Last week I highlighted discrepancies in performance expectations between innovation and other core business functions. I then stressed the importance of establishing formal accountability for your company’s innovation performance. While establishing a leadership position accountable for innovation performance is a critical first step toward delivering results, Chief Innovation Officers are just window dressing without meaningful business goals.
Other business functions are tracked against key performance metrics, why should innovation be any different? One theory is that many innovation strategies consist of throwing around the term “innovation” as much as possible in an effort to obfuscate the absence of a credible growth strategy. In 2012, a Wall Street Journal review of quarterly and annual reports submitted to the Securities and Exchange Commission cited the word “innovation” over 33,500 times. Yet, the previously cited Capgemini study from the same year found only 42 percent of large companies even claim to have an innovation strategy in place. Unfortunately, simply mentioning “innovation” in an annual report is not enough. Investors are looking for regular updates on the performance product development pipeline and other key drivers of growth.
One thing we can be certain of, if you don’t have a clear definition of “innovation,” you cannot even begin to measure it. Aligning on the scope, definition and categories of innovation in your company is the first step in defining a comprehensive strategy for delivering growth. Let’s do the hard work of innovation instead of just blathering on about it in annual reports.