Key Performance Indicators for Innovation

There are 3 Key Performance Indicators for Innovation |
The 3 KPIs for Innovation
You are probably measuring your innovation teams in the wrong way.
By Art Markman Professor of psychology and marketing, University of Texas
CREDIT: Getty Images
Part of the problem with innovating is that it is hard to measure your success. Many groups will work
There are 3 Key Performance Indicators for Innovation |
for a long time struggling to develop new ideas, re ne them, and measure their likely success. For a
long time, the team may feel as though it has not accomplished anything tangible. Indeed, from the
standpoint of nished products, it is often di cult to tell the difference between a group that is
appropriately focused on innovation and one that is just loa ng.
That is why it can be hard to track the progress of innovation teams.
Rather than trying to measure the success of innovative outcomes, though, it is crucial to focus
instead on whether the process being engaged. If teams working on innovation are doing the right
kinds of activities, then it is important to trust that results will follow.
What is the group learning?
Innovation teams are trying to do something that has not been done before. That typically requires
drawing knowledge from one area of expertise to another. In order for innovators to do that
successfully, they must be expanding their base of knowledge continuously.
That means that it is important to evaluate teams on what new knowledge they are acquiring. How
many articles from scienti c journals have they read? How many books have they explored? How
often have they engaged in conversations with other members of the company or outside subject
matter experts to learn new things?
It is also important for the group's learning to be focused both on what is known about the problem
being solved as well as on other areas that are not obviously related to the problem on the surface.
Many innovative problems are solved by analogy, and so it is not always obvious where the key insight
is going to come from.
There are 3 Key Performance Indicators for Innovation |
In this vein, it is valuable to make sure that the group members diverge in their expertise. The more
different branches of knowledge that team members develop, the more likely they are to nd valuable
nuggets that can provide new perspective on the problem.
Groups that continue to learn continue to be inspired by the new things they encounter.
How many ideas are being considered?
Studies of creativity make clear that quantity and quality are highly related in creative pursuits. The
groups that come up with the best ideas tend to come up with the most ideas.
That means that you may not be able to evaluate whether any particular idea a group is working with
is on the road to success, but you can assess how many ideas are being considered overall. Groups
should report the ideas they are considering, even the half-baked ones that seem like non-starters. It is
valuable to know that innovation teams are exploring the space of ideas as widely as possible.
To that end, when evaluating the ideas a team has developed, it can be useful to explore how diverse
the ideas are. That is, when you look at those ideas, do they all seem to be variations on a common
theme, or do they seem like distinct solutions to the problem. When a team is truly looking at the
entire space of ideas, then the concepts they have examined should be distinct rather than clustering
around a particular potential solution.
Is the market being evaluated?
Often, instructions for developing innovative ideas tell teams to ignore the constraints on the problem
at rst. And it certainly can be valuable to consider a few off-the-wall suggestions when working on a
At the same time, quite a bit of research suggests that the most creative ideas emerge as a result of
the constraints on the problem. Human memory tends to gravitate back toward tried-and-true
solutions to problems. Adding core constraints to the statement of the problem actually enhances
creativity rather than hindering it.
A key source of the most important constraints on innovation problems comes from the market. What
is the maximum price that people or rms are willing to pay for a particular solution? Are there types
of solutions that people will not be comfortable with? What is the time frame for launching an
The answers to these questions often provide hard limitations on what viable options can be
considered. In this way, teams are forced to nd ways to adapt the ideas they generate to the realities
of the world and marketplace.
There are 3 Key Performance Indicators for Innovation |
To that end, a key element of innovation is doing regular evaluations of the market for the group's
products and services, understanding customers' expectations and budgets, and keeping current with
technical developments from other rms. In addition, groups should test new ideas against the market
early on to get a sense of whether those ideas have any chance of succeeding if they are pushed
forward in the development process.
Ultimately, teams that engage in these types of behaviors regularly are doing what is required to be
successful at launching successful new ventures. Firms need to get in the habit of evaluating the
process of innovation rather than its outcomes.
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Watch How Levi's Makes Perfectly Distressed Denim
in 90 Seconds
The 165-year-old clothing manufacturer shows off F.L.X., a platform that uses lasers to
replicate vintage denim, in this 360-degree tour of their Eureka Lab.
By Kevin J. Ryan Staff writer, Inc.
There are 3 Key Performance Indicators for Innovation |
| 2:58
Inside Levi's Innovation Lab
It's no secret that the broken-in look on a pair of blue jeans rarely comes from actually wearing them.
Walk into any clothing store and you'll have your pick of styles with fade patterns and maybe even a
few fashionable rips.
For decades brands typically have achieved that sought-after look by treating the denim by hand, using
large amounts of chemicals. But recently the Eureka Lab, Levi Strauss's innovation center in San
Francisco, has developed a new method of making jeans that relies less on manual labor and more on
some advanced technology.
The F.L.X. Project, a digital platform Levi's launched last year, entails photographing old jeans with an
iPad, then using a laser to duplicate the imperfections on a freshly manufactured pair. Whereas
creating wear patterns by hand takes 20 to 30 minutes per pair, the laser rig completes the task in
about 90 seconds.
In its lab, Levi's has jeans dating back nearly a century that can serve as inspiration for new creations,
providing virtually limitless customization options. The lab also can make near-clones of the original
version, down to its wear patterns, fade lines, and tears.
There are 3 Key Performance Indicators for Innovation |
"[It] nearly exactly replicates the vintage jean that inspired it," says Bart Sights, the lab's head of
technical innovation.
Inc. visited the Eureka Lab to watch the new process in action. Check out the 360-degree video above
to see how a tablet and a laser can create pants that look like they're from the 1930s in less than two
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