However, through the close examination of ‘attributes’ of innovation as detailed by Gamal, Salah, and Elrayyes (2011), one may conclude that innovation is mainly a creator of value, which in turn generates profit. Then it makes logical sense, to measure innovation through the value chain of creating the idea, its conversation and then finally through the diffusion stage. This enables the organization to view innovation from an end-to-end view, including from a commercial perspective. The commercial benefits are examined from the initial stage, which could be scanning for opportunities, creating knowledge, building on the information gathered, and selling the innovation. Since company success is measured by the return on investment (ROI), measuring innovation can be difficult or ineffective because ROI will be a resistance because it is focused on short-run investment. While for innovation to be successful, it requires a long-term investment from an organization (Morris, 2008).
And since cash flow and net present value, are what board members and external stakeholders use in examining the success of an organization, managers and leaders are mostly scared to invest for the long term. Since they are afraid that the investment risk is high and the organization does not have the time it takes for investment. For example, at Coca-Cola, they use stagegate as a means of measuring innovation to counter this fear according to Doug. When an individual comes up with a great idea, they do not fund the project 100 percent or give the department all the required resources. However, they release the funds gradually, in an effort not to mix the innovation with Coca Cola’s main business operations. Thus, the department gains autonomy and can concentrate on delivering without focusing on the quick win. And when the new department has made progress for a minimum of 18 months, when examined, then if the innovation can be sustainable, it is absorbed into the main business of Coca-Cola (Doug, 2014).
From my evaluation, the mentioned model can be used in measuring innovation to a certain degree. Although, an element that relates to innovation’s output is not examined. And can be derived, when quantitative questions are asked, in an attempt to determine innovation’s capacity. Starting by determining the ability to innovate in an organization i.e. can the company create, imagine and lead/ design change for the future. And in examining the mentioned, innovation xray can be used as a tool for measurement. These are measured from three perspectives, and starting with the talent. Talent is seen first since innovation is about people and their distinct abilities. For example, the exploration of the type of innovators, the numbers of innovators and the department they fit within in an organization. Also, at this stage, the organization can determine if a resource needs the training to achieve an innovative goal or an increase in the talent required. More so, the innovation work behavior is the second dimension, which is set to measure the way people react to innovation. By asking questions that relate to how employees work; are they resisting or are they proactive to an innovative engagement? Thus, this leads to the third dimension about evaluating the cooperative practices and policies that can affect innovation, which can be derived by asking the necessary questions from stakeholders. For example, are stakeholders confident with change, is the proposed change too risky and does the current organizational culture hinder innovation because of bureaucracy that employees face. The suggested matrix is mostly focused on people, and this is because they are the most affected by innovation since people are the main contributors (Como, 2012).
The mentioned questions are asked in a qualitative manner because this allows employees to respond without the fear of repercussions for the feedback they provided. When questions can be answered, the organization can re-evaluate using the set of questions over time. In the future, or after a while, the company will see improvement in the responses that are provided by the respondents. Since the organization utilizes the feedback derived in the first instance for its advantage and constant improvement of its operations. Thus, the organization can witness the growth or decrease in the organization’s level of innovation. However, this can be complicated and time-consuming when generating feedback from employees. Thus, an alternative for measuring innovation from a quantitative view can be seen during portfolio management. Since innovation can be easily measured by asking leaders to compare portfolios. And the ones with the highest ranking of 8/10 can be termed to be extremely effective innovation methods to adopt (Tom, 2012).
Reference
Doug B, (2014), Coca Cola Measuring innovation [Online] Available: https://goo.gl/2RrXZK [Accessed: July 15, 2015]
Como C. L., (2012) How to Measure Innovation [Online] Available: http://bit.ly/1MeWwmP [Accessed: July 15, 2015]
Gamal, D., Salah, T. & Elrayyes, N. (2011) How to measure organization innovativeness? An overview of innovation measurement frameworks and innovation audit/management tools [Online] Giza: Egypt Innovate. [Online] Available from: http://www.tiec.gov.eg/backend/Reports/MeasuringOrganizationInnovativeness.pdf [Accessed: July 15, 2015]
Morris, L. (2008) The innovation process and how to measure it [Online] Walnut Creek:InnovationLabs LLC. [Online] Available from: http://www.innovationlabs.com/Measuring_Innovation.pdf [Accessed: July 15, 2015]
Tom P., (2012) STRATEGY: Measure Innovation [Online] Available: https://goo.gl/3qnuzK [Accessed: July 15, 2015]