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Innovation Metrics

Metrics to measure improving outcomes from innovation include –

1.  Financial  Metrics

    1. Revenue – from new products or innovation initiatives
    2. Profit – from new products or innovation initiatives
    3. Profit Margin Increase
    4. Corporate Valuation Increase
    5. IRR / Internal Rate of Return (or similar metric)
    6. Earned Value Analysis (or similar metric)
    7. Operational Efficiencies Improvement / Cost Reduction
    8. Savings on Customer Acquisition costs
    9. Meaningful Rewards to those contributing to success from innovation

2.  Operating  Metrics

    1. Progress metrics (ie: stage-gate metrics, projects in pipeline, etc)
    2. Number of ideas generated
    3. Number of projects that were launched
    4. Patent applications applied for or granted
    5. Media references or press mentions (including social)
    6. Hypotheses tested
    7. Learnings / insights generated
    8. Increase in Brand awareness / value
    9. Number of new Customers
    10. Increase in market share
    11. Contribution to growing current market(s)
    12. Successful entry into a new market
    13. Customer touch-points, interactions, etc.
    14. Net Promoter Score   …. NPS – willingness of customers to recommend your brand to others
    15. Employee participation rates (in programs, training, etc)
    16. Concept kill rate (what % of ideas don’t move forward)
    17. Improvement in the rate of POCs being launched as new products / services
    18. Employee surveys about the company’s innovation culture or openness to ideas
    19. Progress in the organization becoming more entrepreneurial and innovative
    20. Improvements in Innovation process effectiveness (speed of innovation pipeline, project launch frequency, etc)
    21. Innovation ecosystem related measures (collaboration, open innovation, public idea challenges)
    22. Ability to attract and retain top talent

3.  Related Metrics –  to make innovation more rewarding 

    1. Discovery / Scouting / Insights / Look Ahead  Improvements
    2. Gains from Open Innovation / Collaboration / Co-Creation
    3. Further ability to attract and retain top talent
    4. R&D Relevance and Effectiveness
    5. Innovation velocity / how fast concepts are evaluated and acted upon
    6. Corporate venture capital investing – number of investments made, outcomes from investments, learnings, benefits from exposure to startups, founder thinking, etc.
    7. Employee engagement in innovation initiatives
    8. Further developing an Innovation / entrepreneurial culture / Mindset
    9. Strategic gains from innovation
    10. Competitive advantage gains from innovation
    11. Progress in the ability to “ Innovate for Impact “

4.  Metrics Reporting –  for innovation mindshare with decision        makers 

    1. Ad hoc / when requested
    2. Weekly or biweekly
    3. Monthly
    4. Quarterly
    5. Twice yearly
    6. Annually
    7. All the time – through a dashboard or other software

Feb 16, 2021                                   CAIL Innovation commentary