One of the constant challenges for an innovator is to prove the value of their work. Many believe that innovation and creativity cannot be measured and therefore will always struggle with getting the respect it deserves within an organization.
The perception that innovation impact cannot be measures is a myth. At the same time, its not a slam dunk either. The challenge is getting an organization aligned on what the right metrics and measurements.
One metric that is commonly used and one that I don’t agree with is:
Innovation = R&D Spend as % of Revenue
This is the metric that Wall Street applies to most companies. So what’s wrong with it? Its non-predictive of future success and it doesn’t take into account:
- Innovation delay: They are measuring future output of R&D spend against today’s revenue. Any valid metric needs to ensure time scales are consistent.
- Revenue is impacted by a lot more than just R&D spend: Revenue has a lot of things thrown in that are not impacted or even influenced by innovation/R&D spend. A valid metric needs to ensure that the components of the metric is influenced by R&D.
To read the full, original article click on this link: Can you measure the impact from innovation? | Phil McKinney - Sharing his experiences on innovation, creativity and ingenuity
Author: philmckinney
