Targets are based on metrics, and metrics for creativity should be separated into input, process, and output. Input and process metrics tell you what you are investing and what progress you are making towards the target and include such measures as:
INPUTS
- # of diverse external contacts (diversity is strongly correlated to quality of idea)
- # of internal people engaged in idea generation
- # of creative consumers engaged in co-creation
- % of time allocated to people to work on their own ideas, e.g. 3M or Google
- # of idea generation sessions
PROCESS
- # of ideas generated in brainstorm meetings (according to brainstorming theory, the more ideas you have the more likely you are to have good ones)
- # of market tests conducted
- performance of new ideas in market research
- # of patents applied for
- # of prototypes tested
There is some evidence that setting targets on both process and output metrics brings better results. I would add a note of caution to this; when the emphasis is on the process, too much focus can be on the doing and not enough on the producing. For example, I wouldn’t recommend setting a target for the number of ideas; you may have thousands of ideas, but if they are all useless you’re no further forward. Having a target for the number of ideas that are validated as consumer concepts or business cases does make sense; it’s even better if there is a qualified revenue potential associated with the target.
The output metrics should be assessed at an appropriate stage in the commercialisation journey for an innovation. It really isn’t practically possible for most companies to wait until the establishment of a successful product or service, the ideal time to assess the real quality of an idea. Indeed, in some businesses, like pharmaceuticals or aerospace, it can take so long to get there that the people responsible may have retired.
The best time to evaluate the output of creativity is at a handover point, for example from research to development. A good idea should be validated for feasibility (we can make it); desirability (customers want it); and viability (we can make money from it). A successful creative output is a business proposition that ticks all three boxes. This is the “gold standard” metric for creative output.
For example, X (formerly Google X) could evaluate creativity using the time point that projects move into prototype development. They could then set targets as the number and/or the projected $ value of initiatives that reach that point per year.
Many companies measure the percentage of current year sales arising from products launched in the previous three or five years. This is a classic “lagging metric”, one that measures history. But when it is transformed into a measure of the future, for example the prospective value of the innovation pipeline, it effectively becomes a great target to drive creativity, further back in the process; as ultimately great original ideas are needed to succeed with innovation.
In companies that organize innovation in an ambidextrous way, there needs to be a different approach for the exploitative and explorative elements. When the focus is on the core of the existing business, a company is likely to need a different approach to generating a large number of relatively small ideas. When the sights turn to the more explorative future, a small number of relatively large ideas are needed.
In the exploitative part, targets for the number of handovers would be useful, as would the number of market tests resulting in successful consumer or customer validation. For the exploratory group, a focus on the potential commercial value per individual project would carry more weight, as would a target for the proportion of projects that bring markets or technologies new to the company, or even the world.
When clear, stretching targets are in place for creative output, pretty soon it will be clear that a staged pipeline is in place, from raw ideas all the way through to validated propositions about to become development projects. This will be supported by efforts to build the appropriate climate and culture to encourage creativity.
So while it’s important to set targets on a defined output, it’s essential to put activities in place to stimulate the process, so you are more likely to come up with great ideas that become great innovations.