Five Dimensions of Strategy

An effective strategy is contextual, creative and cascading, it is also multi-dimensional. A successful strategy needs good communication transmission that will create the sense of ownership. Everybody needs to be involved, at a certain point and at a certain stage of the strategy execution. Here are five dimensions of strategy.

1.    Height

A strategy is not always the oversight from 3000 feet+ above; however, it does take bird- sight view of the businesses in order to craft a good strategy.

The ‘height’ of strategy depends on how clear the business vision is; and a good strategy identifies its contribution to accomplishing to the organization's Vision, helping achieve the organization's end-goal and overall mission. Therefore, work closely as a team to form a clear, concise vision for success, also have team members teach each other behaviors necessary to achieve the vision 

The height of strategy is also related to how ambitious the Strategic Objectives are- it is important that businesses get the best out of the people. And most people get the maximum motivation when the company they work at is very ambitious with their strategy. Often trying to be the best, the most innovative company pushes people out of the comfort zone. Of course, strategy has to be clear and achievable

The higher the strategy is, the more roadblocks are on the way to achieve it. Therefore, identify and clear obstacles, structures, and/or systems, which may impede the vision, allow for risk taking, welcome failures, and share in the learning they provide and remove ambiguity of decision rights, immediately address inconsistencies  

2.    Length 

There are always a right balance of long term strategy and short term business goals, the length of strategy is situational-five year, three year, one year., etc., overall speaking, a good strategy needs to well reflect business’s long term vision, with consistent and incremental business objectives to achieve it.

A good strategy is cascading and elastic: The right length of strategy is long enough to well plan company’s future with confidence, and short enough to sense the urgency to execute it. Strategy should be broken (or breakable) down into a series of tactical steps which further become nests of doable operational tasks. If people can see a direct link between the strategic goals and their everyday work, they can understand both.

Well set the strategy milestones: The big picture (long term strategy) is translated into shorter term details (action/operating plans) and then given life in terms of resource allocations and short term financial goals via the annual budget. As part of the strategic planning process itself, a detailed action plan needs to be prepared which lays out the specific steps needed to accomplish the longer term goals and objectives, establishes timelines, assigns responsibilities, looks at potential obstacles, etc. 

*Break down goals into manageable (and measurable) chunks
*Track and celebrate the early wins, as well as larger milestones
*Use wins for credibility to buy-in the holdouts 

Leverage Incentives to fit the ‘length’ of strategy journey: More often, incentive and other compensation plans are all-too-often short term based and, again, isolated from what the strategic plan is trying to accomplish. This problem will, fortunately, be somewhat mitigated if the strong linkage between strategy and operation. So internal communications strategies must incorporate the need to keep the long-term view within the short-term attention and focus of all key players and to facilitate change within the organization

3.    Breadth 

Strategic plans are often developed in isolation, in terms of who is and isn't involved in the process, what the context is (vision, mission, and values) and what the realities of the current business, market and competitive conditions are. With the new characteristics of businesses such as hyper-connectivity, hyper-digitalization and hyper-competition, the breadth of strategy needs to go beyond silo thinking, and touch the business ecosystem.

The well mixed top-down and bottom-up strategic planning can expand the breadth of strategy. The breadth of strategy is based on well accepted and acknowledged understanding of the organization’s current reality, as well as how broad knowledge the people who make strategy have. Most strategic projects need experts from different departments, preferably the best resources, and fully dedicated.

Strategy Breadth also means how to share the strategy widely cross organization. Statistically, majority (up to 90%) of employees do not know their company’s strategy,

The strategy has to be communicated and shared freely amongst all the organization, from the top executives to the lowest levels. Everybody needs to know what is the goal and, very important, how (by which means, which initiatives) it is going to be achieved. They need to know what are the top three strategic initiatives, etc. 

4.    Depth 

A good strategy is not ‘superficial’, it needs to diagnose the root causes of business issues, make a set of choices and take actions.

In-depth business understanding and comprehensive technological solution is important to translate strategic goals into detailed business goals. Once the strategic plan has been developed, it often remains in isolation from critical business processes and direct linkages are not made to important operating plans, budgets, HR decisions, metrics, etc. Unless there is a direct linkage, resources will be misapplied, priorities will become confused and focus on the long term goals of the strategic plan will be lost. 

From an overall portfolio perspective, there’re nested relationships and close linkage between strategy and tactics
1) The strategic plan drives an organizational project portfolio mix.
2) The desired portfolio mix drives project selection criteria. This creates the linkage from strategy/vision to implementation.
3) Project performance measures (success criteria) for each project are defined in relationship to the business strategy.
4) Performance measures for project team members are linked to the project performance/success criteria.
5) This linkage creates more resource engagement as it should be clearer to people how their work impacts the organization.  

5.    Time 

The fifth dimension of strategy is the realistic time-frames for actual delivery - not just published ones, as well as the right timing to harmonize strategic execution. 

Create a sense of urgency:
*Identify and discuss crises, potential crises, or major opportunities
*Without strong motivation for achieving the goal, strategies will die on the whiteboard
*The stronger the sense of urgency, the easier it will be to gain buy-in for the strategies 

Stay Focus: It is really important to focus on a few initiatives and priorities them. Senior Executives should say no to many of the initiatives and just choose a few where they will put most of the resources (resource, people) of the company. Today companies very often say yes to all the initiatives, with the consequence lack of focus. This is then spread through the organization and people no longer know where the priorities are.

Continuously revisit strategy timely and discussions of strategic plan issues must be ongoing:  Discussions of strategic plan issues must be ongoing and not merely a once-a-year exercise. The ability to revisit and re-enforce what you have put into place at the start of the program consistently before moving on to new phases, just because you think its implemented does not mean it will remain implemented - you may end up working on the roof , whilst your foundation is rotting away. The project delivery needs to be on-value, on-time and on-budget.

Therefore, strategy is not shelf-ware, but share-ware, it’s multi-dimensional, not linear, it fully meets and adheres to the assumptions that bound and guide the organization in achieving its vision and accomplishing its mission 

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What Ingredients to Bake NPS-Net Promoter Score?

Digital business is outside-in, customer-centric. Net Promoter is a management tool that can be used to gauge the loyalty of a firm's customer relationships. It serves as an alternative to traditional customer satisfaction research and claims to be correlated with revenue growth. (Wikipedia). There are relational NPS (based on bi-annual survey) or transactional NPS (based on immediate survey of service)., etc.

It's worth considering including a single diagnostic question with NPS along the lines of, 'What is your single biggest reason for giving this score?', depending on volume of responses and what analytics you have. This can often drive some killer insights and help avoid making assumptions about why people scored well and badly without a full blown equal piece of work. The responses can also really support any campaigns/ marketing communications that you run for customer engagement/retention/etc

Analysis of improvements and using transactional data to drive closed loop and strategic improvements has to be part of the overall program. An aggregated figure won't provide the detail needed to identify which parts of the customer journey need attention or have been revised successfully. It's not all about the number, most of work involves understanding the data that underlies the number, but it's important to get it right as it should provide a benchmark to measure improvement. The relational and transactional NPS scores need to keep separate.

Transactional NPS vs. Relational NPS: All relationships have good days and bad days, and so the immediate surveys for transactional NPS give you a view of what your customers think right now. The bi-annual survey for relational NPS should be used to show the overall NPS and to keep a check on how well you are doing overall. The immediate surveys should be used to check and react to things happening right now - are there process problems, product problems, communication problems. Particularly low scorers should be contacted to discuss their issues to try and turn a detractor in to a promoter. If you get a lot of detractors or neutrals, then you need to look at why and potentially change something or eliminate the cause.

Sometimes there’re significant differences between the transactional and relational scores. The transactional NPS is much higher, because at the conclusion of that event, you most likely solved a specific support problem for the customer, whereas the relational took into consideration a series of events/lifecycle that had more opportunity for both positive/negative experiences and various levels of expectation. Use the bi-annual as the true test of where the company is at and use the transactional surveys for where the company is headed. The transactional surveys hopefully contain a open ended verbatim that allows you to have a better understanding of what the rating means so you can do further analysis and work to improve the areas that are identified so that your bi-annual results improve over time.

