It’s time to count

Let’s talk about innovation. Everybody loves innovation (it’s even more popular than the Macarena in the 90s).  A clever Wall St. Journal article counted 255 books published in the last 90 days alone with “innovation” in the title.  The word was used 33,528 times in quarterly and annual reports last year.[1]  So here’s a question for the Fortune 500 – how accurate are your innovation efforts? How often do you succeed or fail?  What’s your success rate?  You might be surprised by how many of the world’s topmost companies have no idea.  There may be some oddball exceptions, but as a rule… nobody knows.

I’ll take it further.  What about top tier consultants?  They’re the gurus, right?  Do they know how accurate their multi-million dollar innovation advice is?  Probably not.  Professors?  Authors on stage giving innovation keynotes? Nope, not them either.

Let it sink in: innovation “experts” don’t, as a general rule, have any idea how accurate their prognostications are.  Sure, they may have some well chosen case studies to back them up, but anyone looks good when they get to pick and choose their own evidence. Reality isn’t nearly as tidy.

I’m willing to stand corrected should I meet folks who actually count their accuracy, but that’s about as frequent as Haley’s Comet.  So… you can feel the question bubbling… if they don’t know how accurate their theories or predictions are, how do they know they’re any good?  What makes them “experts?” How do they know their judgment is even a scintilla better than the valet who parks their car?  Anyone? Anyone? Bueller? Bueller?  Why should we listen to them?

The naked truth is, most people will take innovation advice from anyone with a better resume.  Ivey League credentials?  Sounds good.  Written a book?  Even better.  Been CEO of a huge company?  Case closed – total deference.  Like Tevye sings in Fiddler on the Roof, “and it won’t make one bit of difference if I answer right or wrong.  When you’re rich, they think you really know!”

To be fair, one of the reasons people and organizations don’t normally know their accuracy is it can seem tedious to keep track of every big innovation effort or decision. Even extremely organized companies have a hard time keeping track of their innovation bets because there’s usually so much decentralized stuff going on that nobody has any idea what’s done in the aggregate. I have some sympathy for the problem, but that’s not to say counting (yes, just counting) is impossible.  Companies count all kinds of things far more tedious and obscure than their innovation bets.

Another objection is; it’s not how many swings you take, but how many home runs you hit. In other words, accuracy doesn’t matter.  After all, in 1923 the year Babe Ruth broke the record for most home runs in the season (and broke the highest batting average record, and won the World Series) he also struck out more times than any other player in Major League Baseball.  While there’s a kernel of truth in this defense, it’s not always a given. Not everything is baseball (unless you’re a Red Sox fan).  How comfortable would you feel if your doctor said “I needlessly kill waaay more patients than any other doctor who does this, but hey, when I get it right I really nail it.”

My point is this: why harbor such disdain for keeping track?  What’s the insult in counting?  If you don’t know how accurate you or your organization’s innovation processes are, how can you know if you’re getting better or worse year to year? You may feel as if you’re improving, but how can you really know? Sometimes business can feel a little like baseball but, in reality, innovation isn’t a game. There isn’t anything fun about shutting down failed projects, demoralizing people who worked their guts out for you, laying them off, watching them lose their homes. Unlike baseball, business holds the well-being of too many communities in its palm.  All I’m asking is that we keep score. What’s the fuss?

So let’s stop talking about innovation and let’s start counting.  Let’s start judging experts, companies and innovation efforts not by their glitzy veneers but by the quantifiable accuracy of their results. What’s the batting average? Let’s start treating innovation a little more like science and a little less like art.  As H. James Harrington likes to say, “if you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.” Sure, innovation can be subtle and serendipitous. I’m not advocating unduly oppressive “controls” – but are we really content wandering forward, blind and contemptuous of examining our effectiveness?  We have to start somewhere. Innovation is too important. I say, it’s time for more of us to start counting.

[1] Kwoh, You Call That Innovation? Companies Love to Say They Innovate,but the Term Has Begun to Lose Meaning, The Wall Street Journal (May 23, 2012)

This Post Has 12 Comments

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  2. James E.

    great post. I think a lot of people in companies are afraid that exposing their “accuracy” as you put it, wouldn’t be too flattering. I think it would be a good thing though because as you said how can they know if they’re doing a good job? a lot of times you see people talk about success rates but those are usually general and not specific so it’s hard to know who to believe. appreciate the article!

