I've spoken with two people in the last couple of weeks who said that innovation is one of their company's hot buttons right now. One is in a mid-sized company and one runs a group responsible for a huge amount of money (as in if you're a small company their rounding errors could fund you for a year) for a large global company. In both cases when asked on what metrics are they being measured the answer was "not a dang thing". In fact, said my friend at the large company, although failure is expected when innovating, everyone is scared to make the smallest misstep that might mess up next quarter and get them canned. "We are measured on profit for the next quarter."
Lots of people have said it: you get what you measure. If you don't set up some metrics to measure and reward people for the fundamental activities surrounding innovation people won't spend their time and resources doing those things. How many salespeople do you know who spend their time doing things that don't bring in their commission?
How many stories do you have in your organization of spectacular failures? How many people go into their performance reviews and proudly tell their managers they failed five times? Of course, those better not be the same five failures--and hopefully those failures provided lessons learned that led to or will lead to successes.
Does your performance review have a place to indicate the five places you took a risk and what you think the result was? For your manager to indicate the same? For the fifty ideas you submitted, the twenty that you provided serious details for, and the one that made it through the first stage? The mean time between ideation and market? The external technologies, ideas, and concepts you explored that were related and unrelated to your job that led to ideas or innovations? The rewards you gave people for submitting ideas, for taking risks, for failing forward, for sacrificing some profit next quarter for a whole bunch more three quarters from now?
Do staff keep innovation journals? Are unit managers measured on the number of substantive initiatives they have taken with other units to create new offerings? Is there a place to record it and is it part of how they are measured?
Start with yourself. If you don't already do it for productivity reasons, start writing down how you spend your time. Do it real time. Every time you switch activities record it. Peter Drucker wrote and excellent chapter called "Know Thy Time" in The Effective Executive that provides great insight and examples of how people really don't know how they spend their time. When he recommended recording everything you do for a period of time on a regular basis, some of the executives had their assistants do it--and then almost fired them for recording "the wrong things" when, in fact, their assistants recorded exactly what the executives did. It was only when the executive recorded his time himself that he found out he didn't spend his time where he thought.
Analyzing the results of a two week log will not only help you be more effective, but will also tell you what is important to you--or at least what you make important to you. Your time is the most important resource you have; how you spend it tells you what you've made important. How much of it was doing innovation-related activities? If they aren't important enough for your organization to measure, staff will likely not spend time doing them. If the boss comes by and says "what are you doing" and the answer is "experimenting" and that's not something measured and the reply is "get back to work", you can bet that won't happen again very often.
So, what you don't measure you don't get. Not only that, but sometimes what you do measure opposes what you say you want. As mentioned above, short term results is a great example. "We've changed the corporate vision to include innovation. Thou shalt now innovate. Go forth and innovate using all the best practices." Great! But then if next quarter is the only measurement, you have to fund the innovations that don't contribute to next quarter, and that funding has to come from your current budget, guess what? You got it--nothing happens. Similarly, if the CEO isn't measured on practical innovation metrics (amount of revenue from offerings in the past x years, number of new offerings per year, number of ideas from outside the organization, etc.) and doesn't insist on innovation measurements, then no dice.
The long and short of it is the two guys I mentioned at the beginning are very innovative. Both could drive more long term success at their organizations. Both would have to buck the system to actually do it. So their organizations lose in the long run. Go tell a construction worker to create a straight line to cut using a one inch ruler instead of his 25 foot measuring tape and see what he says. I'll bet I can guess the number of letters in some of the words.
Here's to measuring up.
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