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Innovation Management

Why Measuring the Value of Your Innovation Program from Day One is Important

Published By Doug Williams

Every year Planview IdeaPlace conducts its “State of Crowdsourced Innovation” customer study to better understand how our customers build and manage their innovation programs. As we analyze this data year over year, we can see trends emerge and see how what’s important to them changes over time.

One of the key findings from this research is that a significant shift occurs at around the three-year mark of having an innovation program. This shift centers around measurement of program value.

In the early years of launching and nourishing a crowdsourcing program, the focus is on employee engagement. Our survey data bears this out: 86% of our customers cite building a culture of innovation and 81% cite increasing employee engagement in innovation as the top reasons for implementing a crowdsourcing program in the first place, as compared to just 39% who cite developing better products and services.

When engaging employees in ideation, our customers measure certain obvious metrics such as the quantity of visitors to the challenge site, the number of ideas submitted, the crowd’s activity in improving and validating those ideas, etc.

At the program level, you can aggregate those data points to measure the overall impact of the program on engagement. Those are all valuable measurements, but they are what we call indirect measurements of value, because they aren’t directly tied to a financial outcome. Sure, if you drilled down far enough, you can get to an actual dollars and cents number. But it’s not easy, it may require the assistance of other (unwilling) actors, and it may only tell part of the story.

So what changes around year three? The answer: An increased focus on measuring direct financial value of the program to the business. It is at this time that the business expects to start seeing a financial return on the investment in the program. That doesn’t mean the business suddenly stops caring about engagement; it simply means that enough time has passed such that some ideas selected for action should be implemented and their value measured by now.

We’ve heard from our customers that this is often when an executive sponsor or somebody even a little further up the food chain starts to ask more probing questions, such as:

  • What are we actually getting out of this program?
  • What ideas do we have that align with our strategy?
  • What ideas do we have in our innovation pipeline?
  • What ideas have become successful projects?
  • How long does it take an idea to be realized?
  • What is the value?

To build upon an oft-quoted line from the movie Field of Dreams, “If you build it, they will come…and eventually ask you to justify it.” You don’t know exactly when it’s going to come, but with what our customers have shared and based on our experience in the market for over ten years, an executive/program sponsor WILL ask the question, and you need to be ready with an answer. Better yet: give them the answer before they ask. And the only way to be fully prepared is to start answering that question on day one of your program.

Identify value creation by being involved in idea implementation

When it comes to proving the value of an innovation program, the challenge for many program leaders comes down to how involved they are in the idea implementation process.

Our data shows that only about one-quarter of innovation teams are involved in the implementation of ideas in every challenge they run. It’s just not very common. An even smaller number (6%) are not involved at all. That leaves the majority who are in a hybrid model where the level of involvement in implementation varies.

Our position is that it is incumbent upon the innovation team on the whole and the program manager in particular to find a role for him- or herself in the implementation process for every challenge. How involved you are can vary. We see three roles:

  • First, the Advisor, who helps in the selection of ideas for further action from an ideation challenge.
  • Second, the Facilitator, who also creates and modifies processes to enhance the effectiveness and efficiency of implementation.
  • Third, the Partner, who shares ownership of implementation risks and benefits and who dedicates resources to planning, prototyping, and testing actionable ideas for the business.

Being involved in idea implementation as an Advisor (at a minimum) gives the program manager the ability to assess the initial value of a new project, and maintain visibility into the creation of value as the project progresses. That information gives you exactly what you need to be able to capture and track the value of the implemented ideas generated, which is the direct financial impact that your sponsor or executive will one day come looking for.

The only question now is, are you going to take on this responsibility now and arm yourself with data to demonstrate this value, or are you going to wait for someone to ask first and scramble for an answer — assuming you are granted the time to find one? I know what I’d choose.

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Written by Doug Williams Innovation Architect

Doug Williams is an Innovation Consultant at Planview who provides strategic guidance and implementation services to innovation leaders at some of Planview Spigit’s most respected Fortune 500 customers. He designs programs to raise innovation competency throughout the company while delivering measurable business outcomes and increasing employee engagement. Prior to joining Spigit 4.5 years ago, Doug was an analyst at Forrester Research where he launched and led Forrester’s coverage of open innovation and co-creation, with a focus on how technology enables collaboration among diverse groups. He also served as Chief Research Officer at Innovation Excellence .