Corporations are great at managing traditional business functions and analyzing them for any remaining scraps of waste. Manufacturing lines are expected to be statistically free of defects. Supply chain logistics and tracking are more sophisticated than ever before with data-driven forecasting and inventory management. Sales forces are measured on hitting revenue goals. Call centers are optimized by tracking call times and issue resolution rates. Finance managers scrutinize profit and loss statements, while HR tracks your sick days.
With such clear expectations and accountabilities around the performance and optimization of other business functions, why do we not set the same standard for investment in innovation? The truth is, in most Fortune 500 companies innovation is largely unmanaged and mostly unmeasured. For us to hold core business functions accountable for their performance and not expect the same from the innovation engine is unacceptable. Innovation is the last big, unmanaged business function, and those that refuse to move beyond the “pay-and-pray” approach to innovation will find it increasingly difficult to compete. Yes, the measures and expectations should be different and we must get comfortable with a high degree of uncertainty at the individual initiative level, however, project uncertainty and a tolerance for risk is not an excuse for abdicating responsibility. If large companies are to remain relevant, they need clear accountabilities and the ability to measure innovation.