In a recent Q&A email, a member of the InnoLead community asked the following question:
“What metrics do you track to prove out the value of your innovation center? Do you have any specific benchmarks regarding increased sales/customer acquisition tied to the space (or insights from your work with clients)?”
Below are a few of the best responses — but we invite you to post your answer in the comments below.
Advice from Respondents
Respondent in medical devices
“Measuring success for our innovation center is a challenge. We have only been in existence for 3 ½ years. Our research typically takes 3-5 years, then add on a minimum of 2 years for R&D and release to manufacturing, the time from innovation conception to market is 5-7 years. If the idea is different than today’s medicine, then the market adoption curve in medical devices could easily tack on an additional 3-8 years. So, the time from innovation conception to market acceptance is 8-15 years…
Our approach is therefore not to measure success by sales of the end product. This takes so many years to happen that measuring success for current projects is unrealistic. We measure based on agreed upon ‘potential’. Does the potential match reality years later? Not always, but it is usually a pretty good indicator.Metrics we use to measure success of our innovation center:
- All projects are measured with the attached approach. Note: this is a generic example and not confidential.
- We use this method to initially determine whether to do a project or not.
- The scoring (i.e. metrics) is not that important. Rather the discussions around each category for the research is the most important exercise.
- The system is dynamic. In other words, the clinical contribution, market potential, risks, etc. change over time and therefore should be updated on a regular basis.
- Some of the metrics relate strictly to project management such as risks, timeline, funding.”
Respondent in healthcare
We can tie our innovation efforts to the number of new digital channels [we have] created to offer our services, as opposed to ‘brick-and-mortar’; therefore, the amount of new revenue associated with newly-established access is attributed to the innovation team.
InnovationLabs, innovation consulting firm
Normally we insist on defining the value proposition for an innovation center before it is built in order to assure that expectations and reality are at least in the same universe.
Some organizations try to measure the value quantitatively, but this is exceptionally difficult to do. The only way to directly link sales or customer acquisition to a center is if the customer comes into a center and gets such value from the visit that they say, “Yes, because of this innovation center we will work with you.” And who would ever do that? Practically no one. Relationships have many dimensions, so to attribute it to the center is usually a gross simplification of a much more complex set of factors.So for us, the metrics that make the most sense are qualitative, and they are assessed internally as well as externally. For example …
Does the innovation center help to build productive relationships with customers/clients? They will do so when customers come in to engage in co-creation or complex problem solving. When the leaving saying, “Wow, what a great experience! We could never have gotten there without it!” Then you know.We built a pop-up innovation center for the C team of one client, and after a week of working there they told us they had done more work in that center in a week on strategic topics than they had in 2 years. So they asked us to build them their own innovation lab at their HQ in France, which of course we were happy to do. We built them a cheap pop-up space that worked great.
Because the key is the space and the knowledge of how to run it. An innovation center by itself is never enough – you also have to learn how to make it work. Skills needed include facilitation, project management, visual management, documentation, information design, rapid prototyping (sometimes), design thinking, scenario planning, and lots of agile and agile innovation.What we tell people is that working in an innovation center you should experience a 10x productivity improvement when dealing with complex problems that require high levels of collaboration to solve. That’s hard to measure but easy to feel. It’s best when the organization’s leadership experiences it themselves, because the demonstration of value has been accomplished and the work can continue.
Respondent in professional services
“We measure all sorts of things related to innovation – usually the act of trying to measure it goes a longer way than just spending [money and] measuring nothing. We have created an innovation value dashboard that continually tracks value delivered – this is based on answering 50 tailored questions. We are in the process of benchmarking 200 clients on this dashboard to see who the leaders and laggards are.”