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Resuming our Best of Killer Innovation Series, we hone in on six categories of essential KPIs that will help you successfully predict and keep track of crucial details that will allow you to run your organization smoothly.
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\nThis episode addresses questions from listeners on innovation KPIs. \xa0After clocking 12,000 miles in the\xa0mobile Innovators Studio, I'm back in Colorado. \xa0On the road, I talked with\xa0interesting innovators\xa0and\xa0analysts. Taking a break from interviews, I'd like to answer your questions on measuring innovation success.
\nThere are hundreds of Key Performance Indicators (KPIs) to\xa0measure innovation success. What are the right innovation KPIs to use?\xa0\xa0What KPIs will give insight into the innovation process? \xa0\xa0KPIs should be unique to your organization. \xa0Think through what KPIs will measure and how that can guide innovations and your organization.
\nKPI Building\xa0Blocks
\nI've broken innovation KPIs into categories, like building blocks. \xa0Build up the blocks to get a complete perspective on your innovation effort.
\nSix categories for Innovation KPIs:
\nIdea\xa0process /managing the idea funnel
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\n* What's done to get ideas, put them in a funnel, review, manage and analyze them?
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\n* Raw ideas
\n* Raw ideas validated
\n* Ideas prototyped
\n* Age of ideas
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\nIdea commercialization
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\n* Innovation idea brought to market.
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\n* Innovations that became a product
\n* Innovations that make a profit
\n* Are early customers willing to pay a margin premium?
\n* Innovations purchased
\n* resources in the organization aligning to make the product a reality?
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\nFinancial impact
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\n* Tough to measure \u2013 long lag from the time of investment to product launch in the market
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\n* Revenue from new innovations
\n* Profit from innovations
\n* Revenue protected by patents
\n* Revenue from patent licensing
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\nCustomer impact
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\n* Customer success compared from old products to new innovation
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\n* What has the latest product allowed customers to achieve?
\n* How many customers have shifted to new ones?
\n* Market share trend for innovation \u2013 grabbing from competitors?
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\nOrganizational impact
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\n* New products/services have an impact
\n* Can pull organization into\xa0the new category of focus
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\n* The ratio of sales from old versus new \u2013 sales ramping up for further/declining for old?
\n* The ratio of profit from old versus new
\n* Investments \u2013 Is investment shifting from old to new?
\n* Rate of return on innovation investment
\n* Has it driven\xa0brand awareness?
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\nPure Innovation KPIs
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\n* Catch-all
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\n* Staff trained for innovation
\n* Use of formal\xa0creativity tool
\n* Implementation and use of Idea Management System
\n* Structured problem-solving tools
\n* Committed resources to innovation
\n* Patents/year
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\nGuidance
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\n* Pick three to five essential KPIs from each category that work for your organization.
\n* Ensure you can measure them.