In part one of this series, “Why Measure Innovation by Capability,” I discussed some key insights from Tech Clarity’s latest whitepaper, 5 Ways to Measure Innovation Performance,” and why product leaders need to measure both innovation capability and desired outcomes to improve innovation performance. Now, let’s dive into the first three factors that will help you monitor and improve your organization’s innovation performance, according to Tech Clarity.
Measuring Product Innovation Capability
- Innovation Contributions—understand the source of each idea. This is crucial! Every department can have unique customer insights or you may include the participation of external groups, so don’t rely solely on R&D and marketing. Further, uncover the percentage of the innovation portfolio that comes directly from customers as well as the number of initiatives that receive participation and feedback.
- Strategic Portfolio Metrics—monitor how much innovation is in the pipeline and whether or not each initiative is tied to strategic goals. With product portfolio management (PPM), you can select the right projects and apply the right resources to ultimately improve visibility and decision making. Objectively measure each objective against the goal it fulfills. Some PPM metrics to consider include strategic fit scores, competitive impact scores, and risk versus reward.
- Calculated Risk Taking—celebrate and learn from failures, while still keeping risk balanced. But keep in mind, failure reasons and risk factors are only valuable if people aren’t afraid to be honest. Understand the extent to which your company’s risk tolerance is leveraged, and whether or not people are playing it safe. Safe bets only bring limited rewards, and often limit innovation.
Stay tuned for part three of this series, where I discuss the final two factors to consider in measuring innovation capability. Find more detail on all five factors right now in the whitepaper, Top 5 Ways to Measure Product Innovation. By using these factors to measure product innovation capability, you can be more confident placing your future initiatives in the spotlight. You may even receive that coveted standing ovation at your next product launch.