How do you know whether your investment in innovation has been worthwhile? Measuring innovation performance using a handful of carefully chosen measures will help focus and ultimately increase the return on your innovation activities. Some potential innovation measures are shown below. Choose a manageable number that are most relevant for your business and monitor them on a regular (quarterly) basis.
Communicating business performance against measures is a powerful way to engage people in the business. Display performance against key measures in highly visible areas. Use graphics to help people quickly interpret results. Start talking about performance and set goals for the next time frame.
Input measures
- Financial resources committed to innovation
- Human resources committed to innovation
- Operating expenses
- Capital expenditure
Process measures
- Number of ideas generated
- Average time from idea creation to implementation
- Percentage of ideas abandoned at each stage
- Number of suppliers and partners involved
Output measures
- Revenue from products launched in the last three years
- Number of new products or services launched
- Market share growth
- Return on innovation spending
- New product/service success rate
- Number of new customers
- Customer satisfaction
- Cannibalisation of existing product sales by new products
- Brand strength (third party ratings)
