Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

INNOV CHAP 4-7 > Chapter 6: Innovation Metrics and Performance Measurement > Flashcards

Chapter 6: Innovation Metrics and Performance Measurement Flashcards

1
Q

is a key driver of organizational success, helping businesses adapt, grow, and maintain competitiveness in a dynamic market.

A

Innovation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

ensures that organizations can assess the
effectiveness of their innovation strategies, allocate resources efficiently, and improve continuously.

A

Measuring innovation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Importance of Measuring Innovation

A
  1. Alignment with Goals
  2. Resource Optimization
  3. Risk Management
  4. Improvement
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Ensures innovation initiatives are aligned with business objectives.

A

Alignment with Goals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

: Identifies which projects or processes yield the highest returns.

A

Resource Optimization

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

: Helps in recognizing early signs of potential failure.

A

Risk Management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Provides insights to refine strategies and drive better

A

Improvement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Types of innov metrics

A

Input Metrics
Output Metrics
Process Metrics
Impact Metrics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q
  • Focus on the resources dedicated to innovation.
A

Input Metrics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Input Metrics example

A

o R&D expenditure
o Number of employees involved in innovation
o Training hours for innovation teams

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q
  • Measure the results of innovation activities.
A

Output Metrics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Output Metrics example

A

o Number of new products launched
o Patent applications filed
o Revenue generated from new products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q
  • Track the effectiveness of innovation processes.
A

Process Metrics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Process Metrics Examples

A

o Time-to-market for new products
o Idea-to-implementation ratio
o Percentage of projects completed on schedule

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q
  • Assess the broader outcomes of innovation efforts.
A

Impact Metrics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Impact Metrics examples

A

o Market share increase
o Customer satisfaction scores
o Sustainability impact

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Frameworks for Innovation Measurement

A
  1. Balanced Scorecard
  2. Innovation Accounting
  3. KPI Dashboards
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Challenges in Measuring Innovation

A
  1. Intangibility
  2. Time Lag
  3. Complexity
  4. Customization
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

: Incorporates innovation into strategic goals across financial, customer, internal
processes, and learning perspectives.

A
  1. Balanced Scorecard
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

: Focuses on tracking metrics during the different phases of innovation (e.g.,
idea validation, scaling).

A
  1. Innovation Accounting
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

: Uses key performance indicators (KPIs) to visualize and track innovation
performance.

A
  1. KPI Dashboards
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

: The benefits of innovation may not be immediately visible.

A

Time Lag

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Innovation often leads to intangible outcomes, such as brand reputation or employee
morale.

A

Intangibility

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

: Measuring non-linear processes and outcomes can be difficult.

A

Complexity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

: One-size-fits-all metrics may not suit all organizations or industries.

A

Customization

26
Q

Best Practices for Innovation Performance Measurement

A
  1. Define Clear Objectives
  2. Use a Mix of Metrics
  3. Benchmarking
  4. Regular Review
  5. Engage Stakeholders
27
Q

: Continuously refine metrics based on organizational changes and market trends.

A

Define Clear Objectives

28
Q

: Combine input, output, process, and impact metrics for a comprehensive view.

A

Use a Mix of Metrics

29
Q

: Align innovation metrics with strategic business goals.

A

Regular Review

29
Q

: Compare performance against industry standards or competitors.

A

Benchmarking

30
Q

: Involve teams across departments to ensure relevance and buy-in.

A

Engage Stakeholders

31
Q

provide insights into an organization’s innovation performance.

A

Innovation metrics

32
Q

Adapting Metrics

A

 Adapt and Adopt
 Context Matters

33
Q

: Avoid blindly copying metrics. Instead, modify proven metrics to align with your
organizational goals and test their effectiveness.

A

Adapt and Adopt

34
Q

: Metrics should reflect what is important for your specific industry or organization
(e.g., government agencies or non-profits might focus less on financial metrics).

A

Context Matters

35
Q

Key Innovation Metrics (core set of tested innovation metrics)

A
  1. Output-Based Metrics
  2. Time-to-Market
  3. Customer Impact Metrics
  4. Return on Innovation Investment (ROII)
36
Q

: Measure tangible results of innovation, such as patents filed, products
launched, or services improved.

