BQF Innovation

I have just read an interesting report by the National Audit Office entitled, Achieving Innovation in Central Government Organisations. It was prepared by the public policy group at the London School of Ecomonics for the NAO. It draws on evidence from 125 specific innovation cases in the public sector to asses government poductivity and effectiveness at innovation.

Among the findings are ‘There is scope for government to take a more systematic approach to developing innovations by communicating more simply to staff what kinds of innovations are helpful, encouraging counter-cultural thinking and methods for finding innovative solutions, and ensuring that approval and piloting processes are not over-protracted. Departments can learn lessons from the private sector in developing more regular and serial innovations.’

One problem is that the innovation process in central government is top-down with few contributions from lower-level staff. There is also a reluctance to embrace new ways of working and fragmentation between agencies.

There is innovation in the public sector but it takes a long time to get implemented. There is plenty of advice in the report on how to improve things and there are many examples of successful innovations. Here is one that caught my eye:

The Home Office introduced an Automatic Number Plate Recognition (ANPR) system, allowing number plates to be captured on digital cameras and cross-checked with wanted or suspect vehicle databases. A pilot project began in 2003. Officers using ANPR technology have achieved arrest rates nine times the national average.

Full Report is here

Paul Sloane

Most organisations recognise that innovation is critical for survival and success but very few know how to set goals or metrics for innovation. The most common target used is the percentage of revenues derived from new products. This is useful but it is a backward looking measure. It calibrates the success or failure of previous efforts to launch new products. We also need forward-looking metrics that show how well we are doing in filling the pipeline for future revenues.

A recent report by the Boston Consulting Group explores these issues and surveys what leading companies are doing in the area of innovation metrics. The report is here:

BCG Report

They recommend that you need to align your innovation metrics with your strategic goals - but what would you expect consultants to say? More usefully they advise that you set metrics in three separate areas:

1. Innovation Inputs - measures can include financial resources, people, the number of ideas generated and expected revenues.

2. Innovation Processes - measures can include cycle times to track how long it takes to turn ideas into offerings and the number of ideas that move from one stage to the next.

3. Innovation outputs - metrics include number of new products launched, revenue and profits from new products, ROI on the innovation portfolio.

They found that most companies used only five or fewer metrics but they recommend that you should use 8 to 12.

I would echo their finding that the potential for companies to improve their metrics and hence their innovation performance is sizable.

Paul Sloane