Friday, May 2, 2008

Innovation Metrics

The Freakonomics Blog recently posted an interesting article on measuring innovation.

A panel of Ashish Arora, John Seely Brown, Seth Godin, Bill Hildebolt, Daphne Kwon, and Mark Turrell were consulted for their insights. Insights from the panel included:
  • Develop process metrics as well as outcome metrics - but treat them carefully over time, as the frame of reference for innovation is constantly evolving
  • Maintain an appropriate portfolio of incremental innovation, architectural innovation and disruptive innovation
  • Measure additional profit in relation to the investment on innovation
  • Measure the number and value of patents held
  • Take enough risk and push enough boundaries, measured by the rate of failure, whether failures are "along the right path", and the source (e.g. organisational levels, divisions, etc) of the failures within the organisation
  • Strictly define what counts as an innovation, and measure on an ongoing basis expected benefits, realized benefits, and an appropriate set of process and stakeholder engagement metrics.

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