Measuring Innovation

Jay Arthur
888-468-1537
303-756-9144
KnowWare International, Inc.
DBA LifeStar
2253 S. Oneida
Ste 3D
Denver, CO 80224

We work with companies
that want to fire up their profits using
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Copyright © 2011

In the late 70s, I worked at Bell Labs developing software for the Bell System. While most software engineers still gag at the thought of measuring software development, we were tracking cycle times, defects, and costs way back then. So I never understood why anyone would think that you can't measure innovation. You just need to tweak the metrics a little bit.

In Christopher Meyer's book, Relentless Growth-How Silicon Valley Innovation Strategies Can Work in Your Business, he devotes a whole chapter to measuring innovation! Here's an abstract of his recommendations. He suggests that the five classic results measures to watch are:

1. Performance: How well does the total solution perform relative to requirements and the competition (Sounds like QFD doesn't it?)
2. Quality: defects and delay
3. Timing (i.e., speed to market): Internal development schedule (cycle time) and external market timing.
4. Financials: cost, margins, and revenue expectations.
5. Development costs: Specific project costs.

Here are some key measures of innovation used in Silicon Valley:

• Cycle time
• Percent of product/service tests passed
• Turnover (personnel changes)
• Specification or requirement changes (changes)
• Percent reuse (how much tested stuff did you borrow?)
• Percent new parts (how much stuff is untested)
• Percent unique parts (potential integration difficulties)
• Percent new vendors
• Percent staffed to plan (under/over staffed)
• Percent of time lost to other projects

Have you been putting off measuring your innovation processes? What ideas can you reuse from this list to get started now? What ideas do these give you for making immediate improvements in your innovation processes? What measures of innovation are you already using? Send them to knowwareman@qimacros.com.

© 2008 Jay Arthur, the KnowWare® Man, works with managers who want to plug the leaks in their cash flow.

Hire Jay Arthur to train your staff in his one-day Lean Six Sigma Workshop! Contact Jay at (888) 468-1537, support@qimacros.com.

Rights to reprint this article in company periodicals is freely given with the inclusion of the following tag line: "© 2008 Jay Arthur, the KnowWare® Man, (888) 468-1537, support@qimacros.com."

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