A Framework for Measuring Innovation Tiffany Brunetti-Clymer Project/Program Manager Business and Economic Development

Path for Continuous Improvement Embrace, understand, and benchmark innovation DEFINE 1 IMPROVE 4 Continuous evaluation and enhancement ENGAGE Implement a process and measures to engage all staff in innovation across the business (products, processes, business model, culture) 3 Communicate with staff at all levels to encourage understanding and innovation COMMIT 2 Leverage top managers to share commitment to innovation

Embrace, understand, and benchmark innovation

Innovation is Not Just “New” Anything that is a combination of: Links to strategy (which is assumed to be innovative) New or new to us Valuable Transferred rapidly Spans all aspects of our business DEFINE 1 “ Innovation distinguishes between a leader and a follower.” Steve Jobs

Anything that is a combination of:

Links to strategy (which is assumed to be innovative)

New or new to us

Valuable

Transferred rapidly

Spans all aspects of our business

Top 50 Innovators DEFINE 1 Source: Business Week/ Boston Consulting Group “ Innovation is the central issue in economic prosperity.” Michael Porter The 2009 Survey from BCG/Business Week Product Process Business Model Customer Experience (this was part of Business Model in the past) Most companies have strengths in 1-2 areas R&D Spending Holds Steady in Slump (WSJ, 4/5/09) BCG/Business Week Top 100 Innovators, April 2009 Rank Company Strength in Innovation 1 Apple Product 2 Google Customer Experience 3 Toyota Motor Process 4 Microsoft Process 5 Nintendo Product 6 IBM Process 7 Hewlett-Packard Process 8 Research in Motion Product 9 Nokia Product 10 Wal-Mart Stores Process

The 2009 Survey from BCG/Business Week

Product

Process

Business Model

Customer Experience (this was part of Business Model in the past)

Most companies have strengths in 1-2 areas

Battelle’s Strategic Intent Operate major research laboratories dedicated to expanding the horizons of science and technology – with distinction STRATEGIC INTENT Is Expressed Through Four Hallmarks of Excellence “ To be a major force in scientific discovery and technology discovery and in the translation of knowledge into innovative applications that have significant societal and economic impact in order to be a significant benefactor for education and charitable enterprises” Translate discovery into outstanding achievement of mission-critical outcomes Realize commercial innovation through partnerships and ventures Improve our communities through significant charitable and educational contributions COMMIT 2

Operate major research laboratories dedicated to expanding the horizons of science and technology – with distinction

STRATEGIC INTENT

Innovation Extends Beyond Products Source: IBM 2006 CEO Survey A balanced approach to all 3 types provides the greatest impact. Battelle is Adopting a Framework to Measure Innovation Product Innovation Results of R&D Capture of IP Revenue realized Process Innovation Improved response to customers Process automation Innovation process Customer satisfaction Business Model Innovation Strategic partnerships Business diversification Open innovation Culture Engaged staff with a philosophy of innovation Focus on areas of leadership and impact, while maintaining other areas ENGAGE 3

Product Innovation

Results of R&D

Capture of IP

Revenue realized

Process Innovation

Improved response to customers

Process automation

Innovation process

Customer satisfaction

Business Model Innovation

Strategic partnerships

Business diversification

Open innovation

Culture

Engaged staff with a philosophy of innovation

Thoughts on Benchmarking Source: Tom Peters, author on business management practices

Metrics Development Process Broad, diverse team Brainstormed 100s of indicators/metrics Downselected to top 1-2 most meaningful lagging and leading indicators/area Existing data streams Simplistic measures Defined metrics, goals, and frequency of measurement Piloting metrics collection, reaction now Adjust weights and create “index” once data is gathered and found useful Metrics ENGAGE 3 Innovation Category Weight Product 25% Process 25% Business Model 25% Culture 25%

Broad, diverse team

Brainstormed 100s of indicators/metrics

Downselected to top 1-2 most meaningful lagging and leading indicators/area

Existing data streams

Simplistic measures

Defined metrics, goals, and frequency of measurement

Piloting metrics collection, reaction now

Innovation Indicators Metrics ENGAGE 3 Lagging Indicators Status Leading Indicators Status Product Market Share/ Margin Active Strategic Accounts Brand Recognition R&D/S&T Investments IP Portfolio Client Satisfaction Quality of Deliverables Business Model Business Diversification Commercial Exits Interlab Commerce Interlab Agreement Cycle Time Social Impact Volunteer Rate Process Commercial Proposal Process Cycle Time Rework Client Satisfaction with Support Functions Internal Satisfaction with Support Functions Culture Staff Engagement Innovation Focus of Staff Innovation Engagement Innovation Focus of Internal Communications

There are Other Factors Impacting Innovation Policies Diversity Economy Education Sustainability Social Networking IMPROVE 4

Policies

Diversity

Economy

Education

Sustainability

Social Networking

Questions? Embrace, understand, and benchmark innovation DEFINE 1 IMPROVE 4 Continuous evaluation and enhancement ENGAGE Implement a process and measures to engage all staff in innovation across the business (products, processes, business model, culture) 3 Communicate with staff at all levels to encourage understanding and innovation COMMIT 2 Leverage top managers to share commitment to innovation

Embrace, understand, and benchmark innovation