How innovation really works according to an HBR study–it’s a science

Innovation is tough to measure–but not when you have 3.5 million employees across 154 companies from which to draw conclusions.  Information was gathered using an idea management system called Spigit:

Once you put innovation into a system like this, you can track everything. We know how many innovation challenges the companies are running, how many people are suggesting ideas, and how many ideas they suggest. We know how many people are participating in other ways – by voting or making comments, for example. And we also know how many of those ideas get through the endpoint of the challenge, which is where the company’s management determines which ideas to pursue further. We used linear regression to analyze every potential measure the system includes over every 3-month time period when the system was active within the company.

What did the researchers learn?

But what we learned from our analysis of all this data is that innovation is, indeed, a science. And surprisingly, the variables that make for a successful innovation program are independent of whether the company is seeking disruptive or incremental innovations. It doesn’t matter whether they’re asking for process or product innovation, what industry the company is in, or even, for the most part, whether the company is large or small.

The key variable that we identified across all the companies in our analysis is the ideation rate, which we define as the number of ideas approved by management divided by the total number of active users in the system. Higher ideation rates are correlated with growth and net income, most likely because companies with an innovation culture not only generate better ideas, but are organized and managed to act on them.

Here is a different perspective on how to measure innovation:

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