In a recent virtual gathering for members of the InnoLead network, executives shared what metrics their teams are tracking in 2020. Contributors joined in from a variety of industries — including pharmaceuticals, food and beverages, tech, financial services, health care, consumer products, and materials. To create a safe place, we promised to keep company names confidential, but notes from the gathering are below. You can also access a set of three PowerPoint slides that participants shared, covering how three different companies think about metrics.
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Highlights
- What you measure depends on:
- How you originally sold innovation to the leadership at your organization.
- What your mission is.
- How far along you are on your innovation journey. Early teams and later-stage teams need to measure different things.
- The first is volume, which includes number of ideas generated, number of employees trained, and number of pilots.
- The second category is value-based metrics, including revenue, cost savings or efficiencies created, and speed to market.
- Development hours — how many hours they actually use to make the products. This does not include meetings.
- Cycle times — how long it takes to pass the project along.
- Complexity — how hard is it to do a task? Is it an easy win or a more complex new product?
- Dollars per development hour — the cost of development time and the various levels of overhead.
- Kill rate — how many projects were killed, and at what stage. (Killing projects sooner is better than later.)
- When stakeholders change often, keeping track of metrics becomes especially important. The metrics people are interested in may change based on the audience.
- When describing projects, one team in the technology sector gathers reports and comments throughout the process. They then turn that the text database into a “word cloud,” where the most used phrases appear larger. This helps their team determine what topics and themes have been getting the greatest focus.
- For teams that work on subscription-based products or services, customer attrition and years of customer loyalty provide an important metric.
- Some teams measure the employee experience, when people are engaged in an innovation project or initiative. Key Value Indicators are based on surveys about innovation initiatives. These surveys ask questions about how people feel. The goal is to find and motivate intrapreneurs.
- Core, adjacent, and transformational projects all require different metrics. One leader from a food and beverage company shared metrics for the three types of projects:
- Core innovations — number of new consumers, number of current consumers that shop for products more often, and net contribution margin.
- Adjacent — attracting new consumers (tapping a new type of consumer or market), return on investment, and gross product margin.
- Transformational — addressing unmet customer needs, number of experiments, number of new business models ready to scale, velocity, and number of partnerships.
Metrics fall into two categories for many teams.
One team in consumer products shared a scorecard that they show to their senior leadership team on a monthly basis. This team is tasked with designing new products, so metrics focus on tracking the critical requirements and manufacturing needs. The scorecard shows:
