Three Innovation KPIs You Need to Stay Relevant

There are so many factors involved with determining a company’s success. Are they being innovative enough? Is their team of employees given praise for their accomplishments and held accountable for their failures? Is the growth strategy effective? These are all questions that managers and business owners want answers to, but often find those answers difficult to attain. The truth is, there will always be unexpected occurrences and results when dealing with a business.Trends will erupt into prominence before sinking into obscurity, retailers will rise and fall, employees will come and go. The best way for team leaders and managers to get a feel of what is going on in their operations is by utilizing Key Performance Indicators, or KPIs. KPIs come in all shapes and sizes, but too often, KPIs are purely performance based. In fact there are two categories of KPIs:

• The first category, Innovation KPIs, focus on the pace and depth of an organization’s technological commitment.

• The second category, Performance KPIs, focus more on the results occurring from direct actions taken either by management or employees.

Innovation KPIs

1. Competitor Hardware Evaluation

This KPI will help your organization stay technologically competitive within your industry.

Hardware is not the only factor in determining, nor is it the most important. It is, however, an aspect of your technological strategy that if not kept up to date will leave customers and employees questioning your priorities. A good formula for testing for out-of-date hardware is the following:

Find the average for all competitor hardware iterations. (For example, if there are 3 competitors, with the iPhone 4, 5, and 6, then the iteration average would be 5)

Next, set that value as 0 on a scale.

Finally, pick your closest competitors and place their hardware iterations on that scale. If your competitors are using the iPhone 4 and the 0-point on your scale is the iPhone 5, then they will sit at -1.

The key to keeping this KPI effective is to never let your organization fall beneath 0 on the scale. Look at your closest competitors- where do they fall? If their average is higher than 1 on the scale you’ve created, you will need to innovate faster than the competitive average to stay relevant technologically. If your close competitors fall beneath 0, then your hardware iteration should be 0 at a minimum to remain effective.

2. Internal Software Evaluation

Since different software may be most effective for different organizations, it often doesn’t make sense to compare your software to your competition’s. Instead, collect regular feedback from customers and employees to address potential flaws in your current system. Very similar to an already used customer satisfaction KPI, the internal software KPI should quantify experiences with the software and then weigh those experiences against costs.

3. Employee Education

Even with all of the right software and hardware, a change-averse team of employees can destroy your innovation strategy quickly. Utilization of new technologies is more important to the success of an organization than acquisition. While this may seem obvious, company cultures often run deep and a technophobic workforce will not survive long in the current business landscape. Take employee surveys to find their level of technological awareness and then pick a roll-out method for new hardware and software which caters to those levels. To quantify this KPI, assign high values to less tech-savvy employees, and low values to innovators. Then measure tech usage by employees in your company over time, multiplying usage by the assigned value. This serves as a good barometer on how your organization as a whole is adapting to and utilizing new technologies.

Working new technology into an organization is not easy. There are so many moving parts in place that many managers are worried about breaking their competent system by adding in new software or hardware. Without taking those risks, however, managers face the worrisome prospect of falling behind their innovative competitors, losing customers and market share. Some simple planning and the effective use of KPIs can go along way towards making a company an innovation leader.