Saturday, July 11, 2009

Measuring innovation and design

Interesting article in the McKinsey Quarterly on innovation metrics. You can't improve what you are not measuring. In a nutshell McKinsey's research shows that companies that measure innovation are satisfied carrying this activity. It provides a useful understanding of their innovation performance although there is room for improvement, for instance, developing incentives that are aligned with metrics or communicating this information to investors. There is also this podcast + post in Killer Innovations with an introduction on how to prove the value of innovation.

Another interesting connected topic is the value of design. Does design have value? How can it be measured? Sara Beckman, my New Product Development professor at Haas, talks about it in an interview with Adaptive Path. In this presentation...

...she mentions three examples of organizations taking a stab at those questions:

  • Corporate Design Foundation. "BusinessWeek IDEA Design Award winners outperform those who didn’t win in stock performance"
  • The California College of the Arts has compiled a Design Strategy Market Index. "The index shows that for companies who invest in design and use it as part of their strategic management, on average, they’ve gained 274% of their value. This considerably beats all market averages and indexes for the same time period."
There is always subjectivity in defining what constitutes good design and what does not, but this is a good point to get the dialogue started.

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