Module 8 - Innovation Metrics & Rewards

Metrics: This module will identify the specific metrics that corporations use to measure their overall results from R&D, and the frequency of their usage across industries.

Primary research, initially conducted by GGI in 1998 and repeated every two years for the past decade, investigated "Corporate R&D Metrics" in corporations in order to explore management's measurement practices at the top level of R&D. Respondents were asked to report which metrics were "in use" in their company by choosing from a list of 88 commonly used R&D metrics.

"Corporate Metrics" measure R&D as a whole, across all activities combined. Project metrics, functional metrics and others are lower level activity measures. Some corporate metrics are "pure" overall measures like, "R&D Spending as a Percentage of Sales." The other type of Corporate Metrics are "rolled-up" measures. Rolled-up measures are mathematical aggregations of lower level metrics that occur in a number of places. A good example is the averaging of time-to-market across all projects, resulting in a composite measure like "Average Time To Market."

GGI will present a rank-ordered list by frequency of usage across all Corporate Metrics. Discussion will then focus on those metrics that specifically measure innovation behaviors and innovation results. Time will be spent explaining certain metrics in detail so that attendees will know how to calculate them in a way they can be benchmarked with other corporations.

Rewards: This module will cover the subjects of incenting, recognizing, and rewarding tangible innovation. There are a variety of structures, processes, tools, and techniques that managers have at their disposal. Certain approaches are bigger picture and help to drive and foster innovative cultures and environments, but have little application at lower levels such as recognizing innovations that occur on a specific product or project. Other approaches are more tactical and operational in nature and are best applied to reward product and project innovations. These tactical approaches, when done over a long period of time will have positive cultural and environmental implications.

Does your company have a technical track and a management track? Is group innovation recognized and rewarded? How about individual innovation? What types, frequencies, and levels of recognition and reward get the most meaningful results? While the management science that addresses these questions is still far from exact and statistically correlated at this time, there are some "practice-verified" techniques that are generally believed to correlate to innovation improvement.

Primary research, conducted by GGI in 2000, researched industrial and high-tech reward and recognition techniques. Our consulting work has reinforced that these data will remain essentially unchanged during this decade.

Brad Goldense was the Subject Matter Expert for APQC's 2nd R&D Productivity Study, published in 2005. The study was focused on CXO-level strategic drivers of innovative and productive behavior in industry, and their associated measurement and reward practices. Five global best practice partners were benchmarked by 15 sponsor companies. Selected reward and recognition mechanisms will be presented.

Summary: The goal of this module is to present Summit participants with a range of useful metrics, and motivational reward and recognition mechanisms to nurture and facilitate innovation from both a top-down and bottom-up perspective.