Keeping Score: The Art of ROI (Return on Innovation) Scorecards

Keeping Score: The ART of ROI
(Return on Innovation) Scorecards
Luis F. Solis, Chief Innovation Evangelist
Author of “Innovation Alchemists”
Back End of Innovation 2014
Las Vegas, Nevada
© Imaginatik plc 2014 | www.imaginatik.com
@innoalchemist
luis.solis@imaginatik.com

2 © Imaginatik plc 2014 | www.imaginatik.com 2

“70% of corporate leaders rate
Innovation as a top three
business priority; only 22% set
Innovation performance metrics”
Source: McKinsey & Co (2013) and Imaginatik Research on Innovation
Governance (2014)
3 © Imaginatik plc 2014 | www.imaginatik.com

Scorecards Rewire
The Future, Not
Just Report The
Past

Today’s Takeaways
 It’s early days
 YOU must measure (or you will be measured)
 It’s as much ART as SCIENCE
 Emphasize inputs and process…not just Outputs
 Exceed “the core”…add non-core innovation
 Be brave…you’re creating the (your) future

We ACCELERATE Innovation Results…
Our Innovation Central enterprise
software platform provides scale,
transparency, and data intelligence
for your innovation program.
Our Innovation Advisors
consulting practice provides
expertise, methods, and tangible
results for your innovation program.

…With A Revolutionary Model
To Boost Pipeline, Prototypes, Portfolio and
Participation

Speed, Scale & Intelligence in the Cloud
Front End: Insights & Ideas Back End
Analytics

To Scale The Innovation Maturity Curve

Unleashing RESULTS for Global Firms

Did You Know That
“What gets measured gets done”
“What gets measured AND rewarded gets
done well”
“YOU become what you measure”

YOU Become What You Measure

The Prize?
 Your career (CMO half-life
is now ~18 months)
 Funding of innovation
team (the $MM test)
 Meaningful non-core
revenue from innovation
priorities

Measurement Gone Bad
 Just quantitative – just total revenue
 Just front-end: # ideas
 Just basic activity: % participation
 Just pipeline size or total opportunities

Creating The Future with Scorecards
Design Principles
1. Link to total STRATEGY
2. Obsess about INPUTS
3. Clarify which OUTPUTS = innovation
4. Measure DESIRED behaviors, plus REWARD
5. Make it VISUAL and Ubiquitous

Imagine if YOUR Scorecard Measures…
Strategy
• clear “growth gaps” by business unit
• % innovations from open innovation/3rd parties
• % funding/time spent on game-changers
• % senior exec time devoted to non-core projects
• # of managers mentored in innovation by leaders
Innovative Revenue Measures
• revenues from recently introduced products/services
• revenues from new stream types
• revenues from new customer segments/markets
• revenues from differentiating/breakthrough offerings

Imagine if YOUR Scorecard Measures…
Customers
• # of co-creation projects w/ customers & value
• # of new products/services from social media
• # of customer teams helping test/refine ideas
Process Velocity
• Pace of project movement across lifecycle
• Pace of project “kills”
Employees
• # of ideas into patents
• # of experiments or prototypes in progress
• # of teams working “beyond core” projects
• # of employees trained in innovation processes

Scorecards Fuel Innovation Governance
Networks, Governing
Bodies & Roles
Steering
Funding
Innovation
Growth
Engine
Measuring
Data driven comparisons
Dashboards

Scorecard Creation Framework illustration
Value / Return
Engagement
Employees involved in
innovation initiatives
Training
Employees with creativity
training
Mentorship, advocacy
Financial Value
Revenue from products
launched in last 3 years
Market Value
Market Share growth in
markets entered in last 3 yrs
Capital invested in Innovation
initiatives
Learning / Failure Balance / Risk Mgmt
Skills / People
Openness / connectivity
Revenue from externally
licensed tech/products
Customer intimacy
Employees exposed to real
customer experience
Knowledge Mgmt
# of failed ideas being
documented and socialized
Experimentation
Prototypes and iteration
Cross-Pollination
Early stage projects with
participants from 3+ areas
Leadership
awareness and sponsorship
Decision Making/ Tolerance
Stakeholder reviews
implemented ideas has had
Pipeline Management
Ideas that move to the
implementation phase
Portfolio Management
Incremental vs.
Breakthrough initiatives
System & employees with
portfolio mgmt responsibilities
Infrastructure
Efficiency
Total cost savings from
innovation initiatives
Resources

Co-Design Your Cloud Scorecard: 3 Ways
① 6 Hour Scorecard
Workshop
② 90-Day Results
Engine Trial
③ Innovation
Governance
Reboot (end-2-
end process)

In Closing: Creating YOUR Future
 Anything can be measured – select/observe
Think INPUTS…and the RIGHT activities or
behaviors for new revenues
 Scorecards are Science (quant) and Art
(qual)
 Get there early…or it will be measured for
you
Your scorecard CREATES your future
and the firm’s

Scorecards Rewire
The Future, Not
Just Report The
Past
@innoalchemist luis.solis@imaginatik.com

Keeping Score: The Art of ROI (Return on Innovation) Scorecards

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