Use all of the information, but for different reasons and in different ways. NPS is a piece but not the entire piece and what it gives you is a great place to start. At a data level, match these pieces of critical information against your churn, new sales, up-sells etc and then you really see them come alive. Remember, the data only drives one to a starting point, you would then want to use the data for action possibly even identifying a few customers that you could take a deeper dive with using some contextual design techniques etc. You have the NPS score, coupled with understanding the touch point that drove it and the themes that drove it. The combination of these attributes mapped out over time really helps drive root cause analysis and what needs to be fixed first and across your entire customer base where are your first "moments of truth" that you would start plugging away at.

The NPS focus should not be the all and end all. Whilst NPS is a straightforward metric that holds companies and employees accountable on how they treat customers, a blending of a range of research will give you more customer understanding and the insight to drive the right actions and accountability in the organization, which should already be driven from the top by a CX executive who provides the right level of business sponsorship. You should also consider trying to collect Customer Effort Score and Customer Satisfaction Score and blending that with NPS, as that gives you a well rounded view of your customers' opinion.

 What you measure depends on a few things - the time at which you are capturing feedback in the customer lifecycle, the trigger/basis you use for feedback and your goal.
While NPS is an important measure, it is better used as a lagging indicator of the overall customer relationship across time. As such you should be using randomly (not just 2x a year) distributed surveys with a statistically valid sample size to assess the overall relationship and brand perception. This is a good overall view of how customers see you in the market and closest to loyalty (likelihood to refer). Also, be cautious of using NPS as a single measure. If your purpose is to build loyalty for your company/brand, you need to dig a little further to find out what areas your customers would recommend you over the competition and where they would not. 

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Cognitive Mind vs. Big Data

The cognitive difference is deeper level of diversity, and key consideration in any team building.

“Cognition" is a word that dates back to the 15th century when it meant "thinking and awareness. Now, at the age of information abundance & explosion, cognitive human mind is competing with machine intelligence, but what’re the differences between cognitive process and Big Data analytics?

Cognition is a group of mental processes that includes the attention of working memory, producing and comprehending language, learning, reasoning, problem solving and decision making. The cognitive process is the personal ability to acquire and produce knowledge (decoding signs and meanings), taking actions (attitudes), making choices, inferences and deductions, allowing the full functioning ‘engine’ of the executive brain – Cortex at the skull fore front region – masterminding plans, executing and performing them, recognizing all social codes, discovering patterns and connecting the dots.

Cognition is a faculty for the processing of information, applying knowledge, and changing preferences. Cognition, or cognitive processes, can be natural or artificial, conscious or unconscious. It includes functions such as:

* Perception/Acquisition process (through the body senses)
* Memory
* Language
* Thinking - Thought
* Concentration / Attention /Focus
* Intuition
* Understanding

Human brain (of adults) are a result of the continuous learning till date from the time of birth (Probably pre-birth too). The way of thinking, character, reasoning, attitude are all a result of what the brain has stored as information, some from genes, some from continuous learning with the surroundings, some from own rational thinking. 

The brain works doing correlations, categorizing, classifying and sorting – multi dimensional multimedia correlations where multimedia stands for all kind of memory records. In deep, there are enough reasons, to lead to each and every decision that we take with each and every seemingly simple tasks. Like having an affinity to 'particular color', it is brain derived based on past learning / exposure. And our brain associates everything that we interact with to an already available entry in the large repository and decides based on that.

Big Brain vs. Big Data: One of the big differences is that human brain naturally "filters out" what it thinks is irrelevant information. We are continuously bombarded by an immense amount of information and without some sort of filtering process we would go mad. This process is often referred to as selective deletion. It is thought that the information enters the brain but does not remain. It is not moved into our memory but deleted like it never existed. This is not necessarily the case with Big Data. Typically everything is recorded, facts, noise and all. Whereas big data looks at everything in order to make some sense from it. However even as well-developed as our brains are, they will miss important information buried in big data 

Human’s brain is both intuitive and analytical, while almost every outcome/decision of big data processes is traceable and rationalized, the workings of human decisions are not so rational... with the interplay of the conscious knowledge and the exponentially larger sub-conscious knowledge, the decision making process of the brain is the most fascinating studies of all time... big data can definitely predict, help improve and simulate brain processes for need based, large value and long-relationship purchases..

