2. Relevance of Innovation Process Model to Metric Choice
Often stakeholders in the innovation process — R&D management, financial management, and corporate officers — need to utilize metrics which supply specific decision support information about corporate capabilities in innovation. These metrics are overall, or outcome metrics, which provide a grade or rating of the overall result of the innovation capability of the corporation or business in question. Such metrics might relate to value creation by the process, effectiveness of the overall process in terms of new product revenue or profit versus total R&D investment, or the ratio of new product revenue or profit to total company or business revenue or profit. Recommendations for stakeholder metrics can be found elsewhere in this metric advisor.
However, these metrics are often long-term and retrospective in nature, and while they serve to evaluate the overall process as a whole (and generally, but not always, on a lagging basis), they may offer little, if any, insight into the current or future state of the corporate innovation process or its many and diverse activities. To be useful for the on-going management and evolution of corporate innovation, a diverse set of metrics must be available which offer insight into current condition and future vision state of the process and many of its constituent parts. For many such metrics to be useful, they must be not simply outcome-oriented, but process-oriented, and specifically diagnostic of discrete sub processes within the overall innovation process.
Each in-process metric must be related to a process model which ties it to the portion of the process of interest, from early idea or technology exploration through proof of concept to technology development to commercialization. The following process description is a relatively simple process model and defines the various sub-processes within that model in order to provide anchors for useful metrics within the innovation process.