How do you measure the success of your innovation program? We all realize that the desired long-term outcome is massive growth and billions of dollars, but along the way we must make sure we are measuring our progress honestly and in a fashion that demonstrates how our organization has benefitted. Getting the numbers right is crucial. As I discussed in my recent Impact 2019 keynote, the metrics you establish and communicate dictate your success or failure.
In my experience guiding corporate innovators, I have found that even the most well-intentioned teams aren’t evaluating true impact—instead, they deliver vanity metrics, which offer, at best, a measurement of partial engagement.
How do you know if your metrics are vanity metrics?
Here is a checklist:
You are measuring number of downloads
You are measuring the number of people who underwent training
You are measuring the number of people in your Slack channel/Telegram workgroup, etc.
You are measuring website traffic, video views, innovation team sign-ups, etc.
The goal here is differentiating virtual impact vs. true impact. When it comes to measuring the success of your innovation program, engagement in the real world and observed behavior change are primary.
An effective, bottom-line impact checklist:
You are measuring the number of people participating in off-hours workshops (GOOD)
You are measuring the number of managers and executive participating in these workshops (BETTER)
You are measuring how many of these pilot programs are being broadly tested across the organization or have been championed by leadership as the new standard (BEST)
I realize the preference for in-person engagement might make me seem like a Luddite. But when we consider how tricky innovation benchmarking can be, it is better to eliminate uncertainty whenever possible.
According to a Strategy & Global 1,000 study, innovation spending among the world’s 1,000 largest publicly listed corporations reached an all-time high of $702 Billion in 2017. In a related study, quoted recently in the Harvard Business Review, organizations spent $359 billion globally on training in 2016.
Did such considerable investment generate impact, or was it an expensive lesson in vanity metrics?
Results from training surveys quoted by HBR were not encouraging:
75% of 1,500 managers surveyed from across 50 organizations were dissatisfied with their company’s Learning & Development (L&D) function;
70% of employees report that they don’t have mastery of the skills needed to do their jobs;
Only 12% of employees apply new skills learned in L&D programs to their jobs; and
Only 25% of respondents to a recent McKinsey survey believe that training measurably improved performance.
Where do you go from here?
Get Management Interested
Getting the support of management cannot be emphasized enough, both in terms of your metrics and the success of your program. The challenge is assuring that their engagement is real, and not just “signaling.”
The resistance you encounter is real. According to a study done by Wipro Digital, 1 in 5 senior executives “admit that they secretly believe that digital transformation projects in their company are a waste of time,” even though there is mounting evidence that digital transformation is the only option for future survival.
Keep Management Involved
In a recent Medium post, I talked about demonstrating value as managers fearing recession cut innovation program budgets.
A similar urgency is required to keep management involved in your program and a key winning factor in putting true impact in your metrics.
Rate Management Engagement
Our Value Stream Discovery (VSD) loop and toolkit is a handy way to score management engagement and keep things honest.
For those who aren’t familiar with VSD, the tool helps determine an internal startups metric that represents “progress toward impact.” Investment decisions are made based upon the numbers. The carrot for those who volunteer for the hackathon: they get to continue to work on the project at some percentage of their team if their idea receives investment. Even better, they receive a bonus based upon the actual impact if they progress that far.
If you are looking for a deeper dive, Mastering Metrics is a solid book on the subject. I also recommend The Lean Entrepreneur, my last book, to help you bring the startup mindset to your organization.
And for those of you who are just getting started, our Readiness Assessment is designed for assessing where your organization is excelling and what a bold implementation roadmap would look like.
Brant Cooper is the author of the New York Times bestseller The Lean Entrepreneur. He also serves as an advisor to entrepreneurs, accelerators and corporate innovation teams. He is CEO of Moves The Needle, which empowers organizations to discover and create new value.