More on Innovation Metrics

[Kevin McFarthing] suspects the vast majority of innovation professionals would agree that measuring what you do is important. That may well be a statement of the blindingly obvious, but the debate diverges dramatically when considering what is actually done. Luis Solis of Imaginatik wrote a good post here on Innovation Excellence clearly distinguishing between input and output metrics. He would like to build on Luis’ article by adding four other considerations to the debate.

Leading and Lagging metrics
First, it’s important to distinguish between LEADING and LAGGING metrics. Lagging metrics are history, they tell you what you’ve already done. For example, the percentage of sales from new products is a lagging indicator; it’s something you can’t change. However looking at the potential value of new products in your pipeline is a leading indicator. It predicts the future and if you’re not meeting your projected targets, you should still have time to do something about it. In terms of driving performance, leading metrics are much more valuable to managers in charge of innovation. They are the areas that should align with incentives and that should drive portfolio and project management. Lagging metrics are much more relevant to reporting (see below). 

Process metrics
Secondly, PROCESS metrics can be very useful, helping you understand your progress towards meeting your goals. For example, how many of your projects are currently planned to meet their targets? By the way, this should never be too close to100%, as it shows you’re not being aggressive enough (another blog post…..). Process metrics enable you to optimize your resources by applying them to the areas in need of the most attention.

Reporting metrics
Thirdly, REPORTING metrics relate to the information that people further up the organization need to know. For example it’s difficult to get away from reporting the percentage of sales from new products because it can be useful to external analysts. Another example could be metrics based on patent applications and granted patents, as this is often interpreted as a measure of how innovative an organization may be (not by him, by the way). It’s important to understand why you measure what you do. You should always understand whether it’s input or output; leading or lagging; process; or measured because you need to report it. 

Frequency metrics
That’s where the final point comes in – the FREQUENCY of measurement. Planning, considering and collecting data all take time and effort. If you’re measuring the activity of people in fifteen-minute increments using seventeen metrics and reporting weekly, your organization will be sucking resource away from what really matters – delivering. It also won’t be a fun place to work. Remember accuracy is more important than precision in this regard. He would recommend a measurement frequency as low as you can get it without losing the real value inherent in metrics, particularly those that help you make decisions. 

Measuring things is a crucial activity in innovation, and doing it right can significantly improve your performance, just make sure you get the balance right.

Link to the original article by Kevin McFarthing:

More on Innovation Metrics


10 Steps to Creating a Talent Advantage

Creating a talent advantage begins with smart hiring. That said, it never ceases to amaze me at the number of people who are charged with hiring who possess absolutely no skill at doing so. While I rarely meet a CEO who is completely comfortable with turning the hiring process over to HR, most of them still seem to acquiesce and do exactly that…”Who should do the hiring?” is a question that more CEOs should spend time pondering. Here’s the thing; Anyone can make a hire, but not all hires are good hires. Smart leaders do more than just hire smart people – they have a smart hiring process and/or methodology. In today’s post I’ll share my philosophy on the best way to insure that you hire tier-one talent.

Put simply; talent matters. The problem is that very few people actually possess the talent to identify talent. Identifying and recruiting talent requires much more than screening a resume and having a set of standard interviewing questions to guide you. There are issues of values, vision, culture, context etc., that need to be creatively and intuitively addressed in the hiring process that often go overlooked because the wrong person is evaluating talent.

Further complicating matters, is just because someone has succeeded in the past doesn’t mean that they’ll be a success for your company. Likewise, just because someone has failed in a previous position doesn’t mean that they might not end-up being a top performer for your company. Assessing talent is in fact a talent… Adding even more complexity to the hiring process is that not all those capable of identifying talent are capable of recruiting the talent by sealing the deal…Think about it, does the person in charge of your hiring process have the experience and charisma to convince a top performer at another company to take a pay cut to work for your company?

While CEO’s can’t be in charge of recruiting, it’s important to realize that CEOs still own responsibility for the outcome – the buck always stops at the desk of the chief executive. I also believe that if HR is solely charged with the recruiting efforts for senior management and executive level positions you’ll end-up with a very weak management and leadership team. Unless your company is a large enough organization to have a Chief Talent Officer, I don’t believe recruiting is an HR function (other than for administrative positions). Rather in most instances, I believe HR should be a compliance, training and risk management function. It is HR’s function to make sure that processes are implemented and followed, but having a mid-level manager attempt to identify or recruit tier-one senior talent is a recipe for disaster. The following commentary came from Steve Ballmer, CEO of Microsoft when he was asked about his philosophy on hiring:

“I did all the hiring myself for a long time. No one joined Microsoft without my interviewing them and liking them. I made every offer, decided how much to pay them and closed the deals. I can’t do that anymore, but I still invest a significant amount of time in insuring that we’re recruiting the best people. You may have technology or a product that gives you an edge, but your people determine whether you develop the next winning technology or product.”

