The Innovator – Measurement


Efficiency expert W. Edwards Deming says in his book Out of the Crisis that it was statistical control that opened the way to engineering innovation and without it the process was in chaos. By measuring, engineers were able to discern a direction in which to innovate. Deming called innovation "the foundation of the future."

Measuring innovation is as important as measurement in total quality management or any other area of ​​business. During the process of measuring you can find insights into your innovation process. Texas instruments studied 50 failed innovations and discovered that in every case the failed product lacked a champion. This was something that could be fixed with the process.

Measuring innovation does not produce innovation, but is an important function in order to have meaningful comparisons. It allows the company to know if what is happening is consistent with the objectives of the organization, and the financial costs and their allocation.

One of the fundamental misconceptions about innovation is that it just happens in the R & D lab and not other parts of the company, or that that it only involves a product or service. Measure innovation in shipping, public relations, employee benefits, customer relations, service delivery, packaging, advertising, security, hiring, training and skills, materials, operations, company structure, or any area of ​​your business.

Your measurement of investment in R & D tells you how you are doing compared to published information about other successful companies in your industry. For example, it's easy to find out that Intel made an R & D investment of $ 8.4 billion in 2011 and $ 6.6 billion in 2010. Volkswagen invested the most in 2013 at $ 11.4 billion. Intel has increased R & D amounts every year during their over 30-year history, even during tough years when they lost money. The intellectual courage to make this investment has helped make Intel one of the most successful companies in the world. Even so called "Third World" developing countries invest at least one percent of GDP for R & D. If your not even spending 1% of your company revenues on R & D then you know you are off the mark.

Measurement Establishes criteria, and standards by which you can gauge the performance of your company. Deming points out that purely measuring productivity does not tell how to improve it, rather, it is the analysis that tells "whether any given activity is consistent with the aim of the organization." Measurement in innovation is the raw material of this analysis.

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