By Henra Mayer.
Substantial, innovative returns will not come from small, niche innovation capabilities or traditional metrics
We tend to get what we plan for and drive what we measure. When executives acknowledge and accept the different risk profiles of innovative projects and its unique requirements, substantial return can be better supported and tracked. But when known approaches are followed and innovation budgets get allocated last, you have guessed it, innovation will become nothing more than a small niche capability.
Innovation is adopted in an organisation to support strategic growth and create the future of the organisation, a small niche capability is not what we are after. Strategic innovation initiatives therefore possibly have a “split personality”. It needs to be treated like any other high profile strategic project in terms of strategic alignment and planning, resource allocation, measurement and tracking, budget allocation and defining ROI by means of a carefully crafted business case. The management thereof and especially the way in which we measure ROI however, requires differentiated metrics and an alternative approach.
According to Gartner’s 2016 CIO survey, a portfolio management approach makes more sense. When communicating with the executive team, make the connection between the lack of innovation and the metrics being applied to prioritise projects and monitor performance. If executives want more innovation, apart from strategic intent, they have to change the metrics. One way to change metrics could be to:
- Kick off with an introduction to speed and learning metrics, then
- To institutionalise “time to truth” and goal post metrics and lastly commit to
- The creation of entirely different sets of metrics based on exploitation and exploration.
Doing the above well, off course means that we need to consider building innovation capability in its totality and treat it as a high profile project.