Legendary business consultant Peter F. Drucker once said, “You can’t improve what you don’t measure.” And we couldn’t agree more. While some believe that innovation is a result of natural genius, we shouldn’t underestimate the power of deliberate creativity and structured effort. Here, we must quote Drucker once more — “Most innovations, especially the successful ones, result from a conscious, purposeful search for innovation opportunities.” So, if innovation is a constructive practice, you can measure innovation using various key performance indicators (KPIs) — just like your other business goals.
Now, let’s dive deeper to explore what measuring innovation achieves and how it contributes to increased success!
4 Benefits of Measuring Innovation
1. Your Team Feels Encouraged
Your innovation management team’s hard work leads to game-changing products and services. One of the most effective ways to keep them going is to measure innovation in your organization. If you regularly track your company’s output against various innovation metrics and let your team know how each of their contributions matters, they will feel encouraged to do more and better.
Let’s take the example of electronics giant Haier. Apart from practicing detailed innovation measurement, the company offers one of the best recognitions to its innovation team. Haier names new products after the employees whose ideas led to the development of the final product. If that isn’t encouraging, what is?
2. You Can Better Plan Your Goals
It is no surprise that every company sets some particular goals in all aspects of its business. This includes the innovation department. Setting measurable innovation goals enables you to conduct your projects in a more systematic manner. But, the process shouldn’t end with just framing the goals. The next vital step is to measure your innovation metrics over time. This will provide you with a clear idea regarding your team’s progress, which further allows you to set new goals or modify existing ones considering the current status and scalability.
3. Measure Innovation to improve Resource Allocation
Resources — no matter if it’s talent, time, or budget — are essential for developing innovative products or services. So, companies need enough of them to go ahead with their projects. This is where a lot of organizations struggle. Without proper data to back up requirements in each segment, innovation teams often go with the flow and hope that things will somehow work out. But this isn’t really the best approach.
To avoid undesirable resource bottlenecks, you should measure innovation metrics. This enables you to make informed decisions to put your money and team in the areas they are needed the most – making your innovation pipeline more efficient.
4. You Keep the Company’s Investors Happy
As mentioned earlier, resources are for innovation what water is to germinating seeds. It goes without saying that you must keep your company’s investors satisfied as they provide you with the capital that lets you bring your ideas and projects to life. So, if you measure innovation and present to them the KPIs that you achieve, they will be able to witness direct positive results of their investment in your company’s innovation. This increases the chance of them supporting your future ideas and overlooking occasional innovation failures.
Now, let’s hear from you — do you already measure innovation in your company? If yes, what are the KPIs that you follow? Get in touch & let us know!