How do you measure the intangible? This is a particular struggle for innovation departments and committees launching an idea management system, who often need to come up with KPIs and metrics to explain what they’re doing and how it benefits the company. Here’s how to find the right way to measure the ROI of launching an idea management system.
Goals And Direction
Sit down with your goals and ask yourself how you’d measure success with them. In some cases, such as a non-profit looking for new fundraising ideas, this can have some clear choices; funding raised against money spent, products shipped against product development budget spent, and so on. In other cases, it may be a little more complicated (if your goal is to see where your team thinks the company should go over the next decade, for example). Some careful thought will yield KPIs most important to you, and you can nail these down before you get going.
Consider Your Audience
When measuring ideas, you tend to set the boundaries of what you see with the tools you choose. Investigate different idea management systems to see what analytics they offer. Look for a system that allows you to capture the data that matters most to your C-suite.
Remember who the audience for these metrics is. What will impress your CTO may be less interesting to your CEO. What are the KPIs that matter, for the people who matter most? Do they need hard figures, clear numbers, or percentages they can take to the board?
Input Vs. Output
You should have at least one metric that measures input. This can be, for example, the number of submissions to an idea portal as you launch a new innovation initiative. Nothing exists without something being put into it, and tracking input offers a good measure of the raw resources. You also need at least one measure of output. For example, how many of the initial ideas you received wound up moving on at each step of your process?
Notice that these don’t have to be in dollars and cents. Especially for abstract programs, such as requests for new ways to run departments like customer service, there may not be any “hard numbers” in the currency sense. Look instead for impacts; if a customer service department reduces hold times, increases customer satisfaction scores, or limits turnover, those are all signs of a successful innovation project.
Narrow Down Your KPIs to the Essentials
We’ve all had a moment, staring at a huge pile of raw data, where we wonder how we’ll ever make sense of this. The answer is through careful selection of just a handful of KPIs. It’s possible to gather data on almost anything you do, but each data point is only useful in the context in which it’s set, and in the perspective of the person viewing it. Choose a small number of metrics that you know will give you depth and breadth of data, while not offering up an unwieldy flood.
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