Human brains do resemble big data at work at certain degree. The evidence can be seen in fMRI (Functional magnetic resonance imaging or functional MRI brain scans (fMRI) is a functional neuroimaging procedure using MRI technology that measures brain activity by detecting associated changes in blood flow) made while people are making decisions. All the areas of the brain that light up during such decisions are reflections of brain algorithms doing real-time processing of the variables we consider correlated with the information we have in our memory (databases) and to our sensors (senses).

Big Data analytics can complement human brains to make better decision. - Not all of the decisions human make are conscious or rational decisions, cognition can be unconscious or sub-conscious as well. It turns out that people often make decisions well before they are aware they've even made them. Further, they often make decisions based on neurobiological pathways/triggers that most people aren't even aware are driving a good part of human behavior. Even though people like to think they use objective information and explicit criteria for decisions, in almost all cases they find out later there were unrecognized issues, hidden criteria and just estimates of the future, not objective facts. But, they made rational decisions based on what they knew and the beliefs they held at the time. So Big Data aims to enhance human abilities to use more information without the limitations the brain can have, and it uses explicit criteria with an ability to calculate patterns from infrequent data that our brains may have missed. So it can aid in decision-making, but it can also have some foibles of its own for which the human brain is able to compensate.

Thereafter, Big Brain with cognitive difference and Big Data can complement with each other to shape higher level intelligence.

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Breakthrough Innovation vs. Incremental Innovation

From Breakthrough to Incremental, Innovation is a continuous journey.

There are two types of Innovations: (a) Radical which may be classified as Breakthrough or Disruptive, and (b) Evolutionary which has two components - Incremental and Spiral. Breakthrough Innovation and Incremental Innovation are not separated items, but it's rather a continuous flow that it goes from innovations that break a market or create a new one to the simplest continuous improvement.

Breakthrough Innovation is better with greater ROI but with much greater risk, Incremental can be as rewarding as the initial Breakthrough, especially if the incremental is based on a breakthrough technology you increase and create value. Research identifies that projects that ultimately break new ground frequently are fraught with uncertainty on many dimensions: technical, market, resource and organizational uncertainties abound. This requires them to be managed with a whole different approach: processes that are fine tuned to deal with uncertainty but not stomp it out immediately: metrics that take uncertainty into account; team members that thrive in conditions of ambiguity, and a culture that is dramatically different from the operational excellence orientation that dominates incremental innovation.

Breakthrough Innovation is disruptive and will change your organization in many fields. You need new technology, new processes, new costumers, new Knowledge maybe a new business model. All that makes them very risky but on the other hand you will get very great chances and opportunities for new product lines, platforms etc They will need them in strategic long range view. There are cases where incremental innovation has resulted in breakthrough impacts. Perhaps the terms should be used in the context of the desired outcomes rather than as process descriptions or technological developments. Breakthrough implies an a distinction in innovative solution at any type of innovation

Breakthrough Innovation is ‘new to world’ or is it ‘anything new to businesses’ or purists want to call it as ‘new to world’; something that no one else has done before; really original. Incremental innovations fit into your core competencies and your core business. They are enablers to run your current business in a better way. 

Breakthrough innovation might be thought of as an initial innovation in an area, possibly the one that shows that innovation is possible or gives a new route. Perhaps it is a major discovery regarding the area. It is generally not so predictable and may require a lot of luck, or advanced knowledge in one or more areas to accomplish. Evolutionary innovations can be either incremental or spiral. In incremental development, the end-state requirement is known, and the requirement will be met over time in several increments. Incremental innovation is also triggered and limited by the past (or something that already exists). On the other hand, breakthrough innovation is in the future with no necessary continuity with the past.

