The Organizational Innovation Scorecard

Organizations should assess the overall innovation capability and capacity of the company, as well as their innovation performance.

The purpose of Innovation Management is to prepare everything to maximize the transformation of an idea to achieve its commercial value. Besides spotting individual innovators, organizations should also assess the overall innovation capability and capacity of the company, as well as their innovation performance. They can define some important factors to measure innovation score within a company and develop a comprehensive organizational innovation scorecard with the following characteristics.


Resources invested (human and financial): The essence of innovation management is about how to manage people, assets, and resources to meet the business goals for innovation. Without well-defined business goals, you won’t have an effective plan and be able to manage a strategic innovation value chain. From an innovation leadership perspective, to keep innovation alive in the company, it’s essential for the entire company to be pulling in the right direction and ensure your company has a steady flow of fresh ideas in the innovation pipeline. It’s also important to take the calculated risk and make a wise investment to ensure that enough resources are available and is assigned scientifically. The good resource allocation scenario helps organizations take advantage of resources effectively which optimizing cost, manage a well-managed innovation portfolio, and create the long term strategic business competency for the company.

Employees motivation and collective creativity: Innovation happens at the intersection point of people and technology. The innovation capability of the business is built through the alignment of people, process, and technology. It also depends on how well employees are motivated, the level of customer interaction, as well as how effective the innovation leadership and management are, such as top management encouragement and support, challenging activities being involved, or the level of autonomy given. To amplify collective creativity, it’s best to bring a group of people together with the cognitive difference such as different backgrounds, capabilities, strengths, etc, together in order to encourage divergent thinking and stimulate creativity. Highly innovative organizations treat customers, channel partners, suppliers, and industry ecosystem participants as active digital agents to brainstorm fresh ideas and create new experiences.

Innovation portfolio management success rate: Innovation is a management process and business competency. The innovation performance depends on the quality of the ideas entering it and the organizational mechanics that evaluate and implement the ideas. The innovation performance indicators such as the number of projects/initiatives being launched, and organizational culture (mission, vision, structure, networking collaboration with partners), etc, are the best tools available for innovation managers that wish to promote continuous innovation within an organization. A well-defined standard set of innovation performance metrics would need to be considered in better measures of innovation success such as revenue sustainability, customer satisfaction, knowledge accumulation, brand reputation or price elasticity, etc.

Culture maturity: Innovation comes with a risk of failure, usually not well tolerated in a market governed by risk-allergic mindset. Thus, culture assessment needs to be an important component of an innovation scorecard. Innovation and risk often go hand-in-hand. Innovation fails because there are too many disconnects that occur between the birth of an innovative concept and the process of turning it into a reality. The assessment of culture maturity should include such as the people’s willingness to accept the risk of failures, the workplace setting enabling cross-functional communication and collaboration, the rewarding system to encourage creativity, trust, transparency, etc. The type of assessment of culture maturity is through the innovation drivers, the elements that enhance an organization's innovation capacity. For measuring such, there must be an appreciation for the organization of the sources of creativity as well as the management that will promote innovation.

Industry influences: Breakthrough innovation brings something new to the industry- something that couldn't have been possible before. The differentiation between incremental and breakthrough innovation relates to the degree to which a particular innovation changes the competitive landscape. Usually, breakthrough innovation involves both high impact and high risk, not something everyone can accomplish. You have to systematically develop the capability to execute it successfully, and that is something you do not accomplish overnight. Thus, those few organizations that are good at managing breakthrough innovation as a game-changing by capturing the rising trends and taking advantage of changes in the external environment can make a significant influence in the industry or even cross the industry, and lift the organizational reputation as an emerging innovation leader.

Digital innovation expands both horizontally and vertically. It’s the business’s unique capability to gain a competitive advantage in the face of fierce competition and business dynamic. It’s important to build an effective innovation management scoreboard and define the right set of performance indicators for evaluating overall innovation management health and improving innovation management maturity.

Posted in: Innovation,KPIs