Organization Culture and Innovation

Measuring innovation input, progress, and output will help companies mitigate risk. It is not always easy to figure out the right mix of metrics to use to measure innovation. Some organizations measure what is easy rather than what is important. The most important function of measuring innovation is to ensure the project is moving in the right direction. Innovation metrics allow managers to see if the team is doing enough of the right kind of activities to be able to actually achieve results. Measuring innovation helps to guide resource allocation, hold the team accountable for their actions and responsibilities, and assess the effectiveness of innovation activities. (Note that some of these concepts were discussed in the chapter on innovation risks).

Despite these challenges, businesses can measure innovation with a mixture of the following:

• Timesheet metrics
• New product or service metrics
• Financial metrics
• Training and staff competency metrics
• Management and leadership metrics

By committing to measuring innovation, the company can encourage employees to be more conscious of the need for creativity and fresh thinking, no matter what their day-to-day responsibilities might be. If management regularly measures the company's innovative output and shares these measurements with employees it will help encourage staff to think about innovation accountability on a daily basis and take responsibility for finding new ways of doing things.

Not all metrics work for every company or every project. There are, however, certain types of metrics that every innovation team should pay attention to, including:

• Number of new ideas in the pipeline
• Number of innovation projects started
• R&D spent as a percentage of sales
• Revenue/profit/growth from new innovations
• Number of new innovations launched in a specific amount of time