The Importance Of Innovation Metrics

Innovation Management Systems (IMS) constitute an important organizational approach in order to foster companies' capabilities to innovate systematically. One of the central elements of an IMS is the set of innovation metrics. However, due to some typical innovation characteristics such as risk, uncertainties, time required to achieve results and internal organizational constraints, define and implement adequate innovation metrics remains a very complex challenge. Starting from a literature review on innovation management and metrics, this study critically analyse how six industrial Brazilian companies, formally engaged in implementation efforts of their IMSs, have been establishing and dealing with their metrics, what are the challenges and

In a broad scope, innovation can create value though many ways: offering new products or services, exploiting new market segments, redesigning processes to improve efficiency, among others (Sawhney et al., 2006). The organizations need to systematically innovate in order to thrive, but there are many challenges to achieve this objective.

Actually, several sources of complexity are associated with the challenge of innovation, such as technological, organizational and inter-organizational (Kim & Wilemon, 2003). The constitution of an IMS aims at dealing with these difficulties. Such constitution includes setting a group of managerial elements that aim to systematize innovation efforts in the organization, making sure, at the same time, that the proposed routines are oriented to the organizational objectives. According to O’Connor et al. (2008), these elements are: strategy; people and organization; structure and processes; resources and skills; leadership and metrics. The definition of a set of metrics is at the heart of such a system (O’Connor et al., 2008; Goffin and Mitchell,

Efforts in the field of quality management or the seminal work of Kaplan & Norton (1996) are patent evidences of earlier debate. Notwithstanding, at least three key issues make the discussion on innovation metrics more complex and, in some extent, distinct from the classical questions on organizational metrics: i) the dynamic nature of innovation, which involves high levels of complexity, risk and uncertainty; ii) the diversity of competences, organizational functions and activities required in innovation development processes; iii) the time lag normally required to transform innovation efforts into final outcomes (Kerssens‐van Drongelen et al., 2000; Cruz-Cásares, Bayona-Sáez & García-Marcob, 2013).

For the purposes of this study, a set of innovation metrics aims at monitoring and controlling quantitative results of variables which influence on some innovation processes throughout the time, thus, supporting decision making (Takashina & Flores, 1996). If a specific instrument is chosen to measure certain aspect of the organization and its processes, it is necessary to formally define objective, frequency and a measuring process in order to consider this instrument a