MetricsSimple definition: Metrics are a set of measurements that quantify results. Metrics are used to establish benchmarks, make comparisons, and evaluate performance.

For our purposes: Metrics quantify innovation unit performance, project team performance, financial performance of products, and evaluate success of product performance against organizational goals.

Source: Management section of About.com. Available from http://management.about.com/cs/ generalmanagement/g/metrics.htm.

Metrics

1. Process Metrics - Measured against expected performance with the formal innovation process

2. Project Metrics – Measured against expectations of innovation project teams

3. Business/Financial Metrics – Measured against the expectations of the business unit in supporting innovation and new product development

4. Decision Metrics – Measured against the strategic plan and goals of the organization

(Cooper, 2011; Crawford and DiBenedetto, 2010)

MetricsType of Performance Metric & Benchmarks

Example of Metrics Measurement Plan & Reported By

Process Metrics •Number of ideas generated•Number of ideation events•Average days to complete each Phase•Number of ideas killed by Phase•Number of projects approved to move to Phase 3•Process Manager Quarterly Report on Phases and Gates Meetings.•Others?

Reported by Process Manager

Project Metrics •VOC research / Customer visits conducted /qualitative and quantitative data•Quality and completeness of project plan•Project plan accuracy in comparison to final scope, budget, schedule•Quality of Deliverables•Forecasts in Comparison to actual data•Accuracy and completeness of market data/research•Average days to complete a project•Was the product/service launched on schedule•Success of project in terms of percentage of target market captured by new product after 6 months and 12 months•Total work hours to complete project. Total cost of resourcing project.•Program Return Map with Breakeven Point•Others?

Reported by Project/ Program Managers

Reported on project completion and annually

MetricsType of Performance Metric & Benchmarks

Example of Metrics Measurement Plan & Reported By

Business /Financial Metrics Did we meet profit objectives – ROI, IRR, Breakeven Point for each productDid we meet sales goals – Number of units sold, market share for each productPercentage of annual revenue from new products/servicesPercentage of revenue from product/service improvementsCycle timeCost per unit to develop – Cost per unit to manufacture – Cost per unit to deliver to customerMarket share acquired after 12 monthPercent of repeat customers by product and/or servicePercentage of sales coming from new products and services

Reported quarterly by project manager and Innovation Officer

Decision Metrics Success ratio of successes to failuresCustomer satisfaction metricsEmployee satisfaction metricsCost of innovation in relationship to revenuePercent of repeat customers by product and/or serviceRevenue verses forecasted sales and revenueProfitability ratings by product and serviceNew product performance to budgetNumber of launches per yearNumber of successful products and services launched per yearThree year performance indicators for Innovation

Reported quarterly by Innovation Officer

Best vs Worst:

(Edgett, 2011)

Source: Performance Metric Results. Edgett et al (2011) as noted in: New Product Development: Process Benchmarks and Performance Metrics Report.

Benchmarking

• A measurement of the quality of an organization's policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers.

• The objectives of benchmarking include:– Analyzing how other organizations achieve high

performance levels– Determining what and where improvements are

needed

Source: Business Dictionary. Available from www.businessdictionary.com/definition/benchmarking.html