Friday, October 21, 2016

Innovation Management Assessment and Measurement

Innovation management assessment and measurement is both art and science.

For many businesses, creativity is the mystery and innovation is a serendipity. In fact, innovation is how to transform novel ideas and achieve its business value. Due to the hyper-complexity of modern businesses, innovation is also about reducing the unnecessary business complexity to tackle the complexities of business dynamic. It can be managed in a structural way. If you can only manage what you measure, how to measure innovation effectively?  

Setting guidelines for developing a customized suite of innovation metrics: Metrics provides feedback. Metrics is part of transparent visual management allowing pulling. However, poor-defined metrics can mislead, create the other layer of complications, cause confusion or suck the energy. Normally organizations look for KPIs measuring business results generated by innovation efforts. You choose the KPIs by deciding which are seen as critical to making progress in order to deliver more innovations. There is no best innovation practice solution which fits all cases. Select a few (3-5) KPIs, to keep the measures simple and understandable. The innovation metrics in the context of business impact include such as, % of revenue from new products/services introduced. You could also change the variables and create something like % of the profit from new ideas implemented. But it takes quite some time for a new innovation drive to produce those measures. One of the solutions is to define process KPIs, which demonstrate the growing capability of the organization to deliver more innovation with business impact in the future.

Evaluate idea management and innovation platforms/tools: The appropriately configured innovation platform creates a scalable means for sharing and building ideas throughout the enterprise. As a result, innovation becomes a persistent, shared reality, even across silos and geographies. A well-considered tool/platform for innovation, in the given culture, operating environment, and governance, which can be part of innovation management planning and implementation, could strengthen the innovation effort and success rate to the organization. An effective idea management platform/tools can be assessed through:
(1) Simplicity of use (friendly tool, accessibility from any devices...)
(2) Flexibility to manage different discussions and votes
(3) Link with usual company IT systems used by employees
(4) Social and collaborative systems & tools to encourage discussions
(5) Transparency in follow-up a system of innovation process from the idea up to implementation!

Innovation Process Effectiveness can be assessed via a set of inquiries:
(1) How will it increase speed in the innovation process
(2) How will it decrease risk in the innovation process
(3) How will it effectively leverage diversity to create meaningfully unique ideas
(4) How will it effectively use the power of stimulus to create meaningfully unique ideas
(5) How will it help to reduce fear in the organization?

The overall organizational maturity assessment: Innovation is one of the crucial digital capabilities which underpinned by varying business elements. Innovation Management System includes policies, structure, and program that innovation managers can use to drive innovation. Remove any of the three, you're liable to fail. A defined structure is essential to managing innovation in a corporation, but there's no single structure that will work in every organization. It depends on the level of organizational maturity. Trying to apply overly rigid structure applies limits to unleash full innovation potential. If the structure is meant in a methodological sense, then the structure is needed. Money facilitates innovation, but not guarantee the result. Statistically, innovation success ratio is not always proportional to the money the business invests in. For example, ideas are crucial to an innovation program, the money will increase the willingness of employees to contribute the ideas or improve innovation management system. It doesn't mean though that it will increase the volume of ideas that are available to be collected. You need to make sure, that your company has a steady flow of fresh ideas floating in your innovation pipeline, and you need a methodological platform that allows you to do that in an efficient way. From innovation process management perspective, the process to support the creation of sustainable, systematic innovation can be structured, but innovation per se is like composing a symphony, a lot of planning, but the music will come from the musicians, not the conductor.

Innovation management assessment and measurement is both art and science.The perception will come from the usage you're doing with metrics: Assuming an organization believes that metrics can lead to continuous improvement and improve innovation effectiveness, it won’t be just a matter of explicit communicating the intention behind metrics, but a matter of coaching and leadership to guide the team via understanding the purpose of doing that and engaging on that, with the goal to build innovation capacity, not about adding the new layer of complicated processes and causing more confusions or problems as side effect.


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