Business innovation is a practice in paradox. Giving innovation room to breathe is important for the expansion and flexibility of good ideas; still, measuring the success of change is critical to building strategies around innovation initiatives.
The ambition to bring something new to market is in a constant face-off with the need to prove that it solves a problem. Fortunately, there’s plenty of drive to shape evaluation methods around innovation strategy as it’s being mapped, which is helping both to evolve together into an effective, synthesized business discipline.
Making Innovation Measurable
In general the purpose of innovation is obvious and agreed upon: have good ideas and use them to generate cutting-edge solutions. Yet, there’s so much focus, and disparity, on the drilled-down meaning of innovation — vacillating between a form of creativity and the definitive action of implementing ideas — that measuring the success of innovation is like trying to analyze and compare the gas mileage of a bus to a car.
Jumping the hurdle of inconsistent definitions isn’t easy, but it can and should be done. Focusing on the core elements of innovation, like encouraging real-time customer feedback, collecting and using data wisely, and understanding the power of iteration, are all more useful tools for improving evaluation practices, anyway.
Know What You’re Working With
That said, the type of innovation that’s being measured does make a difference in the method of analysis used. Innovation typically falls under one of four categories and can be addressed accordingly:
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- Product innovation. If the goal is to create a cutting-edge product, measuring its success will come from things like market feedback, competitor actions, customer adoptions, and easily quantifiable data. Analyses can be really straightforward, since the answer is typically feature-based.
- Process innovation. Measuring and improving processes is also fairly direct, although not as easy as with products and services. But here, you still get the benefits of feedback loops and tangible data, whether it’s coming from your customers or internal stakeholders. Enter the more recently popular practice of Positive Deviance, a method “based on the observation that in every community there are certain individuals or groups whose uncommon behaviors and strategies enable them to find better solutions to problems than their peers.” It basically allows for iteration to happen as problems are discovered, which means that evaluation is constant and issues are dealt with more or less immediately.
- Market innovation. This has a lot to do with communication about products and processes. It’s about altering or upholding perceptions where necessary in order to foster widespread adoption. Again, measuring the success of this type of innovation will be evident in growth and return numbers, virility, and community support, but the main challenge here is application. What works and what doesn’t is highly dependent on the subject, and whether or not it has a positive or negative reputation to begin with — for example, trying to convince today’s mobile worker that wireless devices aren’t always necessary, versus trying to bolster the idea that mobility itself is key to modern productivity. Neither is impossible, but the evaluation strategy behind one will almost certainly not be useful for the other.
- Organizational innovation. This is all about unlikely partnerships, and analyzing the success of those has two sides. The obvious — things like ROI, and other expected circumstances previously mentioned — but also must be checked against the symbiotic power of the relationship between entities. Imbalances in these partnerships can bring about failure pretty quickly, and it’s important that, in one way or another, B2B innovations bring returns to both sides equally.
Mapping the Innovation Environment
It’s expected that any business worth the title has done its homework. Competitors have been identified, dynamics discussed, issues raised, and resources pinpointed. Those efforts have to be considered against various characteristics of the organization as well as the specific innovation barriers it faces. As detailed in this report, a “fruitful” innovation environment typically includes the following:
- A diversity of opinions and expertise
- Porous boundaries across disciplines, departments, firms, and/or organizations
- A culture of experimentation and re-use
- Norms and practices that actively encourage idea-sharing
It also requires a strategic blueprint: a non-linear approach to feedback, evaluation, and iteration. By mapping out these preferable traits against methods of analysis and other company efforts, businesses can visually assess the relationships between things like funding and user communities, or trace the paths of failed initiatives to see where things went wrong.
Business innovation is, by nature, cyclical — its application informs its success or failure, which in turn determines approach. As innovation continues to become more strategically relevant, so will its evaluation; in the end, each will help businesses think differently about the other, which is what innovation is really all about, anyway.