I tend to be similar in positioning to Steve in that I believe one of the highest and best uses of time is to make sure that we attract the best talent for our company and our client companies. I believe that C-level executives can’t afford not to keep their hands in the talent function at some level. In order to insure that you make the best hiring decisions possible, I would strongly recommend that you follow the practices listed below:

  1. Definition: Make sure that you know exactly what you are looking for, both in terms of the job description, and the profile of the individual most likely to be successful in that role. If you can’t define what you’re looking for, you shouldn’t be looking.
  • Timing: There is wisdom in the old axiom “hire slow and fire fast.” Don’t panic and end-up making a regrettable hire out of perceived desperation. Give yourself plenty of runway. You’ll be much better-off taking your time and making a good hire rather than using the ready, fire, aim methodology and end-up terming the new hire before they eclipse their probationary period.
  • ABH: Always Be Hiring…Never let your organization be put behind the talent 8-ball, as great talent is rarely available on a moment’s notice. In the world of professional sports the search for talent often starts during the middle-school years, which is long before the potential talent being tracked by the scouts has matured. Your organization should always be on the look-out for great talent whether that talent is still in graduate school, in the military, working for competitors, or working outside the industry. Some of the best hires I’ve made over the years were executives that I spent months, and in some cases, years developing relationships with.
  • Identify Your Talent Scout: Look for and identify the person within your organization that has the best nose for talent. Regardless of what position this person holds, get them involved in the process. If you don’t have a natural talent scout internally, seek outside assistance in the form of a consultant. Don’t turn your talent scout into just another corporate bottleneck, rather give them leverage by having them collaborate with outside recruiters. Outsourced recruiting is very effective and affordable if managed properly.
  • Team Based Hiring: While I’m not generally in favor of management by committee, hiring based upon a team approach works very well. In a perfect world, a hiring team would consist of your HR manager (compliance), your internal and external talent scout (the gut-check), the direct supervisor over the position being hired for (competency, capability, and compatibility) and the senior executive who is the best at selling your organization (the closer). Hiring in a team based fashion eliminates many of the typical mistakes that can be made in the hiring process.
  • Values Based Hiring: You can either spend time finding employees who share your organization’s values, or deal with the brain damage of managing conflicts that arise due to opposing values. Smart companies focus on the former and not the latter. It simply isn’t necessary to compromise on core values to get talent. A new hire should desire to be part of your company for more than the ability to maximize immediate earning potential…they should be interested in your company because there is a sincere alignment of values and vision. Trust me when I tell you that compromises in this area which seem insignificant during the interview process will become visibly and materially significant down the road.
  • Hire Leaders: I have a basic premise when it comes to hiring – most companies get exactly what they deserve. When companies complain about a lack of leadership, or how difficult it is to identify leaders, my question is simply this: Why didn’t you hire a leader to begin with? Sure, leadership can be learned, but not everyone is willing to learn, and even if they are, education takes time and has a very real cost. Let me be clear, I’m not knocking leadership development initiatives – there is no perfect leader, and all leaders need to focus on development. What I am saying is that development of an existing leader is faster, easier, and more effective than creating a leader.
  • Cultural Fit: Culture matters – forget this and all other efforts with regard to talent initiatives will be dysfunctional, if not lost altogether. Don’t allow your culture to evolve be default, create it by design. The first step in cultural design is to be very, very careful who you let through the front door. People, their traits, attitudes, and work ethic (or lack thereof) are contagions. This can be positive or negative – the choice is yours. The old saying, “talent begets talent” is true.
  • Pay for Talent: I cannot even begin to count the number of times I’ve witnessed companies pass over the right hire, or worse yet, not even look for the right hire because they let self-imposed financial constraints serve as a barrier precluding sound decisioning. I’ve actually personally observed HR managers filter better qualified candidates because they were a few thousand dollars outside the “top-end” of the salary range. It is precisely this type of thinking that will keep a company from being competitive in the market. To put it bluntly, you get what you pay for…Real talent produces real results, and is worth the investment. Always hire up where possible…find the right talent and then do what it takes to secure the services of said talent. You cannot afford not to invest in talent.
  • Constantly Upgrade: You can hire the best talent in the world, but remember that “best” is a subjective evaluation largely measured within the context of a snapshot in time. Obsolescence can take root in anyone if growth and development are not focus points. Development needs to occur at every echelon of the workforce – the top, middle, and bottom performance tiers. Top performers need to be stretched, mid-tier performers need to be challenged to up their game, and you should always look to upgrade the bottom 20% of your workforce. This can be done through training and development or via new hires. You need to ask yourself the following question: Who are the least productive members of your team? Why? Coach them to productivity or replace them – there is no third option.
  • Hiring is a blend of art and science. The reality is that those organizations that identify, recruit, deploy, develop and retain the best talent will be the companies who thrive in the market place. As always, I welcome your comments and feedback below…

    Link to full article by Mike Myatt:
    10 Steps to Creating a Talent Advantage

    Rethink Your Business Model To Beat The Incumbents

    Every startup starts off with a number of disadvantages against well-set incumbents: they are not the first-to-market, they probably have less money, they have less resources and they definitely have less of a brand (and mindshare) in the market. What startups have on their side is the freedom to innovate on business models.

    Business model innovation can come in many forms that include but not limited to:

    • Fulfilling the need differently (from CDs to iPods; from iPods to streaming).
    • Fulfilling multiple needs at one shot (embedded camera and video recorder on a smart phone).
    • Telling a story to create a need that never existed before (introduction of iPad is a classic example).
    • Collecting payment based on outcomes (pay per click, pay per action, pay per lead, pay per visit…you come up with your own).
    • Create peace of mind while fulfilling the need (hassle-free returns of goods).

    Lonk to full article by Rakesh Setty:

    Should Any Innovation Be Nationally Structured?

    Why do we still compare and contrast innovation on a National basis- innovation is global, most global innovation moves where it is best managed or delivered? All national measurements do is simply capture a given part of the activities going on within a geographical area, it complety misses the across border flows that make up the higher value points within innovation.

    Link to full article by Bob Hobcraft:

    Innova Latino Report Shows Region Leapfrogging

    Latin America faces numerous geographical and geopolitical challenges and generally suffers low rankings as a result. But this is not the whole picture; indeed, the contrast between popular conception and underlying activity only serves to make the region’s technological “leapfrogging” all the more impressive.

    Link to full article by Innovation Excellence: