Innovation Can Be Measured
Some people argue that innovation is impossible to measure. If innovation isnot measured it can’t be managed. You can’t prove to doubters that what youare doing is worthwhile. You won’t know whether your efforts to innovate areimproving. On the other hand, if you measure the wrong things you will managethe wrong things, reward the wrong behaviour, and screw up innovation efforts.
Measuring innovation deserves some thought. Your measurement efforts need toreflect the process and purpose of your innovation efforts. You want to knowwhat is happening, identify new opportunities, let everyone know how to getinvolved, and share how innovation can help. Many attempts to measure failbecause they are too complicated, too much effort, and too removed from theway that innovation works.
are a popular measure of innovation. The logic here is a company willpatent its most important innovations and that increasing the number of patentsis the same as increasing innovation. If only it was that simple! What about theinnovations you can’t patent? Patents are not relevant to services. How do youmeasure the difference in quality or innovation between patents? You combinean old patent with a new business model: Are you or the patent owner mostinnovative?If your industry generates patentable innovations, measure them. Compare yourcompany to your industry and competitors. Group them by type, originatingteam, and likely impact on the business. Track where they are used and how theyhave helped financially and competitively. Evidence shows they are a goodpredictor of future new products. Just remember there is no clear link betweenpatents and financial performance. There’s much more involved.
Balanced Score Cards
offer a powerful way of measuring innovation. They followthe idea that measuring anything can only be as good as your understanding of what you are measuring. As your grasp of innovation grows then you are betterable to measure what matters.