Speed is a more important goal than revenue
How should one measure innovation? Is it the amount of new ideas, the number of patents or economic growth that gives the best measurement of how successful an innovation process is?
Innovation operations are sooner or later affected by the same evaluation model that prevails in any organization. Often a monthly or quarterly result.
Innovation needs other measurements. With the right business rules and competent teams, one should follow the innovation activities with other parameters than revenue. Speed is one of the most important.
The pace of an innovation process is important for several reasons. The business generates its main value through lessons. Learnings about the customer and market as well as business models and technical solutions. The higher the pace, the more lessons learned and thus the higher value created.
With pace as the goal, one also forces the project to the right type of decisions. Big investments or high risks are big decisions. These are often taken by a management group, senior manager or even a board. This can mean months of delay in a project. Small investments, for example experiments against a small target group, entail little damage to the business, even in a worst case scenario. This provides the opportunity for autonomy and faster decisions by the innovation teams.
With pace as the KPI, you steer the organisation towards small, fast decisions, less risk and rapid outcome in the form of new learnings. At the same time, you avoid the projects getting stuck in the structure and politics of the big organization.