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How HR can measure innovation (and innovate itself)

HRM examines how to track and measure the fuzzy concept of innovation.

Innovation is a seemingly concrete term that’s a tonal shift away from being meaningless. Your smartphone receives the benefits of innovation with every update. On the other hand we’ve all met that manager who calls himself an “innovator” but whose claim to creativity rests on their ability to find new ways to describe what everybody else labels “his day job”.

The antidote to this fuzziness is measurement. According to innovation psychologist and CEO of Inventium, Dr Amantha Imber, there are four things you should be tracking.

1. Output

This is the most obvious, and covers whatever your innovation efforts are returning in terms of value. These might be:

  • revenue or profits from new products or ideas
  • efficiency outputs, such as how many work hours a new idea or product saves
  • intangible outputs, such as brand awareness.

As a specific example, Imber talks about the innovation of a major food manufacturer. Their main metric for success was the percentage of revenue that was driven by products that didn’t exist 12 months ago.

The problem that a lot of companies have if they are measuring innovation is they’re just measuring output, says Imber. So if you see an improvement or decline in your numbers you can’t actually tell why, and so can’t bolster or reverse the trend.

Another mistake companies make is limiting their focus.

Returning to the example of the food manufacturer, by only measuring revenue they restricted their thoughts to product innovation. This ignores ervice innovation, for instance. (Making a great product is one thing but improving the process of getting it in front of consumers is equally as important). Imber recommends everyone broaden their definition of innovation to “change that adds value”.

2. Input

To get actionable information about your output, you need to measure input. A lot of factors contribute to innovation but some examples include:

  • number of people trained in innovation skills
  • amount of time people have dedicated to working on innovation projects

You can also measure what kinds of training are more effective. Is having on-the-job mentoring resulting in better output, or is your e-learning program more effective?

“Things can get a little more complicated because the relationship between inputs and outputs is generally not a linear one,” says Imber. “So there are a couple of variables we recommend that companies measure which either strengthen or weaken the relationship”.

3. Process

The first of those variables to measure is process. This is a higher-level view than inputs, and focuses on the journey from identifying where you want to innovate, to actually innovating. You’re not tracking the time spent by an individual, so much as tracking the project on an organisational basis.

“If you decrease the days between deciding what you’re going to focus on through to getting that out to market, that’s going to dramatically improve the relationship between input and output,” says Imber.

4. Culture

Like process, if you have an innovative culture the relationship between inputs and outputs becomes more linear. Now culture might appear difficult to track, as all culture is, but well-run surveys can give you solid information.

“An organisation where innovation is thriving can be one where employees feel comfortable taking risks, or where debates about new ideas or ways of thinking are encouraged,” says Imber.

The depth of your analytics

Considering the breadth of things you should be tracking, you might think that you require a sophisticated system of digital analytics. Something that can monitor each employee’s time as well as the progress of a project. But this isn’t the case.

“It’s about knowing all the projects in your innovation pipeline,” says Imber.

“It’s very simple to track which stage of the process they’re currently at. A lot of our clients put up big visual boards of their main projects. That can make it very clear how slow or fast things are tracking.”

Don’t forget HR can innovate too

HR will frequently be called upon to help track innovation but they mustn’t forget they can innovate themselves.

“If you’re only seeing innovation as products, you’re probably missing some really interesting opportunities,” says Imber. “Often HR professionals can forget that they can produce huge breakthrough innovations that have a dramatic impact on employee experience or attracting great talent.”

She references a company that introduced a virtual reality component to their graduate recruitment program. It helped attract top notch candidates in the fierce war for talent surrounding digital graduates.

Of course, HR innovation needn’t be something as technically minded as VR. Innovation is something that can be applied at a more individual level. At AHRI’s National Convention this year, Imber will be talking about how to innovate your work day – looking at what the latest science says about how you can design it to be as rewarding as possible without having to work longer hours.

Get new ideas on HR innovation from Amantha Imber and other speakers at the AHRI National Convention and Exhibition in Melbourne from Tuesday 28 to Thursday 30 August. Early bird registration closes Thursday 31 May.

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