It may or may not have occurred to you how important it is to measure the innovation of your own business. However, if you do not look into the efficacy and processes within your company, there is no way for you to know how well your organization is truly running, and in which areas improvement is needed. Of course, if you want to measure the innovation of your business, you will need to have a technique to use to gauge the different elements to be considered.
Traditionally, these elements have consisted of counting defects, measuring costs, and tracking cycle times. Today, as we understand businesses processes better, it has become a bit more involved but no less achievable.
With improvement strategies such as Six Sigma – a set of techniques developed by Motorola that focuses on the process of improvement within a business – there are ample measures available to recognize if your business is achieving its potential, or if it is lacking on one or many levels.
There are primarily five areas of measure for innovation, which include:
1. Performance – your company’s ability to provide a total solution in relation to its requirements and its competition
2. Quality – the number of defects and the number and rate of delay
3. Timing – its speed to the market, including its schedule for internal development (also known as cycle time) and its external market timing.
4. Finances – revenue expectations, costs, margins
5. Development costs – for specific projects
Additionally, there are a number of sub-categories for measuring innovation within your business. These include:
o Turnover of personnel
o Percentage of product and/or service tests passed
o Percentage of reuse (the number of tested items that were borrowed)
o Number of specification or requirement changes needed
o Percentage of new parts (the number of items that are untested)
o Percentage of unique parts (potential areas for difficulty in integration)
o Percentage of new vendors
o Percentage of staffed to plan (including times of over-staffing and under-staffing)
o Percentage of designated time lost to undesignated projects
As you can see, there is quite a bit to consider when you wish to measure the innovation of your business. This often explains the inclination for businesspeople to put off such measurements. However, by doing so, you are only holding back from the ideas, changes, and potential that you could be offered from the result of these measurements. The best time for you to measure the innovation your business is today.