"Not everything that counts can be counted, and not everything that can be counted counts" - Albert Einstein

You’ve taken that first step of establishing a creative and innovative culture within your organization.  Congratulations!  You’ve also started to capture the ideas that are percolating up from your employees and customers.  Great job!  The development of an idea/innovation management system that allows you to convert those great ideas into profitable new products/services for your customers is also producing results.  Again, kudos!

So where do you go from here?  The next challenge is to measure the success and/or failure of the ideas you have decided to pursue, quantify the financial impact of your innovation program and finally, report on the overall health of your creativity/innovation system.  Although this is often easier said than done, it can be quite simple if you choose to measure the right parameters.

First of all, why capture this information at all?  In most organizational cultures…money talks.  If you cannot clearly quantify how your innovation program is affecting the bottom line, then you likely will not have an innovation system to manage much longer.  Here are a few other reasons to establish an innovation metrics system:

• Ensure upper management support
• Demonstrate that the system is generating the expected benefits
• Ensure that the correct resources are being applied
• Motivate the innovation managers, teams and employees
• Kill or alter unsuccessful idea-based projects

With the need for metrics now established, the “what to measure” question should be next.  Let’s review some of the more common and popular innovation-related metrics:

• Financial-Based Metrics

• Percentage of capital invested in innovation
• Number of new products/services launched
• Percentage of revenue from new products/services
• Change in company’s market value or share

• Process-Based Metrics

• Percentage of work time committed to innovation/new concepts
• Ratio of successful ideas to total ideas submitted
• Average time from idea submission to product/service launch

• Culture-Based Metrics

• Ratio of senior executive time spent on innovation efforts versus day-to-day operations
• Number of managers receiving creativity/innovation management training
• Number of ideas submitted by customers

• Employee-Based Metrics

• Percentage of employees with an innovation-based performance goal
• Number of employees receiving creativity/innovation training
• Number of ideas submitted by employees

As you can see, it is important to establish only a few metrics across broad categories in order to keep the data collection manageable, while ensuring you have a good snapshot on the health of your innovation system.

Finally, the establishment of a few metric-related guidelines will make certain that you are not tempted to go “overboard” in your quest for measuring the impact of your innovation management pursuits.  These guidelines should also ensure that any changes in your business model will also be reflected in your idea management structure.

• Evaluate your existing metrics and determine if you can modify them to include creativity and innovation concepts
• Include a minimum amount of customer-centric metrics
• Avoid complex or formulaic metrics
• Avoid tracking every conceivable metric available
• Build a  metric portfolio that crosses every area of your organization at a summary or “rolled up” level

By establishing what you are defining as a successful innovation program within your organization and measuring a few key indicators to demonstrate the effectiveness of the program, you will be able to provide a reasoned and educated status of your efforts to senior leadership.  There is no doubt that money talks.   With that being said, having the ability to prove that your efforts are producing positive, bottom line-based results serves to only further enhance the senior executive commitment that makes any innovation system successful.