Tech Scouting: Useful Metrics and Industry Examples



Article #10:  Useful Metrics and Industry Examples

Now that you have found and chosen the opportunities that best support your company’s innovation objectives, how do you monitor and measure success? As in any metrics program, your desired outcomes should guide what is measured along the way. While team and partner processes are important to measure, companies today are most concerned with impact on the bottom line.

For example, AstraZeneca has refocused its metrics to emphasize commercialization, i.e. how many drugs win approval to be sold. In the past, research progress was measured by the number of compounds entering development.

Similarly, Kimberly-Clark Health Care measures how many projects are actually done versus how many were evaluated. In terms of process metrics they also track the following:

  • Concept Development Support
    # (or %) of features identified by our team that are presented to the customer
    # (or %) of features identified by our team that are selected for commercialization
  • New Area Exploration
    # of go/no go decisions enabled by our team
    # of projects we place into our project bullpen for prioritization
  • Existing Project Support
    # of technical problems solved
    # of external ideas utilized to resolve issues

Other measurements used by different companies include:

  • Time to decision: How long does it take to vet specific leads—go/no go—phase by phase?
  • Time to results: How long before an approved, funded project is launched in the market?
  • Payback: When will a company see the first returns on its investment?
  • Value and impact on the business: What does a project contribute to the company portfolio, brand, IP base or future business?
  • Percent of revenues/percent of profits, short of original estimate
  • Value of externally-sourced product revenue as a percentage of total sales

Some companies set specific financial goals: Avery Dennison looks at the number of new projects identified and launched with potential annual revenues of $50-100 million. Unilever’s minimum is $100 million. Fewer bigger deals are the ultimate objective.

Next week we look at how rewards and incentives are tied to Open Innovation goals and metrics.

Further reading

Metrics discussed at Tech Scouting workshops in 2008 and 2009 – click here

This article published in conjunction with MRT’s workshop series:
Technology Scouting to Accelerate Innovation – Implementing an External Sourcing Program – check our website for the latest dates and locations of this popular seminar.

To be on the mailing list to receive these articles (along with other special updates), sign up here.

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