Innovation Capabilities – Measurement, Assessment and Development

As organizations work to secure their innovativeness, they want to know whether their efforts are supporting the improvement of their innovation capabilities. The focus on outcomes and financial measures of current innovation measurement systems makes this challenging as those indicators often say little about capabilities. In addition, indicators are frequently focused at the organizational level, although often project teams are the ones ideating and developing new products. Lastly, in order to work not just for assessment, but for further improvement, measurement systems need to be made practical and context relevant. Given these challenges and the desire of organization to measure in relation to innovation capabilities, this thesis explores the implementation of a measurement system focused on innovation capabilities within teams. The research is based on a single case study of a company, where an innovation measurement system was implemented guided by a previously-developed measurement framework (MINT). The research uses an action research inspired approach and follows the Design Research Methodology (DRM) structure. It studies the current reality of the case organization in terms of innovation capabilities and introduces the innovation measurement system to support the development of this capability followed by first reflections on impact and use. The assessment revealed the common challenges related to innovation capability such as, time for innovation, feedback, continuity of initiatives and managers support. The indicator selection, MINT uses a bottom-up approach and the findings point to three approaches taken by participants towards metric selection: experimental, reflective, and certainty approach, with the first two being more successful in leading to practical indicators. Four metric uses were also identified: 1) To implement strategy by promoting a certain behaviour; 2) To diagnose and monitor trends; 3) To learn by experimenting with metric system; 4) To reflect on practice. The findings describe the relation of the selected metrics to innovation capabilities and report challenges related to the implementation of the metrics system. The main implementation challenge was the change of measurement level and group in focus. Finally, the findings talk about the dynamics between organizational levels in relation to measurement and innovation capabilities. The discussion reflects on the ways in which the implementation results are helping to create a functional innovation measurement system. For example: the measurement system focuses beyond output indicators and its use promote relevant action. The discussion also reflects on the main implications of the challenge related to change of measurement level. Specifically, it discusses the implication of the change in relation to the scope and extent of what is being measured. On the one hand, applying innovation measurement at an organizational level might influence the team level. On the other hand, it might miss how innovations are developed. The thesis suggests the need for delineating focus teams at the organizational level and reintegrating project team level perspective to the measurement system. In conclusion, the measurement system implemented seems to direct the measure and activities related to innovation capabilities, but further research is needed to fully support this. In addition, measuring project team capabilities might require a faster and easy way to conduct the measuring in which reflection is more important than metric precision while higher level teams might work with more precision and longer cycles. (Less)