KPI Portal

Measurement of innovation

This morning Jan van den Ende, professor Innovation Management at the Erasmus University of Rotterdam, spoke about Innovation Management at BNR newsradio (note that this radio fragment is in Dutch). Innovation is a hot topic in today’s economy as well as in the scientific world.

Besides some nice examples of innovation management, the area of measuring innovation was mentioned briefly by naming the KPI “turnover of new products”. This relatively ordinary example made me curious about how organizations can measure their ‘innovativeness’. Besides the incentive to innovate, most managers like to measure something like the return on investments or the innovation process, after all. But innovation is something that is hard to measure. KPI Portal accommodates merely four KPI’s with the tag ‘innovation’ and five KPI’s for measuring the business process ‘Research & Development’. Not that much measures, and I’m wondering how useful they really are.

I’m wondering if innovation is measurable at all. How can we measure something that still has to be invented? It’s nearly impossible to determine norms. And by determining the actual values (costs, elapsed time, etc.) during the development, which variables have to be allocated to the process of innovation? A strict definition before starting the innovation process is a must.

This raises another issue: when does an innovation process begin? One of the critical factors of innovation is creativity. Is creativity something that can be captured in a process? And, if one is able to capture it in a process, doesn’t that capturing interfere with the creativity?

Maybe I’m a little sceptical. Of course KPI’s like the turnover of new products, the number of accepted ideas and the number and age of company patents give an indication of what we call the innovation process. But I still think this is not proactive and meaningful enough to steer on.

How do you measure the innovativeness of your company? And how do you think about the issues mentioned above? Please contribute to this discussion by the discussion form below and I hope we help each other to get more insight and grip on innovation.