Websites are flush with lists of strong, reliable performance metrics for measuring innovation efforts. For example, percentage of sales from new products, growth rates of new customers, Selling, General and Administrative (SG&A) expense as a percentage of revenue, inventory turnover, R&D spending and employee satisfaction have all been touted as effective metrics. Another approach to tracking progress falls into the category of figuring out what went well or what went wrong. Such an approach can take into consideration an array of cultural or behavioral characteristics such as trust, engagement, openness, risk and the list goes on.
In this article we explore tracking progress by examining the flow of success through the innovation system. The strategy is aligned. The portfolio is robust and balanced. However, is the flow of innovation successes sufficient?
Most companies invest in innovation recognition programs utilizing an array of methodologies to judge submissions detailing achievements. The inventory of submissions is largely ignored after the glow of the award ceremony has faded. Yet this inventory is an informational mother lode on the flow of success within a company. Consequently, a serious analysis of the following is warranted:
- What is the achievement?
- Who was involved? (team/single contributor)
- Where are the people located? (unit/geography)
- What was the timing? (timeliness/duration)
- What was the impetus of this endeavor?
- How did they make this happen?
Answers to these questions can provide insight into the flow of innovation successes. Assuming an innovation recognition program already exists; adjusting the application form to capture the appropriate data is inconsequential. Tabulating the data in an innovation system is also relatively simple.
First and foremost, a recognition program advertises what a company values. Simply by counting the number of submissions within a unit or geography it will be clear whether most successes emanate from hot spots or whether successes flow proportionately across the company. One company’s analysis showed that the number of submissions was essentially proportional to the number of employees in a given geographic region or business entity. In other words, achievements were proportionately distributed across the company. Project teams closer to the situation (including the issues, customers and opportunities) are delivering achievements that fuel this company’s competitive advantage.
Secondly, innovation recognition programs attract submissions from those who believe they can win. Categorizing achievement activities by functionality (process improvements, new products, new business efforts, customer retention, etc.) or corporate departments (HR, Finance, R&D, IT, etc.) clarifies which activities are thought to be valued. A company’s analysis showed that submissions addressing consumer concerns were limited in number. Ascertaining whether the innovation portfolio is lacking projects that deal with consumer concerns, whether those projects are coming to fruition, or whether they are as successful as anticipated becomes easier. Regardless, this relatively simple analysis of the submissions inventory can shed light on constrictions in the flow of successful innovations to solve our business issues, achieve our goals, and meet our financial expectations. Deeper analysis could provide an even richer view of the situation.
Finally, a recognition program elicits description of the elements that contributed to the achievement. By evaluating the components necessary for a successful innovation system, it will become clear how much, how often and so on. Another company’s analysis showed that the innovation components that anchored the successes were adaptations from competitors; whereas another company’s analysis showed significant innovation in new products developed from new engineering processes.
Tracking progress by analyzing successes contained in the innovation recognition program’s inventory of submissions can provide unique insights on the flow of innovation. Thus, answering the questions whether we are innovative enough to solve business issues, achieve goals and meet financial expectations is streamlined utilizing tools already in position.
About the Author
Dr. Carol Pletcher is one of the world’s top 25 Innovation Champions, as chosen by Business Week Magazine in 2006. As Cargill’s former Chief Innovation Officer, she led the development and implementation of the Innovation effort. Carol enjoyed a dynamic, cutting edge career with Cargill, Inc., one of the world’s largest food companies. Currently, Carol is President and CEO of her own consulting organization, Pletcher, Inc.