"Innovation Accounting is a way of evaluating progress when all the metrics typically used in an established company (revenue, customers, ROI, market share) are effectively zero."
Why do so many innovation efforts fail? It's not usually from a lack of ideas or passion. It's not even from lack of resources. The reason most innovation efforts fail is our inability to see outside of our own box.
Business has rules, and one of those rules is that you need to measure success. We have a long history in business of preceisly measure things like ROI. The real problem is that none of them matter in innovation. If you measure your innovation efforts by traditional business metrics you will reliably fail, each and every time.
So how do we measure success?
We need a new kind of accounting. We need to learn innovation accounting.
"They [Kodak executives] were convinced that no one would ever want to look at their pictures on a television set."
Steve Sasson, Kodak engineer & inventor of the digital camera
There are ways to measure innovation efforts. And you should absolutely measure them! As the saying goes, you can't manage what you can't measure. But it is critical that you measure the right things that will lead you to great breakthroughs an innovations.
For example, in a standard ROI calculation you measure outputs and efficiency, but in innovation we mesaure inputs. That's because the ratio of inputs to great products is insanely low. If we told you you had to produce a thousand products to get one great one you would throw us out the door. But to get one great product you might need to go through a thousand iterations and ideas that you discard.
We can teach you the right metrics to use, and work with you on how to apply them specifically to your situation. Don't avoid innovating and creating the next disruption because you don't know how to measure how to get there. Let us help you.
Let us be your canary.