Week 11, 2021 — Issue #143
The 4Ps of Innovation Management Metrics: Portfolio, Process, Practices, and Projects
Each week: three ideas on and about the future of work. This week: four ideas on Innovation Management Metrics.
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I’m getting close to the end of my course on ISO 56002 — the new standard for innovation management systems. It’s exciting. And I’ve been reading about metrics in the last couple of weeks — i.e., how organizations can measure innovation at scale and why — and I’ve distilled that learning into a framework I’m calling the 4Ps of Innovation Management Metrics:
Allow me to explain:
1. Portfolio
Organizations looking to improve their return on innovation should consider measurements in four broad categories. First up is the overall innovation portfolio. Specifically, they’ll want to ensure an innovation mix that is in line with the organization’s innovation intent. For example:
- The ratio of innovation types (see w92021)
- The ratio of closed vs. open innovation initiatives
- The ratio of innovation success vs. failure
2. Process
Next, organizations should consider a series of metrics with which to assess innovation input, throughput, and output. And while this might sound like a great way to stifle creativity, it can actually increase return on innovation as it enables continuous improvement. For example:
- Ratio of ideas that lead to new revenue
- Avg. time to market for new innovations
- Number of new releases per annum
3. Practice
Related to the above, the organization should also consider metrics that assess its innovation practice: the set of activities, methods, and tools that it deploys in order to discover and realize value. Doing so will help them see what does and does not work in their specific context. For example:
- The ratio of innovations that deploy Agile methods
- Avg. number of customer tests per launch
- Team constellation and size per initiative
4. Projects
Last but not least, the organization must carefully consider the metrics with which to define and measure the success of individual initiatives. I’ll expand on this in next week’s issue, but in short: organizations should take care to set the right incentives at the right time. For example:
- Project cost vs. budget
- Customer Net Promoter Score (NPS)
- Economic value estimates (EVE)
Inspiration for the above comes from an article titled Creating Better innovation Measurement Practices as well as chapter 23 in Keeley’s 10 Types of Innovation.
That’s all for this week.
Until next time: Make it matter.
