Innovation takes time. The process of taking an idea through to project completion is both long and complex. Once you’ve come up with an idea, made sure it aligns with your organizational goals and tested it to see if it’s worth progressing, it’s time for the next stage: measuring innovation performance.
In order to do this, you need the right analytics in place to check that ideas, tests and projects are all progressing as they should. Apart from ensuring you’re not wasting your time and money, measuring performance will actually give you the best chance of a successful outcome.
Innovation can be both costly and time-consuming. If you don't measure the progress of a project, how do you know what’s working and what isn’t? How do you know if you're heading down a blind alley and wasting your resources in the process?
Using metrics will help you see clearly what’s working and what needs improvement. Your idea may be perfectly aligned with your strategic goals and it may have passed the testing stage with flying colors, but it’s all too easy for projects to go off track.
Keeping a close eye on how the project moves forward will not only help you stay on course and stay aligned with your organizational goals – it will actually allow you to establish where to go next.
Measuring your progress has another important benefit. It gives you something concrete and evidence-based to show to your stakeholders so they can actually see the value of innovation.
For metrics to be of any use, they need to make sense. Each project is different and has different objectives, so there’s no point using a one-size-fits-all set of metrics. You need to find the correct metrics for your project and your team. So where do you start?
The truth is innovation is hard to measure. It’s more abstract and less tangible than other areas within a business, making it immediately more challenging to know which metrics to employ.
The nebulous nature of innovation also makes it tricky to define. If you can’t pinpoint exactly what the purpose of your innovation is, it becomes almost impossible to measure performance.
That’s why it’s crucial to define each innovation project in advance. Once you know, it becomes easier to implement the most appropriate metrics.
The first rule is: you need to measure what matters to your organization. If your organizational goal is to become the market leader in five years, your innovation goals are likely to center around providing better customer service, improving your products or giving better value to customers. In addition to this, your goals are likely to vary from project to project. The metrics you employ, therefore, should reflect how effectively your project is helping you move toward a particular innovation goal.
Innovation metrics fit into two categories: input metrics and output metrics.
Input metrics give you an idea of how well your resources are being used. Are your funding, time and other types of resources being utilized in the best way or do you need to make changes?
Output metrics measure what you’re getting in exchange for your resources. These types of metrics allow you to see if you’re actually working towards something worthwhile.
It’s easy to see why most businesses focus on output metrics (after all, these are likely to be more satisfying than focusing on things like cost). However, input and output are inextricably linked – and both should be used.
Your output metrics might give you a brilliant prognosis but how do you know what it’s costing? Or maybe you could reach your desired outcome faster by making changes to how you manage your resources. To get the clearest, truest picture of how you can improve your innovation performance, you need both types of metrics in place.
What you choose to measure depends on the specifics of your organization. For example, you could measure areas like leadership, business capability and return on investment.
For each of these, you need an input metric and an output metric. If you’re measuring business capability, your input metric might be the percentage of employees who have received innovation training. Your output metric could be the number of new opportunities gained through innovation.
Where you are in your process will also influence how you measure performance. The front and middle parts of the process require more innovation accounting metrics (ideation rates, time taken to learn, experiment-to-learning ratio). Metrics like ROI would naturally be more useful later on, towards the end of the process.
As always, communication is key. Your innovation metrics need to be seen and understood by the relevant people – particularly stakeholders. In order for them to be able to see the project’s progress and impact, your method of conveying its metrics needs to be clear and uncomplicated. You might be measuring some complex metrics so it's crucial you have a way of ‘translating’ them so that they align with the needs and understanding of every single stakeholder. Acclaim Ideas makes this easy.
Acclaim Ideas is designed to make your innovation performance metrics accessible to everyone. Our analytical tools help you track your progress against your strategic goals, measure your ROI, and track the current and projected value of your project. All of these metrics are then used to generate data visualizations, allowing you to share complex information in a quick and comprehensive way.
Whether you’re looking for a simple visual data snapshot or an in-depth report, Acclaim Ideas allows you to share exactly what you want, when you want.
Innovating without the right metrics in place is the equivalent of trying to find your way in the dark. By measuring your performance throughout the innovation process, you effectively shine a light on what’s worked so far and where you need to go next. When you measure the right things in the right way and make your data easy to interpret, you save time, money, and get the most value out of your innovation projects.
Learn more about how Acclaim Ideas works here – and don’t forget to sign up for a free demo