Performance measurement of innovation

Abstract

Innovation is a main element for securing competitive advantage and creation of potential for differentiation. It can generate welfare of nations and contribute to the sustainable growth of companies. This work is searching a methodology that could be used by small and medium size companies to measure the performance of organisation and management of innovation. Four areas of performance measurement have been found to be effective as a part of the methodology: (1) Create and implement an innovation strategy. The measurement involves the effectiveness of the organization processes. (2) Establish a culture that emphasizes on communication top down of the company plan and the innovation goals. Measure the understanding and comprehension by employees. (3) Combine inhouse R&D with open sources. Meaures the intensity of using external sources. (4) Monitor and manage the innovation cycles. Incremental and radical innovation activities have to alternate in an intentional way.