Summary: "Don’t Let Financial Metrics Prematurely Stifle Innovation"

In this Harvard Business Review article, Steve Kirsner writes about measuring the progress of innovation. Previously, when new ideas were developed, measurements were in terms of “activity metrics” such as the number of prototypes created or the number of customers interviewed, that is, metrics showing how busy one has been.

But according to Kirsner, in order to innovate in an organization, those metrics need to transition to “a more defensible set of metrics demonstrating the impact and value” being created.

He likened it to building an on-ramp to a highway and using it to merge with traffic. Organizations need to be flexible and be able to change measurements along the way, with the different approaches of:

1) Deciding how metrics are collected: how the new product or service is doing as it enters the market, the software used, the party responsible for collecting data

2) Convening conversations between the innovation group, the business unit leaders taking it to market, and the C-suite

The keys to keeping a happy balance between the C-suite and innovators: establish trust, create a metrics “on-ramp,” apply increasingly more business-oriented metrics as a new concept matures, and support the organization’s ability to test new ideas and grow.

Read more about how financial metrics shouldn’t stifle innovation.