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Innovation: Trying to Foster Creativity by Applying Metrics
Everyone talks about innovation and disruption and changes across all industries. Harvard Business Review reports that established businesses are worried about disruptions and have set up innovation teams to make sure the business remains strong and competitive. Companies like AIG, Disney and Intuit all have put programs in place that try to spur innovation.
But companies are struggling in their attempts to be innovative. A survey by McKinsey found that while 84 percent of businesses say that innovation is key to the success of their companies, 94 percent of managers were dissatisfied with their company’s innovation. How do or how can managers judge and measure something like innovation? Can an estimate of how well innovation is occurring be anything other than subjective?
While some say that it isn’t really possible to measure innovation, or even that metrics that are too strict can easily kill off innovation, there are a number of on-going attempts to try to create innovation metrics.
Robert F. Brands identifies two types of metrics:
- Leading. Metrics that give a clue as to where the business is headed for innovation. Things measured might be patents filed, ideas created and development time logged.
- Lagging. Metrics that can quantify how well the business is achieving innovation. Here things measured might be patents granted, expenses, revenue and industry turnover.
At a very high level, Lisa Bodell, CEO of futurethink, wrote a piece for Forbes where she identifies three stages or categories of metrics:
- Input. Measurements that determine what resources and capital were funnelled into innovation projects
- Development. Measurements that determine the quality and success of on-going innovation projects
- Output. Measurements that determine the value that was derived from innovation projects
Mike Brown, founder of Brainzooming, says that innovation metrics need to use a “whole brain strategy”. He identifies three types of innovation metrics:
- Culture Metrics. Metrics might include how many people participate and whether they’ve been appropriately trained in creative and strategic thinking.
- Process Metrics. Metrics that measure the number of ideas generated and the number of patents filed.
- Return-based Metrics. Metrics that look at the ROI and ROC of new products and services