A

Output-Based Metrics

37
Q

: Evaluate the efficiency of bringing new ideas to the market.

A

Time-to-Market

38
Q

: Assess how innovations influence customer satisfaction or acquisition.

A

Customer Impact Metrics

39
Q

: Gauge the financial return generated by innovation efforts.

A

Return on Innovation Investment (ROII)

40
Q

Avoiding Bad Metrics

A

The Flawed Metric: R&D Spend as a Percentage of Revenue

41
Q

Compares revenue to R&D expenditure.

A

The Flawed Metric: R&D Spend as a Percentage of Revenue

42
Q

why The Flawed Metric flawed?

A

o It lacks predictive power for future success.
o Spending more on R&D does not necessarily result in better innovation outcomes.
o Metrics vary significantly by industry and company context.

43
Q

Building Your Metric Framework
When designing innovation metrics, consider these steps:

A
  1. Define Objectives
  2. Customize Metrics
  3. Iterate and Test
44
Q

: Understand what success looks like for your organization.

A

Define Objectives

45
Q

: Tailor metrics to align with your goals and industry needs.

A

Customize Metrics

46
Q

: Continuously refine metrics to ensure they drive the right behaviors and outcomes.

A

Iterate and Test

47
Q
  • are essential in tracking the effectiveness of innovation efforts. However, not all metrics are
    meaningful or useful. One example of a flawed metric is the market share relative to competitors, which can be
    misleading and detrimental.
A

Metrics

48
Q

helps an organization ensure that the innovation process is being nurtured at
the right stages and that it leads to meaningful results.

A

well-balanced metric system

49
Q

: Once ideas are generated, how many of them are actually selected for funding and development? A high acceptance rate (over 50%) could indicate that the bar is too low, while a low rate could point to overly stringent filters that could stifle innovation.

A

The Idea Acceptance Rate

50
Q

is essential for fostering creativity and ensuring that good ideas aren’t prematurely dismissed.

A

balanced acceptance rate

50
Q

: Not every idea will be successful. Innovation processes often involve a “kill rate,” where ideas are rejected at various stages of development. For instance, at HP, we observed a 50% kill rate between each stage of the development funnel. This means out of 10 ideas, only 1-3 would successfully make it through to the market.

A

The Idea Kill Rate

51
Q

helps maintain focus
on high-potential ideas.

A

kill rate

52
Q

Input Metrics

A

The Idea Acceptance Rate
The Idea Kill Rate

53
Q

Impact Metrics

A

o Revenue from New Products
o Quality of Patents

54
Q

One important impact metric is the percentage of revenue that comes from new products. Companies like 3M track this metric to ensure they continue developing innovative products that contribute significantly to their overall revenue. For instance, 3M’s metric focuses on products introduced in the last three years. This forces the company to constantly innovate and diversify its product lines, maintaining a competitive edge.

A

o Revenue from New Products:

55
Q

: In many high-tech organizations, patents are a key indicator of innovation.
However, rather than just counting patents, companies should focus on the quality of those
patents. The more times a patent is referenced by others, the more valuable it is in the
innovation ecosystem. This shows that the company’s innovations are foundational and
impactful.

A
56
Q

: These metric measures how much additional gross margin is generated from innovative products. Essentially, if a company develops a highly valuable product, customers will be willing to pay a premium for it, which leads to a higher margin. The higher the gross margin impact, the more successful the innovation is perceived to be in the marketplace.

A

o Gross Margin Impact from Innovation

56
Q

: At HP, we used the 70-20-10 rule to balance our innovation investments. 70% of the innovation budget was focused on core products and services, 20% on
adjacencies (new products for existing customers or existing products for new customers), and 10% on truly groundbreaking innovations (new products, markets, technologies). This balanced approach
ensures that companies don’t lose sight of both short-term needs and long-term breakthroughs.

A

Innovation Investment Balanced Model

57
Q

As an innovation leader, it's important to adapt these metrics to your own
organization. Set realistic targets for input metrics (e.g., how many ideas should be in the funnel) and measure the impact of innovation efforts. This should be done regularly—quarterly or bi-annually—and
results should be tracked to identify trends and areas for improvement.

A

Metrics in Practice

INNOV CHAP 4-7 (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions