Sustainable Innovation Metrics

Of the 10 imperatives of Robert’s Rules of Innovation, Observe and Measure is one of the most vital. Innovation is ultimately about Return on Investment. A system of metrics will objectively show your progress and success each step of the way. It’s essential to follow a course of action that produces ongoing improvement, and sustainable and repeatable innovation. Innovation is meaningless without attaching measurable goals to an initiative.

In order to have optimal measurements there are two types of indicators (metrics) you need to be aware of:

  1. Leading indicators: These types of indicators signal future events. They show you where you are heading. Leading indicators often change prior to large economic or business adjustments and, as such, can be used to predict future trends. Examples of leading indicators can be patents filed, ideas created, and development time spent.
  1. Lagging indicators: These indicators show you your rearview mirror observations. The importance of a lagging indicator is its ability to confirm that a pattern is occurring or about to occur. Examples of lagging indicators include patents granted, expenses, revenue, and inventory turnover.

The most successful innovative companies observe and measure both indicators for successful development and execution of their quarterly and annual plans. Be sure to measure the time spent in each gate, and the time spent to get to the next gate. See if you can make any innovation improvements as far as efficiency along the way. By observing both key metrics, you gain a holistic and well-rounded view of your company’s performance.

Douglas Wick, President of Positioning Systems, recommends, for every one lagging indicator, you should have two leading indicators.  “Leading indicators let you know what to expect.  They help with forecasting and predicting where your business is going and protect you against falling off the cliff.”

Based on a survey of 200 companies by Goldense Group, the following are the top five R&D metrics used by industry:

  • R&D spending as a percentage of sales
  • Total patents filed/pending/awarded/rejected
  • Total R&D head count
  • Current year percentage of sales attributable to new products released in the past year/three years/five years
  • Number of new products released

By following a set of metrics, you’ll be able to evaluate the performance of your New Product Development process and your end result. Be sure to continue to observe and measure these metrics even after the product is launched.

Addition tips:

What’s Measured, Gets Done:  Observation, measurement and tracking of new product development results are essential to optimal ROI.

What to look for: Successful Key Performance indicators (KPIs) follow the SMART criteria (s.m.a.r.t). They are…

  • Specific ‐ pertaining to the goal of the organization
  • Measurable ‐ for the organization to assess its progress
  • Achievable ‐ realistic in terms of the business environment
  • Relevant ‐ directly linking the business and metrics
  • Time-Bound ‐ placing goal achievement in a certain time frame.

For more Tips, see “Robert’s Rules of Innovation” A 10-Step Program for Corporate Survival.

Category: Innovation

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About the Author: Robert Brands

Robert F. Brands is President and Founder of, Author of "Robert's Rules of Innovation" (Wiley, March, 2010), Innovation subject expert and speaker. Brands' hands-on experience in bringing innovation to ma…

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