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Innovation Performance Measurement: Striking the Right BalanceProduct Type: Market Research ReportPublished by: Grist Limited Published: September 2004 Product Code: R407-0009 Description Innovation is indisputably one of the most important strategic and operational levers available to managers
for creating competitive advantage, regardless of industry sector. Recent studies suggest, though, that there
remains a serious disconnect between what firms are hoping for and what they are reaping from their
investments in innovation. Conventional approaches to performance measurement, while serving
performance-driven firms well in a variety of traditional areas focusing on cost, efficiency and speed, have
as yet had little impact in the area of innovation management.
This old management adage has been fuelling the debate on innovation performance measurement for a long time. Although many management practitioners abide by the rule of thumb "that which gets measured gets done", many innovation practitioners justifiably note that innovation by its very definition is intangible and, at least in part, dependent on serendipitous occurrences in the innovation environment. Indeed, the measurement of innovation performance is currently, as it has been for many years, a highly controversial topic. For example, the continuing debate on how much of innovation can be directly and deliberately influenced spills over into the thinking on innovation performance measurement. Traditional approaches to performance measurement typically inform about 'what' has happened but do not address the 'why', leading many managers to view the innovation process as a 'black box' that defies rational managerial analysis.
Innovation performance measurement thus continues to be a problematic management challenge. The
purpose of this report is to address the most pertinent of the many questions raised by innovation
practitioners and managers today:
Table of Contents Executive summary • You can’t manage what you don’t measure • Research findings • Research methodology • Report outline Chapter 1: The case for measuring innovation performance • Importance of R&D • High failure rate • Best practice Chapter 2: Why do firms measure what they measure? • Why measure innovation performance? • Purposes of measurement Chapter 3: Nature of innovation measurement • Different approaches • Predictability of measures • Operational effectiveness • Financial performance measures • Application of measures Chapter 4: The impact of measurement schemes on performance • Quantitative and qualitative metrics • R&D and NPD measures Chapter 5: Frameworks for innovation performance measurement • Measurement procedure • Arthur D. Little’s innovation process model • Balanced scorecard framework • Lucent value creation model • Phenomenological approach to innovation • Metrics for the control of strategic alliances • European Commission/Eurostat’s Oslo Manual • EIRMA framework • Henley-Incubator innovation ecosystem framework Chapter 6: Managerial and organisational implications of innovation performance measurement • Innovation performance measurement dilemma • A new way of thinking • Managerial implications Chapter 7: Case studies • Ikanobanken (IKANO Group) • Innogy • Royal Mail • Scipher • Shell GameChanger List of figures and tables • The strategic purpose of innovation performance measurement • The purpose of measurements, their importance and the degree to which they are successful • Innovation performance measurement clusters according to the scope and nature of the measurement • Innovation performance approaches in terms of frequency of hit and return on investment; progression of approaches • Rationale, strategic roles and purpose of measurement • Input-related innovation performance indicators • Process-related innovation performance indicators • Output/outcomes-related innovation performance indicators • Arthur D. Little innovation process model • The balanced scorecard for assessing a project • Henley-Incubator innovation ecosystem framework |
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