Developing an Innovation Index metric

Can we design a precise Innovation Index metric? Can we design an Innovation Index that is both valid and actionable? Can we measure and develop innovation as we do leadership, employee surveys and strategy?

These are some of the questions the team at Engage // Innovate are currently working on. We firmly believe engaging leadership and innovation will be crucial areas for organizations in the future. But just like strategy in the late 1960’s and the quality movement in the 1980’s, we still don’t have the right tools for it. But we are getting there.

Building on the research and methodology* from one of our previous consulting firms (KMC), we have developed these ideas several steps further.

1) Leaders are role models
In today’s and tomorrow’s organizations, leaders need to be role models. Period. Leading by example is the only way to lead. Leading by example is a pre-requisite for employee engagement. And employee engagement is a pre-requisite for building innovation capabilities in firms.

But that’s the easy part. We know how to measure, manage and train leaders who want to lead by example. It can be tough. It can be challenging. But we have the tools, metrics and training programs for it.

2) An Innovation Index metric
Developing an Innovation Index metric, the first question is: Purpose; what is the goal of the metric? What do you and your team hope to achieve as a consequence of using this?

For an academic, the goal is publication. This, of course, requires advanced methodology to the highest academic standards.

For most practitioners (but not all), the goal should be action. The goal should be more innovation. Better innovation. A change in attitudes and behaviors among employees, leading to more innovation and better business results. These goals do not conflict with academic goals, but it does require major differences in questions, communication and process.

Project managers need to make their choice and be clear about what their end goals are.

Much exist
Current literature on innovation contains ranges of innovation metrics. But compared to metrics in sales, marketing, leadership, employee and strategy, the field of innovation metrics is still in its infancy. In the book, “The Innovator’s Guide to Growth”, the authors do a good job of outlining the current practices. Anthony, et.al. suggest a mix of metrics across three categories:
– Input-related
– Process and oversight-related
– Output-related

Strategos author Peter Skarzynski and Rowan Gibson follow the same structure in “Innovation to the core”, suggesting a ‘comprehensive matrix of metrics’. Using Whirlpool as an example, the authors underline the need for companies to find their own metrics to match their strategic fit.

Too much of a good thing…
But for most companies, this is too advanced. Most firms need a basic starting point to build on. So, we ask, “Can we develop an easy-to-use, common, actionable Innovation Index that helps companies get started on innovation?”

Inspired by previous successes, we are now working to develop just this. A few, basic metrics to develop an Innovation Index; then focus on implementing this in the organizational DNA and train leaders in how to master it. We believe an Innovation Index can be a strategic tool for firms in years to come.

But first it needs to be fully developed.

Today our early draft is shaping up with a strong focus on what Anthony, et.al, call “Management and People-input measures”. These are metrics looking at attention, training and focus on innovation in the organization.
More than measuring output, i.e. # new products and services launched in the last three year, these metrics look at how and how much the organization works on innovation. We believe these “Management and People-input measures” should be the starting point for companies developing their own innovation strategy.

The Innovation Index

We label this draft version 0.2. It’s an early draft. But rapidly evolving. During the fall of 2011, we will test, refine and explore it in collaboration with innovative teams and organizations.

If you are curious to join, learn more or simply stay in touch, feel free to contact us. We are actively looking for more adventurous managers to test the Innovation Index in their teams. Do you want to improve innovation in your team?

*See the books “BusinessIQ – måling og utvikling av kunnskapsbedriften”(2004) and “BusinessEQ – Verktøy for å utvikle engasjerende ledere”(2006).