If your organization has decided to implement an innovation strategy, the most crucial component to plan for is how you will measure and benchmark the strategy’s success. Benchmarking is important because it let’s you measure your performance and analyze trends to enable continuous learning and improvement. This learning can help nurture and improve the innovation culture in your organization.
As of 2015, over 50% of organizations defined their innovation programs as ad hoc or emerging. So for those organizations, just beginning to develop their innovation strategies, how do you benchmark innovation effectively for continued success?
Determine what to measure.
Choosing metrics upon which to benchmark is arguably the most difficult component of the process. For companies just beginning their innovation journey, it may be harder to determine which metrics make the most sense to measure. You can measure innovation performance on an individual level, or as a whole.
Individual innovation metrics
Many of the innovation metrics you want to track, on an individual level, will be tied to the particular product’s performance. For example, you want to know the cost of developing this product and the revenue derived from it to evaluate its success, and therefore, the success of the inventor or researcher. You will also want to look at this from an intellectual property standpoint, as one product can involve multiple pieces of intellectual property. With a streamlined organizational system for your IP, you can easily locate and assess the inventor(s) behind certain products and/or intellectual property.
Strategic innovation metrics
These metrics will help shed light on your organization’s strategic innovation initiative as a whole. Some metrics you may want to track are:
- The size, value, and success of your intellectual property portfolio
- Number of employees and the percent of their time spent on developing projects outside their day-to-day roles
- Number of ideas compared to number of employees
- Value of investment for innovation-related projects like hackathons, hiring innovation officers, providing materials, and trainings
Once you’ve determined which metrics to track, set up tools and processes to continuously gather results.
Decide who or what to benchmark against.
At its core, benchmarking is just a comparison of how your organization stacks up against another. Without comparison, measuring your organization’s performance only provides half the picture; there’s no frame of reference to determine if your performance is stellar or needs improvement.
There are a few options on which to benchmark against.
- Industry standards or best practices
- Competitors and other industry players
- Companies outside your industry with similar processes
- Your own organization’s past performance
While some of this data may be difficult to find, comparing your organization against more benchmarks will give you a holistic view of how your organization’s innovation stacks up.
Set time-bound goals.
As you begin to evaluate where your organization currently performs, set short, mid, and long term goals for future innovation and plan initiatives to reach them. For example, if your organization needs to increase the number of ideas generated to compare against industry standards, set a goal for the number of ideas the organization should generate in the next 6, 12, and 24 months. Perhaps your initiatives for reaching those goals are to invest in more hackathons, develop an inventor incentive program, or grant employees unstructured time to pursue ideas.
Conduct regular reviews.
Lastly, it’s important to consistently evaluate how your organization is benchmarking in order to evaluate improvement. Set up dashboards to enable easy monitoring of key metrics as part of your regular, day-to-day tasks. Additionally, hold formal reviews with organization leadership and share performance data with employees to motivate ongoing innovation.
Benchmarking the performance of your organization’s innovation initiatives is a key part of making improvements. It allows your organization to determine where it falls short against top performers and where it is a leader. As an added benefit, broadcasting innovation performance information can help encourage employees to spend more energy innovating, to enable improvement.
To learn more about tracking and managing innovations at the intellectual property level, download this case study.