This is a difficult topic. I believe what’s worth doing can also be measured and there is also truth in the adage of “if you can’t measure it, you can’t manage it”. However, I have seen too many examples in which smart people get side-tracked on what really matters –the output – as they try to develop metrics in order to satisfy executives further up in the system.
The development of metrics for innovation in general has been a major topic for more than two decades. Yet there is no clear guidance on how companies should approach this in a way that makes it possible to measure internally let alone across competitors and/or different industries.
One reason that it is very difficult developing metrics that can work across larger companies – let alone different companies and industries – is that larger companies have several business units with different kinds of products and services. Even with the same company, it can like comparing apples and oranges. We also need to remind ourselves that innovation has lots of unknowns and intangibles and you cannot afford to lose the needed flexibility in order to meet some specific metric parameters.
Furthermore, it also takes the time it takes to build up data needed to follow progress over a longer period of time. There is a good chance that processes will be adapted making it even more difficult to use this data once captured.
I believe the main objective for metrics should be used to measure progress in what you do. This can happen in several different ways in relation to open innovation. It might give you some inspiration to consider metrics in overall categories such as these:
Organizational maturity: How well is your organization adapting to this new paradigm shift? This can be measured by the use of simple surveys among the employees and by cross-checking with external partners.
Ecosystem happiness: Your partners are important for innovation success so you need to develop metrics that track the progress within an ecosystem. Perhaps there should be an ecosystem or partner happiness index. Yes, it sounds corny, but there might be something in this idea.
Thought leadership / branding of capabilities: How others view your open innovation capabilities is critical. There is lots of experience on tracking marketing and PR efforts that can be relevant for getting a better understanding on this. A few potential metrics could be number of visits to the destination site, followers on Twitter, discussions in communities and mentions in articles.
Innovation output: Metrics on this can provide an overview on how innovation projects with a key external element perform compared with projects having a high degree of internal input.
I also found the below slide from an older presentation on Nokia’s open innovation efforts. It builds on some of Chesbrough’s earlier work. You can also find more inspiration in the below resources.
Resources:
Here you can find some resources on this topic. It is a collection of 15inno blog posts and other relevant articles, blog posts or websites. Please note that some of the 15inno posts might need an update, but they are still worth looking into. The comments are also helpful in giving an additional perspective.
15inno blog posts
• Innovation Metrics: Input From Intel, Sara Lee, Grundfos and J&J
• What metrics should we apply for open innovation? (discussion)
• Increasing the Innovation Productivity
• How to Measure Open Innovation Value – Part 1
• How to Measure Open Innovation Value – Part 2
• Measuring the Value of Open Innovation: Metrics, NPV and ROI (subscription required)
• P&G: New Goals for C+D to Accelerate Our Innovation
• Metrics for Open Innovation – “what’s my open innovation quotient”
This post is part of a series of posts as I develop a resource on how to implement open innovation. It is work in progress and your input is highly appreciated.
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