Success Metrics for Corporate Innovation Programs and Teams
I was asked to partake in a discussion with a newly formed innovation team at an ASX20 company recently. What started out as an informal discussion quickly had me on my feet, white-boarding away and firing on all cognitive cylinders as I talked, or drew my way, through the different things large bureaucratic organisations need to consider when it comes to the big hairy audacious mission of creating an environment that truly supports disruptive innovation.
After babbling on for a little while, it was question time and one question in particular prompted me to write this post - “if you come back here in a year how will you determine whether or not we’ve been successful?”
First, I’d paraphrase Bill Gates and say that we overestimate what we can do in one year and underestimate what we can do in say, three years.
Second, it’s important to define the objectives - for the purposes of this blog post, let’s assume the innovation team’s responsibility is to create an environment that supports the exploration of adjacent and disruptive innovation. Fore more on what these terms mean refer to this blog post.
I’ve written extensively about innovation metrics pertaining to early stage product development but not the innovation, or success metrics rather, that help to evaluate whether an innovation programme or team has moved the needle on innovation.
If our objective is to create an environment that supports intrapreneurship, then we would expect that people would exhibit more of what Clayton Christensen refers to as the innovator’s DNA - that is, one who embraces experimentation, networking, questioning, observing, challenging the status quo and taking smart risks. The purpose of creating this environment of course is ultimately to generate and more importantly, execute, on ideas that create new revenue and in today’s day of rapid technological disruption and increased market uncertainty, help keep an organisation afloat.
So what kind of metrics might you use to assess the progress of a team?
I’ve prepared the following list which is by no means exhaustive but is designed to get you thinking about this from the context of your organisation’s objectives. Can you think of any others? Please, add them to the comments!
And before you dive in, it’s critical to measure our performance against the previous period. So if we’re looking at a three year period, what did the preceding three year period look like? We need to be comparing like for like and omitting external factors that might distort the numbers as best we can.
Remember, when it comes to disruptive innovation it’s about moving away from a culture of taking few large bets slowly to one that takes lots of small bets quickly.
The lower, the better - oftentimes we can test the problem and solution without even having to build something and that constitutes an experiment. Failed early? Great, that’s a huge improvement on failing big and late which is far too often the case.
You might also call this the average time to market validation.
If you’re going to fail then it’s crucial to share those learnings with the organisation in order to decrease the likelihood of that failure being repeated and share insights that may lend themselves to new ideas and opportunities - ultimately, you want to increase your return on failure by sharing your learnings.
Click here for more on this metric.
What volume and percentage of new revenue is attributable to new products? How did this compare with the previous period?
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The WorkFlow podcast is hosted by Steve Glaveski with a mission to help you unlock your potential to do more great work in far less time, whether you're working as part of a team or flying solo, and to set you up for a richer life.
To help you avoid stepping into these all too common pitfalls, we’ve reflected on our five years as an organization working on corporate innovation programs across the globe, and have prepared 100 DOs and DON’Ts.