Breakthrough innovation differs from incremental innovation in number of ways. First is the incremental innovation always start with a small objective/aim to achieve and breakthrough innovation starts with a problem, having no solution in current situation .You know what do you want but do not know how. Second, incremental innovation generally brings short term value additions or competitive advantage. Breakthrough innovation differs from incremental innovation to be a "game changer". Third, breakthrough innovation is most of the time bottom up process and incremental is top down.

Breakthrough Innovation is a radical new approach that leaves competition behind in some way. It's out of the box thinking where incremental innovation is still inside the box thinking. Incremental innovation is what is used after the breakthrough to "touch" things up a bit. It is much more predictable, often the result of optimization efforts on the product or process.

Differentiation between incremental and breakthrough innovation relates to the degree to which a particular innovation changes the competitive landscape, potentially making entire industries obsolete, as digital photography did to the film industry. Innovation involves many steps: The generation of an idea, the demonstration of its feasibility, its implementation, its commercialization, and its diffusion. Those who study innovation find it helpful to differentiate between these stages. In some cases an incremental innovation in one area may be hailed as a breakthrough in another area. 

Innovation is the successful implementation/adoption of creativity/invention.
Incremental Innovation is Evolution (improvement or change to something that already exists). Breakthrough Innovation is Revolution (Something new that disrupts or replaces something else).  Breakthroughs have four key components. A breakthrough: 

1) Takes Advantage of Emerging Trends. 2) Provides for Basic Human Needs. 3) Uses Simple Business Models. 4) Build Barriers to Entry - by combining different choices about target markets, offerings, channels, and partnerships, breakthroughs are not easily.

Businesses need to have a balanced portfolio of innovation projects, across the matrix of three types of innovation (process, product/service, business model) and three degrees of innovation (incremental, substantial, breakthrough). Managing this portfolio should be integrated with the annual strategic planning process and financial investment model. The size and mix of the innovation project portfolio depends upon the business situation, strategic objectives and severity of external challenges/changes. Generally, all businesses should have a handful of "bets" in the breakthrough category. What's important when developing the mix is to make sure:
1) You're accepting risk for potential reward.
2) You aren't ignoring specific types of innovation
3) Innovation is benefiting the widest possible audience within your organization
3) You aren't sacrificing the long term viability of the portfolio for short term rewards

Breakthrough innovation is the new s-curve, which mostly requires new technology. For incremental innovation, it is the improvement of existing technology. Incremental innovation will be useless if the breakthrough innovation become the disruptive innovation. Breakthrough innovations, the radical changes, require cross-functional senior leadership commitment most of the time. Projects cross budget boundaries in the corporation and can often interfere with pre-determined individual targets. These types of changes require a more thorough process to prototype, filter, test in a real world scenario, and ultimately add to our existing 'new demand' project processes. 

Once the innovation has progressed past a certain level of risk and uncertainty, it's gradually mainstreamed into the normal project pipeline. This may mean that it breaks into multiple projects owned and funded by different groups with the Innovation team providing Program management and oversight. But it ultimately becomes "just another project". Then track the ROI for reporting and keep the fingers in

New Users + New Product/Service = Breakthrough/Disruptive innovation
Existing Users + New Product/Service = Evolutionary Innovation
New Users + Existing Product/Service = Product Extension
Existing User + Existing Product/Service = Product Improvement

To put it another way, breakthrough innovation changes how things are being created, and incremental improvements reinforce it. It’s a continuous life cycle to manage innovation and achieve its full business values.

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A Decisive Board

A Decisive Board is Cogitative, Proactive and Supportive.

Corporate Boards are there to oversee business strategy, ensure reasonable governance, and hold the senior executive team accountable to execution. However,  in doing so, it is unreasonable to assume board members will always agree on subjects; diverse thoughts and opinions are critical in effective governance; on the other side, when boards make collective decisions, all board members are expected to support them, that said, there are many tough decisions boards need to make, but how to build a decisive and differentiated Board?

