Discovery can be thought of as the business concept development phase. Incubation turns the concept into a business proposal. Acceleration is the competency of scaling the emerging business as it picks up steam in the market. These three organisational competencies lay the foundation for strategic innovation and breakthrough innovation.

The plan is to learn and test as quickly as possible, at low cost, to determine if there is a case for continuing development.

Different metrics needed

To investigate alternative metrics the authors conducted case-studies in three large, international firms that are global leaders in their established fields.

They identified a number of issues:

• time horizon too short – annual evaluations are based on results – but to gain a good outcome may take longer
• focus on financial outcomes – early stage projects are about learning not sales

 

To enable the team to set a budget and attract resource, a different approach is needed that looks forward and consolidated the knowledge that has been gained.

• Market orientation – many technologically novel products fail the market test, so the benefit of
  • potential of the market – attractiveness, trends
  • existing links to the market – can uncertainty be embraced by networking
  • finding new market needs – degree of novelty
  • real benefits to the customer – significant value to customer

• Learning and future opportunities
  • Leads to other opportunities – creates chance to diversify or can be used in different settings
  • Gives opening for growth in existing business segment – can it be bundled with existing solutions
  • Leverage of core business activities – can it be embedded in the core of the firm

• Resource dedication
  • Potential for resources to be shared with external partners
  • Keeping resource allocation low in the initial stages and then increasing with greater certainty
  • Does the firm have existing in-house market and technology know-how – right competences and absorptive capacity.

 

Paavo Ritala concludes that these metrics are not a ‘silver bullet’ but are designed to be part of a more holistic and effective assessment of radical innovation projects.

Measuring radical innovation project success: typical metrics don’t work, Jimmi Normann Kristiansen, Paavo Ritala; Journal of Business Strategy ISSN: 0275-6668

Further reading

Armasu, L. (2015), “IBM beats Intel to 7nm process thanks to silicon-germanium transistors, EUV lithography”, available at: www.tomshardware.co.uk/ibm-7nm-silicon-germanium-transistors,news- 50713.html (accessed 30 August, 2017).

Christensen, C.M., Kaufman, S.P. and Shih, W.C. (2008), “Innovation killers: how financial tools destroy your capacity to do new things”, Harvard Business Review, Vol. 86 No. 1, pp. 98-105.

Griffin, A. and Page, A.L. (1993), “An interim report on measuring product development success and failure”, Journal of Product Innovation Management, Vol. 10 No. 4, pp. 291-308.