How to Use Innovation Metrics

By: Rob Hoehn

Last year, one of the most popular topics at the annual Open Nation innovation conference was metrics. How do you measure your innovation capabilities? How do you track your results from established programs?

If you check out our easy-to-scan infographic on the subject, you will learn that metrics are most often separated into innovation inputs (measuring your innovation capacity and capability) and innovation outputs (your results and impact of those investments). We heard from innovation leaders who measured these two things in a number of different ways: professional development metrics, patents filed, or even lives saved.

This discussion resulted in the need for a deeper dive and conversation around predictable results and potential benchmarks. We looked into IdeaScale’s historic system data in conjunction with tracked results and realized that we were able to put an average value both per member within an idea management system and for each idea in the system. We took that data and used it to create an ROI calculator which allows any idea manager to estimate the potential cost savings or revenue growth that is possible from a system like this.

Of course, this sort of estimation is only a starting points and underscores two other idea management program must-haves:

Why Engagement Matters

Both members and ideas have an intrinsic value, which is why you must create a program that draws people in and encourages them to participate repeatedly. We also need to shift our expectations on how much we require of each interaction. Not every idea needs to be the mega solar panel that’s propelling your company forward into the future – not every member needs to be a power contributor, positing ideas that build your product portfolio across the five, ten, and fifty-year horizons. But a rewarding ROI comes when you can capture the interest of many people and encourage them to make some contribution even if it’s sharing an idea they like to their smaller, niche network. That’s why it’s important to gain some empathy with your audience and put effort into crafting a quality problem statement or drafting a comprehensive and reusable communications strategy. Without this, you won’t achieve the promised ROI.

Why Measuring Matters

And, of course, you have to commit to measuring these systems yourself and at least tracking your innovation inputs even if all you care about are the innovation outputs. These systems should be iterative and could have multiple inputs.  You should not stop yourself from measuring idea value by waiting for 100% accuracy – your accuracy will improve over time as you get better at measuring.

You can start by making rough estimates to gauge relative progress. One of our customers performs a simple calculation: (time saved x average hourly wage at the company) x number of staff impacted. That number, however rough, becomes a guidepost when an idea’s relative value is validated at some later point in time (maybe six months) to get a sense if it’s really working that well (or potentially better). These measures not only help you prioritize your work and validate your program, but they help others to see that they personally and collectively are having an impact in these systems. Which helps engagement, which helps in generating measurable results, and that is the beginning of a virtuous cycle.

To find out how much impact an idea management system could have at your organization, try out our ROI calculator for free. 

By Rob Hoehn