsors of what could be achieved with it. 

I think companies nowadays should drive a mix of events – and as with so many things in business, I suggest using the trusty 80:20 principle for figuring out the correct split of value to non-value: 80 % of your events should be focused on driving new and novel value for the company. 20% of your events should be focused on topics/methods designed to market the innovation program to a wider audience and thus expand the overall reach of innovation within your company.

“I ain’t got nooooboooodddyy….”

2 07 2008

“We’d love to innovate, but we just don’t have the resources – everyone’s just too busy on more important projects”…. I can’t tell you the number of times I’ve recently heard this from both clients and prospects that I’ve been put in front of in the last few months. There’s a general impression that Innovation in itself is a separate project that you do in addition to your other workload – “PHOOEY!” I say (not sure on the spelling of that word btw – but am sure you get the point). 

What I don’t understand is how clients get to thinking like this. Innovation is not a goal in its own right – it’s a methodology, a discipline, and a strategic tool to achieve your corporate goals – not a goal in its own right. You’re most successful when you’re using it as a way to help the company to find new, novel, and better ways to achieve what it’s already motivated to do – not when you’re floundering along trying to swim against the flow that the company is trying to go in. 

Ah – but what about companies like Nokia, for example I hear you say. Companies that have  changed and morphed through time (in Nokia’s case from forestry, to rubber, to mobile communications so far) by being constantly innovative? What people fail to acknowledge is that Nokia was actively trying to change – it was part of its strategy to be open to and drive new business models away from their core business – business models that eventually proved more profitable than the previous ones and quite rightly became the main focus for Nokia.  Innovation you see, can change the entire company in many weird and wonderful ways – IF your company WANTS to change in those directions.  It’s no use trying to force change that the organization isn’t open to – you’ll just waste a lot of time and effort that will ultimately fail and will not be positively recognized by your leadership. 

Instead – take the company strategy and identify the direction the company wants to go in and the goals that it has set for itself. Identify the people working on projects aimed at progressing the company towards that goal and offer them a different and better way in which to achieve the work that they’re already trying to get done.  They’ll already have the desire, enthusiasm, commitment, and more crucially – resources – to get the innovative ideas and approaches your team is bringing to the table implemented.  And at the end of the day innovation is about getting things implemented and to do so in a way that adds value to your company – this approach does both.

Can Grassroots Innovation Work?

27 06 2008

I just spent the day at a client today who’s trying to make a grassroots innovation program work.  Specifically, they’re trying to build up an innovation capacity ‘under the radar’ – choosing to drive their internal program without specific knowledge of, or support from, the very top of the company. However – best practice is commonly to start with the top and work down – it’s just easier to have that mandate and strategic direction with which to work with. However – not everyone has that luxury – and whilst much harder to drive an innovation program from the bottom up, it’s far from impossible – as long as you follow some guidelines: 

  1. Start with strategy – just because you don’t have top level support, doesn’t mean you don’t need to follow the company strategy. In order to become successful, and to build the stories and gather the credibility needed to grow your program – you need to be helping the organization (and the individual managers you’re enabling) to achieve its goals. Innovation can change a company completely – Innovation is about coming up with value-creating change – but an organization won’t want to change in a direction that is against the direction the company wants to go in. You could come up with a fantastic idea for a new beverage that would revolutionize the drinks world, but if your company is determined to attain and maintain a leadership position in the aerospace industry, you’re wasting your time developing that idea. It’s simply not productive to “swim against the current” – your goal as an innovation leader is always to help the company achieve its goals – not try to convince them of goals they do not have. 
  2. Start conservatively and focus on value creation. At this customer today, when talking about barriers to the innovation strategy we were formulating – one of the team members brought up that she’d been trying to get the company to realize the value of open innovation for years – they simply weren’t open to outside ideas.  There’s a common problem in many grassroots innovation programs – and it’s especially problematic when you have visioning conversations and strategic thoughts – of trying to implement an innovation system that is several generations ahead of what the organization will accept.  Cultural change is not an overnight process – at best it will take at least 18 months to make a positive behavioral change in a large organization – and that’s assuming you’re constantly re-enforcing the change behavior you’re looking to move to.  To take this example as an illustration – when looking at what the organization needs to do in order to achieve its long term goals, it’s easy to see an ideal system that incorporates outside ideas and insights from customers, suppliers, and others in addition to all sorts of complex systems. However – a grassroots system needs, more than any other, to be built off of credibility creating successes.  Focus on creating value utilizing a disciplined approach to idea capture and development and you’ll begin to build successes you can build on and expand off of. For example, with this client today, they need to start by driving key projects with divisional VPs utilizing internal ideation to create new product ideas that have the potential to create value. Once they’ve achieved that, and built up some credibility “credit” – they can then use that to try and expand the use of the system through less conventional techniques – not only because the business sponsors will be more open to letting you experiment, but also because the organization as a whole will be more used to the concept of ideas as a source of value – focusing more on the value concept than where the ideas come from. 

