How to Develop Innovation KPIs in an Execution-Oriented Company

Abstract

Numerous established companies look for ways to rejuvenate their innovation capabilities, as it is essential for their long-term survival. One way is through the development of key performance indicators (KPIs) to measure innovation success. However, the wrong performance measurement approach can hinder innovation efforts. This case study explores the steps and challenges associated with the development of innovation KPIs in an established execution-oriented manufacturing company. Three prerequisites are proposed for such a project in a similar context: 1) a minimal maturity level of innovation processes, 2) strategic alignment, and 3) commitment to innovation. It is also proposed that, in such an execution-oriented company, it might be more effective to start with KPIs that would encourage behaviours more favourable to innovation. Then, with stronger innovation capabilities, it will be easier to develop appropriate KPIs to measure the success of innovation endeavours.