Innovations and perfomance managment

Some general facts 1 (according to BCG survey, 2009)
73% executives believe measuring innovation is important
32% executives are satisfied with their company’s innovation-measurement practices
46% executives said that they actually use such practices
52% executives said they use up to 5 metrics
27% executives attempt to drive innovation by linking employees incentives to innovation metrics

Some general facts 2 (according to BCG survey, 2009)
Companies consider themselves
most effective at measuring innovation outputs (revenue growth, shareholder return, brand impact)
less successful at tracking innovation inputs
(people, funds invested)
not effective at measuring the quality of their innovation processes ( input ? output)

What are companies measuring and which metrics are they using?
Metrics used
total funds invested in growth projects
revenue from new offerings
allocation of investments across projects
projected VS actual performance
average development time per project
number of projects that meet planned targets

What are companies measuring and which metrics are they using?
Alternative metrics
percentage of sales derived from new offerings
number of senior inventors allocated to each innovation
number of patents and awards earned by staff
number of project-quality tests passed successfully
gains in market share (including cannibalism)

What’s the problem?

Example – technological company

Measuring technical efficiency of innovation performance of a company
Regional aspects
impact of institutional factors
Industry aspects
impact of industry norms
Size aspects
impact of implicit relations within organizations

Inputs
% companies with special employees for innovative activities
% employees involved in innovative activities
% time spend on innovative activities
% employees with masters or university degree
% employees with training financed by own company
% companies with relatively more advanced machinery and equipment

Processes
% companies that made use of national innovation and technology subsidies % companies with continuous innovating as part of the company strategy
% companies that have written down innovative plans
% companies with a change in organizational structure in last 2 years
% companies that performed or outsourced market research in last 2 years
% companies that cooperate for innovative activities
Use of the intermediary organization for information or advice
Outsourcing of innovative activities

Outputs
% companies that posses patents
% of new products or services in total turnover
% companies with new product/services for industry
% companies with new product/services for country
Number of different innovative activities