What gets measured gets managed.

When it comes to corporate innovation, it’s easy to focus on metrics such as ideas captured by an idea challenge, the number of prototypes developed or experiments run.

But with most corporate innovation initiatives quickly degenerating into theatre, failure rates are running high (eg. 80-90% of innovation labs fail). Such failures ultimately lead to senior stakeholders withdrawing their support while intrapreneurs become increasingly dissatisfied and leave the organisation to seek out greener, more innovative pastures elsewhere.

This really hurts a company’s prospects for innovating in the long-term - something few companies can ill afford in today’s climate.

Therefore you need to focus on the right innovation KPI metric.

Corporates need to get more adept at identifying and monitoring the metrics that matter when it comes to their innovation programs if they are to avoid such pitfalls.

No Silver Bullets

Startups searching for product-market fit today do so by rapidly testing a large number of assumptions underpinning their solutions and business models - essentially the lean startup philosophy at its core. They take this approach because when we’re developing something completely new, you won’t have all the answers and the surest way to figure them out and give yourself the best chance of surviving long enough to do so is to take small bets across these assumptions.

Figuring out how to innovate at a large bureaucratic, siloed, process-oriented, steering committee leaning organisation that has little track record of exploring disruptive innovation is also fraught with uncertainty and untested assumptions.

As such, such companies can benefit from viewing the development of their innovation programs through a similar lens as startups developing something new with different approaches to innovation to see what works for them.

But a ship without a lighthouse to direct it to shore is likely to crash.

The One Metric That Matters (OMTM)

OMTM is a concept popularised by Ben Yoskovitz in his book Lean Analytics. Ben says that “it doesn’t mean that there’s only one metric you care about”. It does, however, mean that at any given time, there’s one metric you should care about above all else.

He says in order to determine your OMTM, determine what kind of company you are, what stage you’re in and who your audience is.

For a corporate innovation program, the company type is mostly redundant but the stage your innovation program is in and and to a lesser extent, the audience, matters.

The Stage

Ben breaks down the stages into attention, problem validation, solution validation, feature optimisation and business model validation.

We can map these stages to the development of a corporate innovation program which can then help us identify which metric matters most at that particular stage of our development.

What Stage Are You In?

Based on this, we can shortlist some potential OMTMs for each stage of the innovation program’s maturity or focus.

In the early stages of an innovation program, where you’re literally just focused on raising awareness and getting people to engage in innovation initiatives, then your OMTM might be the aforementioned input metrics such as ‘number of ideas’ raised or ‘percentage of workforce participated in initiative X’.

Eventually you might move into focusing on output measures such as prototypes built and experiments run.

However, like a startup making its way to product market fit, eventually you will be looking at hard metrics such as business model validation and revenue generated.

But is there a risk of focusing on a OMTM at say the Awareness or Engagement stage of an innovation program at the expense of longer term metrics that we’re working towards?

‍