Measuring Innovation Sustainably
One of the biggest challenges for established organisations is knowing how to measure success of innovation projects, and how to justify investment in projects that don’t naturally align with their business as usual operations.
Knowing which ventures to back, and which ones are stopping you from transforming, is difficult when your organisation steps out of its comfort zone. Successful transformation is all about knowing how to bring clarity to your innovation strategies through measurable insights or Key Performance Indicators (KPIs) that align with your long-term objectives.
From a high-level perspective, we can organise innovation metrics into one of two categories:
- Input — Measuring the number of innovation enablers your business invests in. For example, input metrics can include the hours of employee time allocated to innovation exercises or the total value of investment into innovation projects.
- Output — Measuring whether your innovation investments have the desired effect. For example, two common output metrics are the number of new products released to the market in the past two-three years or the revenue generated from these products.
However, the most common error for established organisations is to apply the lenses of their current business to evaluate innovation projects. Innovation ventures are likely to be misunderstood or dwarfed by your existing business activity if you fail to adjust your performance metrics or align your approach with your core business objectives.
Read our in-depth look at measuring innovation capabilities and choosing the right corporate innovation metrics for your organisation to fuel forward-thinking ventures.