Do ‘homework’ before sitting at the big table. Normally, one sends information regarding a board decision prior to the meeting. Given "solicitations" prior to the board meeting, it could be debatable weather boards fail in their job if there is a split decision at the board meeting instead of a unanimous decision. The key point is to well prepare crucial issues and collect feedbacks even before the meeting start, and better to invest the time up front to address concerns and achieve a workable agreement from the outset.

Board Room “Acid Test”: “Will the dissenting members actively support the group decision?”. If everyone thinks the same, you do not need board governance. Having different views and opinions does not mean lack of teamwork. It is how the differences are conducted that is the real test of the board.. As a board member, you have to be assured and assure that the best idea always wins, and believe “from spirited and strategic debates come to reach cogitative and wise decisions".

Board membership requires careful stewardship, thought, and deliberation. Individual Board members will express their concerns, questions, issues, or disagreements early in the process. Those individual concerns should be addressed and accommodated by the Board. Most Board decisions are not so "bi-nary" as to demand a yes/no up/down decision, but rather an airing of the issues and adjusting the terms to meet objections. One can disagree with fellow Board members, but have always support the decisions of the majority.

In an ideal Board world, the culture should be to listen, consider, adjust, listen some more before acting. If a decision is too complex, if a clear outcome is uncertain, try not to be the winner of close votes on important issues. You will conceivably spend much time, energy and focus wrangling the dissenters as the process unfolds. But try to make harder right decision, without too much regrets for the long term.

Independent thinking is important, or to dissent on votes spur discussions on the topic at hand, and get more Board members to actively participate. However, there are studies that show independence of thought declines with length of tenure, as most of board members are motivated to go along in order to maintain peer relationships. The key for a decisive board is to ensure all decisions are justified intellectually and emotionally. 

Decision style is part of Board culture, a truly decisive board is democratic, cogitative, and proactive, bring different opinions and viewpoints, but with the capability to make collective and wise decisions that get supported by all..

Read more about the Digital Theme of Modern 'Boardship'

A Decisive Board

A Strategic Board

A Competitive Board

An Effective Board

A Fitting Board

A Tech-Savvy Board

A High Performing Board

An Innovative Board

A Learning Board

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UX as Part of Strategy

User Experience Design needs to Touch Customers' Mind and Heart.

Compared to traditional companies in industrial era,  digital organizations are outside-in and customer-centric, compared to traditional strategy, digital strategy needs to add more special ingredients. While strategic design differentiates one company’s products/services from competition and increases competitive uniqueness significantly, so, should UX-‘User Experience’ be part of strategy?

UX should be part of every aspect of business. If UX is not part of the strategic effort, then the chance of success diminishes dramatically. Delivering great experiences starts with research and strategic insights, with the findings and ideas flowing through conception, design, development, production and quality assurance.Without the strategic insight that UX offers, the best you can hope for is to design the wrong thing.

UX is all about putting design-led thinking into strategy. Think about how important is contextual research and prototyping in helping think strategically. So the question is irrelevant when you deeply understand what you are catering to the boardroom. If UX teams have been put inside the functional silos only, it will disassemble design approach, weakening UX effectiveness, both at the strategic and creative levels.

Despite how UX team is structured in real life, the best practice is to have it connected to a strategy/business unit. It can directly belong to that unit or at least have a dotted line there. For some, UX is closer to commerce and strategy in the process, in others it is closer to creative design. It’s all about board level buy-in. Where can your UX activities gain the most support and ultimate revenues? It is important to remember that UX is practiced in many different guises and that fitness for function is ultimately important. 

UX is a disruptive force in business culture, and is at odds with traditional industry model of organization, that breaks projects into stages in a production pipeline. In digital organizations, more cross-disciplinary teams work with Agile methodologies to develop a product or service over its lifespan. In that model, UX would play an equally important role throughout the life of the project.

