Metrics and Measurements for Open Innovation and Ecosystems

Given the difficulties in developing and working with metrics and measures for open innovation and ecosystems, I have pulled together some inspiration and insights from several articles.

16 Metrics for Tracking Collaborative Innovation Performance

My good friend, Hutch Carpenter, looks into what he calls collaborative innovation, which he defines as “…activities organizations use to improve their rates of innovation and problem solving by more effectively leveraging the diverse ideas and insights of employees, customers and partners.”

Carpenter suggests that we look at metrics based on three phases; 1) sourcing, 2) decisioning and 3) acting.

On each of the phases, he puts up a template for objectives and then helps up with specific metrics. This is the objectives for the sourcing phase, which he refers to as the generation of ideas, as well as eliciting others’ insights about an idea.

Phase objectives for sourcing:

I would also encourage you to think about metrics and measurements related to the cost of doing nothing.

  • Distinct, differentiated ideas
  • Ideas matching needs of customers (incl. internal customers)
  • Ideas matching the innovation appetite of the organization
  • Capturing the cognitive diversity of participants
  • Growing the culture of innovation

Check the article for his suggested metrics for this and the other phases.

These insights from Carpenter are good at tracking the specific development of a collaborative – or open – innovation initiative so good inspiration here. One note is that the metrics suggested by Carpenter rest on two key assumptions: use of an innovation management software platform and use of campaigns to target innovation efforts.

Metrics and Open Innovation: What Should We Measure?

In one of my older posts, I suggested that we should look at some different parameters including the ones below. Hmm, I thought they were different in 2013 and that this would be fairly normal by now. We have not seen this development yet.

Organizational maturity: How well is your organization adapting to this new paradigm shift? This can be measured by the use of simple surveys among the employees and by cross-checking with external partners.

Ecosystem happiness: Your partners are important for innovation success so you need to develop metrics that track the progress within an ecosystem. Perhaps there should be an ecosystem or partner happiness index. Yes, it sounds corny, but there might be something in this idea.

Thought leadership / branding of capabilities: How others view your open innovation capabilities is critical. There is lots of experience on tracking marketing and PR efforts that can be relevant for getting a better understanding on this. A few potential metrics could be number of visits to the destination site, followers on Twitter, discussions in communities and mentions in articles.

Measuring Open Innovation – A Toolkit for Successful Innovation Teams

This report by EY provides great insights on how to view open innovation measures in the light of Input-Process-Output-Outcome. This is based on three principles:

Principle 1: Use unique metrics for each OI method

Principle 2: Consider different types of measures: Input, process, output and outcome (IPOO)

Principle 3: Think about how to utilize your OI metrics effectively

The report also suggests some good scorecard measures and provides great images for this.

How to Measure Open Innovation Value – Parts 1 & 2

In the early days of open innovation, 100% Open shared some great perspectives on open innovation and how to measure it. 6 years later, I still think they are worth checking out.

In part 1, they suggest measurements for innovation value based on innovation benefits versus innovation costs. In part 2, they suggest that open innovation value should also be looked upon through the lenses of partner satisfaction, network engagement and network diversity / quality. You can find more in the post.

The Complete Guide to Innovation Metrics

Soren Kaplan goes beyond the normal product/technology outcome as he rightfully so suggests that leaders must establish a new breed of metrics that move beyond conventional measures and that:

  • Create an organizational culture that supports and drives strategic innovation
  • Establish critical capabilities tuned to the evolving competitive business landscape
  • Evaluate innovation efforts to ensure both return on investment and support feedback loops of learning and improvement
  • Drive profitable growth
  • A Framework for Innovation Metrics

Kaplan also suggests that these three categories are to be considered for any metrics portfolio:

Return on Investment Metrics

ROI metrics address two measures: resource investments and financial returns. ROI metrics give innovation management fiscal discipline and help justify and recognize the value of strategic initiatives, programs and the overall investment in innovation.

Organizational Capability Metrics

Organizational capability metrics focus on the infrastructure and process of innovation. Capability measures provide focus for initiatives geared toward building repeatable and sustainable approaches to invention and re-invention.

Leadership Metrics

Leadership metrics address the behaviors that senior managers and leaders must exhibit to support a culture of innovation within the organization, including the support of specific growth initiatives.

Within each of these categories, there are “input metrics” and “output metrics”. Input metrics are the investments, resources and behaviors that are necessary to drive results. Output metrics represent the desired results for the metric category.

How to Measure Open Innovation

This post by WeThinq is more about idea management and crowdsourcing than open innovation (but again a question of definitions). However, it has a different and interesting take on how we can look at “results orientated” metrics. They go like this.

  • Positive branding. Is your company now seen as more innovative?
  • Increase in customer satisfaction in general or as a direct result of a new product or service.
  • Increase in financial performance. Are you now selling more products? For Non-Profits: Are you able to re-allocate your finances in a more effective way?
  • Increase in customer loyalty.
  • Reduced costs. Both time and monetary.
  • Sustainability of new projects. Are you able to implemenet the ideas from your open innovation sessions?
  • Strategic alignment. Are the ideas from open innovation sessions in line with your organisations visions and goals?
  • Increased feelings of ownership. Do participants now feel invested in the organisation? This can be tough to measure, but if you keep seeing participants again and again you are on the right track.

12 Principles for Open Innovation 2.0

In this post, Martin Curley shares some general insights on the development of innovation and his views on what open or collaborative innovation is about today. More interestingly for this post, he also proposes twelve keys for collaborative innovation. They are purpose, partner, platform, possibilities, plan, pyramid, problem, prototype, pilot, product, product service systems and process. Each of these have a short description and I think this can also be inspiring for our thoughts on metrics for open innovation.

Some end-notes

As the first of two end-notes, I would also encourage you to think about metrics and measurements related to the cost of doing nothing. I think that good work on this can help many teams better convince their executives and colleagues on the value of open innovation. This is a challenge as I write about in this post on why open innovation is a hard sell to executives.

The second end-note? Don’t overdo your work with metrics and measurements. It is easy to get lost and lose focus on getting things done.

I hope you will enjoy this compilation of inspiration and insights. Please share your own perspectives and suggestions as well.

By Stefan Lindegaard

About the author

Stefan Lindegaard is a Copenhagen-based author, speaker and strategic advisor. His focus on corporate transformation and innovation management based on leadership, the work force and organizational structures has propelled him into being a trusted source of inspiration to many large corporations, government organizations and smaller companies. He believes business today requires an open and global perspective and he has given talks and worked with companies in Europe, North America, South America, the Middle East, Africa and Asia.
In his role as a strategic advisor and coach, Stefan Lindegaard provides external perspectives and practical advice for executives and corporate transformation and innovation teams. He is a widely respected writer and he has written several books including The Open Innovation Revolution published globally. You can follow his work on LinkedIn Pulse.