Innovation in a Recession

17 06 2008


Most talk around recessions is doom and gloom – but there is one business discipline that booms during a recession – innovation.  In fact, recessionary environments have been responsible for some of the biggest booms in corporate innovation history. The reason for this is that recessions increase the need for companies to change and be different from the pack.  Changes can be forced in:

  • business efficiency
  • business models incorporated or devised
  • what the customer wants
  • what the differentiating factors for a particular product segment or industry are 
  • and many others 

In a recession things work differently, so look for how they’ve changed and target your innovation efforts at adapting to and exploiting those changes!

Embracing Democratic Innovation

20 05 2008


In speaking to many clients who are embracing collaborative innovation whole-heartedly, I frequently get clients who mention that they want to allow participants to take part in the evaluation process too. A natural desire in reality – especially in the age of open software development, crowd-sourcing, and  other collaborative efforts going on in the world out there.  

Personally I think it’s a great idea…but maybe not for the corporate environment. You see – whilst for certain topics – especially those of a trivial nature – allowing a crowd to make the decisions as to what’s good for you is fine as there is low risk in low value projects going wrong – however, for more critical projects, I find very few companies are happy to commit themselves to implementing WHATEVER the crowd decides is top rated in a given ideation session.  You see – the risk is simply too big for most people – and whilst the philosophy behind democratic decision making is very commendable – how many people out there are really willing to risk the success of their careers on the decision making capabilities of a mob? Very few I think – in fact I have yet to find one as most clients back off from this idea when faced with the reality of the fact that if you ask people to vote on their favorite ideas, they’ll be expecting you to agree with them and implement the top rated ideas. If you don’t, you end up alienating the audience for future sessions. 

People need to feel like they own decisions that affect them – it’s one of the many reasons the old suggestion box system of old didn’t work – it relied on people being open to ideas they never asked to get and had no interest to implement. By making it the eventual implementors’ job to evaluate the ideas they will eventually implement – you increase their commitment to implement and allow them to have accountability over their actions. Why would you ever want to take away accountability? 

Why Now?

14 05 2008

I’ll be quite frank here – For years I ran the Corporate Innovation Blog within my role at Imaginatik – but found it hard to keep up for several reasons: 

For one it was supposed to be a company viewpoint from Imaginatik and I rather fancied being able to express my own, unadulterated and unedited opinions – and not just on other people’s articles. Secondly, A lot of these opinions that i wanted to express were on pretty diverse topics, and although primarily around innovation, I think some of my best stuff is on other topics. And thirdly and finally – I just found it hard to keep it up to date as I had to keep using which required me to be online for long periods of time. 

Well, I’m now the proud owner of a new Macbook Air which, with iWeb installed should,  theoretically, make it much easier to maintain a blog as I can do most of my postings offline seemingly easily – although as this is still my first posting, it’s hard to see more than just the nice simple interface Apple’s giving me!  As for the first and second issues, well this site is for me – not Imaginatik – allowing me to express myself on personal ideas and opinions – so here’s hoping you enjoy… 

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