29 Evaluating innovations

Evaluation is assigning a value to an innovation or project in order to help assess or determine how successful it was. In most workplaces, assigning values using the same currency that the organization operates with is the easiest way to managing the expectations and resources required to implement these innovations.

Evaluations are useful for making the following decisions:

• Deciding if a proposed innovation is worth funding by comparing the forecasted costs with the benefits.
• Comparing one proposed innovation with other proposed innovations that may be competing for the same limited funding.
• Assessing how successful a completed innovation was in achieving its forecasted cost and benefits.
• Assessing if a completed innovation is worth continuing.

“True genius resides in the capacity for evaluation of uncertain, hazardous, and conflicting information” — Winston Churchill

There are different ways to evaluate an innovation or project.

The most basic way is to compare the cost with the benefit. If the cost is higher than the benefit that it is not worth doing until adjustments are made to make the benefit greater or the costs lower. For example, if the total benefit of project A is $10,000 and the total cost is $1,000 then it is a promising project. If the total benefit of project B is $10,000 but the total cost is $20,000 then logic would dictate that it is a project that shouldn’t be…