• Finding #10: Outside of Patents, very few companies measure
the amount of innovation that is created.
Metrics are essential to making anything happen in business. To benchmark progress and relative advantage, metrics are vital. Without Metrics, you can’t manage, change, reward, or value anything.
Metrics are more than just after-the-fact gauges of something that has already been done. Effectively used, metrics set the strategic standard for accomplishment before launching an innovation program. When Metrics are absent, there motivation is minimal. Whats more, without Metrics, there is no way to link Rewards, and thus turn ideas into actions that produce results.
When queried about whether they measured and then rewarded innovation, companies responded with blank stares and said it was a good thing to think about.
- Without a powerful and accurate set of Metrics linked to Innovation, nothing gets done. People put their energies and time into areas that will be rewarded. Metrics move Innovation from the mind to the hands and feet.
- The Quantity of Innovation is not as important as the Impact of Innovation. Having great amounts of innovation is not as important as whether the innovation will contribute to the top or bottom line. As Edison said, “ I will only invent things that people are interested in buying.”
- When working across corporate borders, the metrics must be jointly aligned, else there be dysfunctional behavior between members of the alliance.
- Positive: One company measured innovation, and rewarded its staff and its alliance partners. Competitors were left in a quandary, not knowing what the hidden secret was as there plants were closing.
- Negative: A leading sports consumer products company commented: “Our leading supplier came to us each year with ideas for new innovations for the main component they provided us. We were measured on cost reduction, so we responded with a demand for a 10% price decrease. Three years ago our largest competitor, with whom the supplier also did business, adopted the new innovation. Now the supplier’s sales have doubled, and our competitor took our position as #1 in market share.”