July 09, 2010 | Business Standard

Shyamal Majumdar: Measuring innovation

Without well-laid-out performance metrics, the idea of an innovative mindset can be just another fuzzy concept
How do you measure a company’s innovation mindset? Ask the Tata group.
The Tata Quality Management Services (TQMS), in alliance with Julian Birkinshaw, professor of strategic and international management at the London Business School and world-renowned innovation expert, has developed a tool called Innometer that helps companies manage innovation and its complexities.
The Innometer assesses the “innovation process” and “innovation culture” of companies, and helps design interventions. The Tata Group Innovation Forum (TGIF) is using the Innometer to encourage innovation in Tata companies, first, by enabling a company to compare its innovation propensity to domestic, sectoral or global benchmarks, and second, by developing a sense of urgency among employees to improve the processes that support innovation. In essence, the Innometer helps a company think and strategise its innovation initiatives.
The entire concept is based on Prof Birkinshaw’s Innovation Value Chain. The aim is to generate ideas from various sources: from within a particular team; from other teams across the company; from customers, end users, competitors, related industries, etc. The list of new ideas is then screened and categorised to determine the degree of technical difficulty to develop in terms of engineering time and resources versus the commercial return on developing such a product or a new feature. It’s possible that the new idea will not bring the company or business unit direct commercial success but will help it maintain the products’ competitiveness.
The benefits of Innometer and the move to drill down innovation to every person on every shop floor have been tremendous for the Tata group, most of which have been well chronicled.

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