  3. Amy

    Way to rock the 80s and 90s references 🙂
    This post really measures up, yuk, yuk, yuk. Enjoyed it

  4. Jacek

    Assuming that you will count, how you want to proof that your result is proper and accurate?

  5. Rajesh

    Not sure I followed the message here. Should we put some boundaries to innovation?. It’s related to creativity. I think this needs a relaxed environment where ideas can fly , people should have freedom to break the rules and apply it freely.

  6. Toby

    Nice post Thomas, as always. What factors should be measured to keep track of innovation? Corporations keep track effectively of the patents they secure and the products they launch – what else should they be doing?

  7. Eric

    Having been in the position of leading innovation and being accountable for overall business results (P&L), the most critical measurements are growth in income and sales driven by your innovation efforts.

    There are a lot of other things that can be measured when it comes to innovation, and the measurement of those tends to be most critical when you are trying to effect a change in culture or process in your organization. For example, if your group is too internally focused, then start tracking metrics around driving revenue off of external partnerships (and reward that behavior). If there aren’t enough ideas flowing in, then track the flow of ideas. If there aren’t enough ideas outside your core market, then track new ideas in new market segments, etc…

    However it can be dangerous to go down the path of trying to measure everything regarding innovation with the goal of somehow fine tuning and optimizing every aspect. Innovation does not work like Operations where repeatability and efficiency are king. If your desire to measure stifles one great home run idea, then the net result of the measurement efforts is negative.

    With Innovation Strategy, you are working to maximize the odds that great ideas form within your company or in its external network, and that they make it to market successfully so you can profit from it. This means channeling the efforts of highly creative people and keeping them very motivated to solve problems that have value to your customers before your competition gets there.

    These highly creative people typically aren’t motivated by tracking two dozen metrics on every aspect of their innovation process, but they can definitely be motivated to “win” in the context of your competition and increasing profits/sales/market share. There are people who love tracking lots and lots of metrics, and they are vital to have, but in your operations group (or put some of them off to the side monitoring innovation so that you can monitor trends, but keep them invisible to the actual innovators so they aren’t in the way).

    I’ll inappropriately invoke the Heisenberg Uncertainty Principle here. In many cases, you can have an outstanding innovation program or you can measure everything about it, but you can’t have both. Measure the things that need changing so you can track your progress. Measure the sales and income you are driving (since that is the only real score that counts). Motivate your people to win and incentivize them to do so. However, measure only what you need to, so that the measurement doesn’t become an end in itself that stifles creativity.

    When you are comfortable that you are “counting” what is important, and that the benefits of the “counting” are still larger than the cost of the ideas you have lost because your innovators are spending time on counting, then you have hit the right balance. Having no measurement at all is a bad thing, having an excessive level of measurement in an Innovation culture can also be a bad thing.

    Good question to pose to the forum.

  8. Phillip

    You don’t measure innovation in business, you measure results: sales, revenue, market share. Too often, when something becomes hyped as the Next Big Thing, it becomes a process to be measured, which leads to the growth of internal groups, departments, and empires, which measure themselves on things which generally have no relationship to the real outcomes of business.

    Besides, innovation is a simple process, so establishing and running it doesn’t require metrics, consultants, books, or innovation stars.

  9. Jacek

    What if you have more than one idea?
    How to decide which idea will be best investment?
    How to measure it?

  10. David

    I think the article is more about accountability then actual counting of ideas?

  11. Peter

    I agree with many of the comments made – to me the real critical issue with regard to ‘performance measurement’ is the ‘context’ in which it is used. If used in the right context then measurement can be fundamental to high performance, transformation and business success. Out of context and as Eric points out, ‘measurement for the sake of measurement’, can stifle, hinder or even become the ‘death spiral’ of an organization.

    Isn’t it strange then that such a deep and fundamental aspect to business success as ‘performance measurement’ is, rarely gets much attention when it comes to transformation or change… instead most organizations focus on short term processes or superficial changes in systems, technologies or structures rather than focusing on changing the way they measure their organization. Innovation around performance measurement itself could be the real key to success for any initiative.

  12. Phillip

    Jacek asks a good question, but there is no good answer, since “measuring” the value of innovations is prediction, and we all know how useless most predictions are. That doesn’t mean you shouldn’t try to assign a future value, but it will mostly be guesswork and politics rather than hard numbers. One way used is the “crowdsource” and have people “vote” on ideas – I don’t mention this to recommend it, just to point out one way of “measuring” the relative value of innovations.

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