Benchmarking is an excellent way to gain feedback about your businesses’ performance. Benchmarking compares the measures such as cost, cycle time, productivity, or quality of a specific process or method to what is widely considered to be an industry standard or best practice. Essentially, benchmarking provides a snapshot of the performance of your business and helps you understand where you are in relation to a particular standard. The results should be used to inform actions for improvement.
Financial benchmarks are available for many industries through the Queensland government website at http://www.business.qld.gov.au/tools-resources-support/tools-templates/financial-benchmarking-tool/index.html
How do you know whether your investment in innovation has been worthwhile? Measuring innovation performance through the use of a handful of carefully chosen measures will help focus and ultimately increase the return on your innovation activities. Some potential innovation measures1 are shown below. Choose a manageable number that are most relevant for your business and monitor them on a regular (quarterly) basis.
Communicating business performance against measures is a powerful way to engage people in the business. Post performance against key measures in highly visible areas. Use graphics to help people quickly interpret results. Start talking about performance and set goals for the next timeframe.
- Financial resources committed to innovation
- Human resources committed to innovation
- Operating expenses
- Capital expenditure
- Number of ideas generated
- Average time from idea creation to implementation
- Percentage of ideas abandoned at each stage
- Number of suppliers and partners involved
- Revenue from products launched in the last three years
- Number of new products or services launched
- Market share growth
- Return on innovation spending
- New product/service success rate
- Number of new customers
- Customer satisfaction
- Cannibalisation of existing product sales by new products
- Brand strength (third party ratings)
- Employee satisfaction
1 Measuring Innovation 2007 – A BCG Senior Management Survey, Boston Consulting Group, 2007.