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Quantify Our Cost of Poor Innovation

| On 01, Jan 2010

Message: 46
Posted by: TJ
Posted on: Tuesday, 5th December 2006


Hi everyone,

I'm a beliver in innovation as a way to grow our business. I don't think that any of our leadership or executive team would disagree that they are proponents also. But it's tough to get people to realize that we could probably go through this evolutionary process a little bit faster. I see other companies coming out with new products and features more quickly than we do (we're in the telecommunications area). What's the best way to convince my leadership team that we should have more structure to our innovation process? Can I do a sort of “cost of poor quality” calculation for innovation? Or is that just a waste of time?

Thanks for your insight, TJ


Message: 49
Posted by: Innovation Colorado
Posted on: Tuesday, 5th December 2006


TJ, Hello!

Your idea about a “cost of poor innovation” (akin to the “cost of poor quality”) is an interesting thought.

I do not know of any such item, but it could prove to be very interesting. 

It is fascinating to muse about. Think, for instance, of Sony vs. Apple. 

Sony was very innovative and developed the Walkman, and variations of that. Very successful …. UNTIL ….

Somewhere along the way, something happened:  innovation faded.  This allowed a company like Apple to step into Sony's territory and develop the IPod.

I wonder what Sony's “cost of poor innovation” would look like for this? (!!!!!!!!!!!!!!)

Best regards,

Innovation Colorado


Message: 51
Posted by: Michael S. Slocum
Posted on: Wednesday, 6th December 2006


The Cost of Poor Innovation (CoPI)

Some indicators that could be used to develop a composite index for CoPI:

Mind-to-market cycle-time and variation

Patents per capita

Problem solving cycle time and variation

Average innovative level of solutions and variation

Product launch success rate

Time to abort a “bad” idea

Number of secondary problems developed post-solution implementation

Solution implementation rate

Lost revenue from late launches

These are just a few that would be relevant and could be used to measure performance in the innovation space.

Michael S. Slocum


Message: 52
Posted by: Innovation Colorado
Posted on: Wednesday, 6th December 2006


Just a random thought this morning about this topic … I was looking at some of my balanced scorecard materials this morning, and it just occured to me that using a balanced scorecard approach may be better than just a pure “cost of poor innovation (cost of poor quality) approach in the innovation space.

I am blue-skying it this morning:  this approach might include the impact of innovating (or NOT innovating) on the 4 quadrants of a balanced scorecard:  1)  Financial; 2) Customer; 3) Business Process; and 4) Employe / Learning and Growing.

… your thoughts?

Best regards,

Innovation Colorado


Message: 54
Posted by: TJ
Posted on: Wednesday, 6th December 2006


Innovation Colorado,

I appreciate your comment and suggestion. In a perfect world, I think BSC would do a great job at helping to measure the cost of poor innovation. Unfortunately, my world and perfect are far from each other. I'm not sure my leadership team would care much about BSC, let alone be able to spell it. I'm being very mean, but I think you get my point…they care about dollars and sense. If I quantified the four aspects of BSC, they'd just look at it as “soft” savings. I need hard dollar savings, things that are being wasted and we can remove from our budget so we can use that money in other ways.

What kind of factors might you think could go into a COPI?

TJ


Message: 56
Posted by: Michael S. Slocum
Posted on: Wednesday, 6th December 2006


The Cost of Poor Innovation (CoPI)

Some indicators that could be used to develop a composite index for CoPI:

Mind-to-market cycle-time and variation

Patents per capita

Problem solving cycle time and variation

Average innovative level of solutions and variation

Product launch success rate

Time to abort a “bad” idea

Number of secondary problems developed post-solution implementation

Solution implementation rate

Lost revenue from late launches

These are just a few that would be relevant and could be used to measure performance in the innovation space.

Michael S. Slocum