Let’s return to a topic we have discussed before – How do you measure the return on innovation?
Here is an interesting article by Chris Pentilla.
‘Eight months ago, employees at Handango had tons of concepts and plans but only few completed projects. “Very little was actually getting out to the consumer,” says Bill Stone, 40, CEO of the 9-year-old Irving, Texas, company that provides content for wireless devices. “We suffered from too many ideas.” Welcome to 21st century innovation, where companies aren’t lacking for ideas but are having trouble turning these ideas into profits.’
‘Stone has come to rely on two metrics: First, he looks at Handango’s return on investment for future product development. Second, he compares the company’s “business as usual” scenario to the potential revenue from new projects. Ideas that make it past the brainstorming and prototyping stages are managed to meet small milestones that keep everyone motivated and deliverables on track. “What I see in the innovation process is that people lose interest in the execution,” says Stone, who projects sales of more than $1 million this year. “You have to have milestones and celebrate them.”
Measuring decision-making speed, how much time employees spend on innovation and the time it takes to reach project checkpoints can be easy ways for small firms to see how they’re doing. Trying too hard to measure everything, however, gets in the way of innovation. “If you have 20 innovation metrics, you have none; nobody is actively tracking 20 things in their brain,” says Tom Kelley, general manager of industrial design and human factors firm Ideo and co-author of The Art of Innovation. “You want the kinds of things that everybody in the company can hold in their brain when they show up for work in the morning.” BCG’s surveys have found that most companies follow no more than five innovation metrics.’
Paul Sloane
