Measuring open innovation

While the development of innovation metrics, in general, is still an emerging discipline, there is absolutely no clear guidance on how companies should approach them in order to measure the success of their open innovation (OI) initiatives.

Studies have shown that around 90% of a company’s innovation efforts never result in commercialized products or services.* This has led to a suspicion that innovation still seems to rely on fairly random incidents, rather than being the result of clearly defined performance measurement procedures.** Other research confirms this, pointing especially to the shortcomings of coordination and underestimation of the complexity that arises in the context of OI processes.***  However, if companies approach OI in a more organized and systematic way – e.g., through the application of new innovation metrics – they could raise their return on innovation at no or small additional costs.

Method-specific metrics or KPIs are needed in order to be able to properly assess and measure the progress and success of each of these activities.

Why do innovation departments still not have access to the right tools and metrics to enable them to successfully control and measure their OI projects?

In our experience, what seems to be a real challenge for companies is finding the relevant metrics for their OI activities and the discipline to make measurement a priority as part of a standardized process. Appropriate tools and metrics are needed that empower innovation teams to properly measure OI in order to be able to promote the best innovation ideas and solutions and turn new knowledge into successful commercialized products or services.

If our clients could raise their return on innovation by just 10%–20% through controlled and measured OI practices, this would give them a significant competitive advantage and the potential to be true game changers.

Read the full article to discover a simple and easy-to-apply framework for OI performance measurement, plus an answer to the question: what should we actually be measuring? And what are the relevant KPIs behind that framework?

* R. G. Cooper, Top oder Flop in der Produktentwicklung, 2002.
** R. Reichwald and F. Piller, Open Innovation: Kunden als Partner im Innovationsprozess, 2005.
*** S. Hagenhoff, „Innovationsmanagement für Kooperationen. Eine instrumentenorientierte Betrachtung,“ Niedersächsische Staats- und Universitätsbibliothek, 2008.

The complete article was written by:

  • Marc Erkens
    Consultant, Performance Improvement Advisory, EY, Germany
  • Dr. Susanne Wosch
    Senior Manager, Performance Improvement, Advisory, EY, Germany
  • Prof. Dr. Frank Piller
    Chair Technology and Innovation Management Group, RWTH Aachen University, Germany
  • Dr. Dirk Lüttgens
    Assistant Professor Technology and Innovation Management Group, RWTH Aachen University, Germany

Read the full articlepdf912.87 kB

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