UX needs to be well aligned with the business side of things. Though depending on the business model, UX belongs to different teams and has varying degrees of the strategic impact, it needs to have well alignment with business, because it provides more opportunity for moving up the pipeline and influencing strategy and direction. The strategic design effectiveness can be improved through a collaborative effort to improve processes and provide visibility across the teams

UX Talent is versatile and comfortable to work cross-functionally. UXers should have a fundamental understanding of user experience and have a fundamental grasp of design principles. This means as UX professionals, either need to exist and practice within the multiple business areas, or be centralized (internally or externally) and able to interface with those business areas on an equal footing, as well as to make UX strategically relevant cross company.

Therefore, UX needs to be one of the unique ingredients in strategy in order for businesses to transform into a customer-experience driven digital organization, UX teams need to work collaboratively with the strategy team, and design thinking  needs to be well embedded into business culture, key business processes, and all business perspectives as well.

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Do KPIs Kill Innovation

Key Performance Indicators (KPIs) are part of an effective bridge between the desired business objectives and execution of strategies. Good KPIs make management more as science than art, however, due to the ‘creative’ nature of innovation, do KPIs kill innovation?

Companies need to spend a lot more time distinguishing the "performance" of execution and the "objective" of innovation, before they try to fuse them into "the performance of innovation". Innovation KPIs can become a problem if they are poorly developed. The main outcome of adopting KPI from an innovation perspective is to improve the quality of knowledge and learn faster from mistakes. KPIs in such perspectives can be seen as representation of what the innovation actually is (or does) for business: a kind of scale model or framework. The dangerous part of this discourse is the attractiveness of the "dark side" metrics and performance systems: they tell you what you want to be told. Innovation instead tells you things differently.

Performance indicators should focus on both business objectives and desired behaviors. Further, before performance indicators are designed, the necessary and complete set of desired behaviors should be clearly established. If performance measures are to have the required impact, all of these behaviors should be assessed effectively. Otherwise, the behaviors that remain invisible will be sacrificed to raise scores on others that are being closely watched. A "good" KPI is judged both by its connection (even loosely or qualitatively) to the business objectives and by the behaviors it reinforces (or in some cases, discourages). But the even better KPIs are the ones that have been developed to positively reinforce desired behaviors.

The problem does not reside in the KPIs, but in the lack of wisdom on its crafting or use. Inappropriate KPIs do kill innovation. Particularly when traditional, operational excellence based corporate KPIs are applied to innovation efforts too early. The appropriate innovation management KPIs are more activity and directionally oriented. However, as KPIs have been used for many executives as a tool to foster results through linking “indicators” to reward and recognition systems, managers became trapped into the paradigm that a simple “indicator” should be the measurement of success for the lack of a better tool in terms of management. 

KPIs are the best tools available for innovation managers that wish to promote continuous innovation within any organization. If innovation managers are not prepared yet to understand the difference between fostering creativity and rewarding end-results, that is another issue to be dealt with. The fact is traditional management focuses on the performances achieved upon the tangible assets; it ignores in its reporting and rewarding system for the intangible assets & resources (that include talents, alertness, vision, innovation capabilities, etc.), it means that they miss out the main drivers of out-performances. Reward systems that target on results are excellent for “on going” operations where execution is the main goal. When managing innovation, reward and recognition systems that aim at promoting engagement and creativity are more important. Therefore, KPIs must be applied here too, not solely on execution. For instance, you have to change the rigid way that rewarding and recognizing through KPIs in terms of management, and pursue a more advanced performance system in “the new innovation era”.

KPIs are critical to the test-and-learn process. The starting point is to define what you want to measure to improve the process.They focus thinking, effort and resource allocation. What's important is for the business to acknowledge that new KPIs, germane to the initiative, may need to be established and that these may fall outside current cultural norms and scorecard comfort zones. Likewise, for the process to be meaningful, it's vital that one is actually measuring and reporting KPIs, as opposed to just metrics. Pay more attention to dark side of KPIs, which discourages you to make mistakes. To quote Tagore " Where the mind is without fear and head is held high for the river of reasoning to flow..........."

Therefore, if a KPI may kill innovation, it simply means that this is not a good KPI for innovation effort, it takes wisdom and practices to craft the right set of KPIs in order to stimulate advancement and manage innovation project more systematically.

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