The metrics you choose to measure innovation might be the very thing that kills it.
The most obvious indicators could potentially be the executioners of efforts that might not be turning into immediate and tangible ROI, or time-to-market equal to more proven developments.
Reporting to the board what really matters isn’t optional, it is fundamental to keep the ball rolling.
Building and maintaining an innovation culture, is like building and maintaining muscles: food, training and motivation are required. The only way to make this sustainable, is following the right methodology, and measuring what matters.
What I Learned From Innovation Sprints
A few years ago, I led innovation sprints for an organization. This was the first approach to something like it, so we used a proven methodology and hired some experts to help us.
Aside from what they were measuring, I decided to have my own “absurd” indicators, just to have something else to throw to the reports in case we were not successful. One of those things was the engagement towards this innovation sprints.
The first reaction from most people was disbelief. Most comments referred to things in the past that just caused more work and no different outcomes.
This time I knew it was going to be different, having the full support of the president of the group and the executive team.
I started measuring the engagement for each sprint, and the result may seem obvious, but the insight that followed shaped everything we did next.
The more engagement we had for each sprint, the better results we had for it, and this created a virtuous cycle, where the more success a sprint had, the more engagement we had for the next sprint and so on.
The secret sauce for this? I chose the newest employees in the company to participate in the initial sprint.
Fresh ideas, no skepticism, high motivation and the opportunity for them to get the attention of the senior leadership in the organization.
With that first unexpected finding using a different metric, I added these other “side metrics”:
- Engagement
- Idea Quality and Kill Rate
- Knowledge and Learning Velocity
- Expected Value
- Cultural Safety and Experimentation Inputs
Engagement
Engagement is measured by number of participants, attendance rate, and active collaboration during each sprint.
Most organizations wouldn’t consider this a formal innovation metric, but enthusiasm is the raw material of every good idea.
When people show up and bring their thinking, innovation becomes possible. When they don’t, no methodology in the world will save you.
Idea Quality and Kill Rate
Idea Quality and Kill Rate is measured by the ratio of ideas presented versus those that advance to the next stage. Every idea deserves a fair hearing, but not every idea deserves resources.
Three questions filter the noise:
- Does it make sense for this organization?
- Do we have the skills and knowledge to make this tangible?
- Does it have the potential to be profitable?
Ideas that can’t clear that bar should be killed immediately, and that’s not failure, that’s discipline.
Tracking your kill rate tells you how well your team generates ideas and how honest your organization is about where to spend its energy.
Knowledge and Learning Velocity
The most relevant metric on this list, and the trickiest to capture.
Even when initiatives do not become a success, the team acquires technical skills, market domain knowledge, and a new forward-thinking mindset.
To measure this, track how frequently data, code, patents or market research from past initiatives are reused. Audit the new technical proficiencies, tools or frameworks mastered by team members.
Then measure how participants in innovation cycles lift the performance and problem-solving skills of core operational teams.
This metric will tell you how people become better at what they do, by doing other things
Expected Value
At this stage, trying to measure ROI makes no sense, but we still need to justify the investment to the finance team.
In his book Expected Value: The System to Measure, Prove and Scale Value, Simon Hill developed a framework that considers confidence, predicted value and time sensitivity to calculate the expected worth of an idea using these specific variables.
This can also force highly uncertain ideas to be discarded rather than pursuing them because they seem to be exciting.
Cultural Safety and Experimentation Inputs
This metric, when applied correctly, will fuel the first one for upcoming cycles.
Measure employees’ willingness to take calculated risks, time dedicated to experimentation and lessons captured from unsuccessful tests. Communicate those results openly.
When people see that participating in innovation carries no negative repercussions on their performance metrics, something shifts.
Innovating stops being an obligation and becomes something people aspire to be part of.
The Wrap
When you want to innovate, you must be innovative in how you do it. Think differently, measure differently, recognize differently, and when it works, keep doing it.
In the gym, once you figure out which food and exercises work for your body, you stick to the routine.
These 5 metrics are the measuring tape and scale your organization needs to track the effectiveness of your innovation program.
Now it’s just a matter of showing up every day and checking the mirror for your gains.
