There are a lot of moving gears involved with value creation. Talent, originality, intelligence, and circumstance all play a part in the sustainable process of innovation. However, these qualities can appear abstract and elusive. Is it possible to gauge a prospective employee’s resume or curriculum vitae for any of these respective characteristics? Are there metrics in place to determine them within a company’s infrastructure? Aside from an increased return on investment (ROI) or shareholder value, how else can a company determine whether or not their innovative process is short or long-term?
One of the steps towards assessing value creation is observation and measurement. There is a plethora of different analytic and metric systems available to companies for this express purpose. Now companies can readily monitor the attendant risk factors involved with value creation, including but not limited to start-up costs, sales projections, the speed to market, and consumer response. Not only can companies make minute adjustments to a product release or service update to ensure positive value creation, these metrics can also aid in forecasting long-term success.
Here are some additional questions that should also be considered:
Are there any issues from user reports that have not been addressed?
- How substantial is the difference between the startup cost and projected revenue associated with a given project?
- In the event of unforeseen delays, what are the associated monetary risks?
- How does this further the brand of a company?
While these questions may seem obvious, they are often overlooked. Companies often hesitate to try new approaches, especially if the results are uncertain. But, in order for value creation to succeed, a fine balance of cost, profit, and return needs to be maintained. Risk is an unavoidable factor however. Despite how specific the aforementioned metrics can be in forecasting the possible success and failure of any new endeavor, sometimes going for the goal and taking the uncertainties head-on is the only course of action available. Failure is an integral part of the business process, and though this should ideally be minimized, it’s also a rite of passage.
Several notable products, works of art, and services that are now considered iconic were originally rejected or failed in their respective industries before being recognized. Herman Melville’s Moby Dick, a novel now considered a literary masterpiece and continues to be taught in English courses across the country, was originally rejected by publishers for being too drawn out and traditional. Even after its release, the novel didn’t sell well to mainstream audiences. The same thing happened to Vladimir Nabokov’s classic Lolita. Henry Ford, who was responsible for Ford vehicles and the model-assembly line, originally failed in business and went bankrupt before making his mark in history. Harland David Sanders, more popularly known as Colonel Sanders, had difficulty selling his chicken at first. These are just a few examples of how innovation wasn’t duly appreciated in its time, and looking at these respective biographies, success seems only a matter of time.
In addition to the aforementioned metrics that can be used to determine the potential risk and success of any given venture, innovation teams can also assist in mitigating the pitfalls. Some companies invest millions of dollars in forming innovation teams to handle intellectual property management and innovation governance, the latter of which includes uniform leadership and supervision.
For more information on how to implement more innovation in your business, visit Robert’s Rules of Innovation. Be sure to check back for Robert’s Rules of Innovation II, “The Art of Implementation” coming soon!
image credit: Thomas Hawk
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In his “Innovate to Thrive” and “Results Driven Innovation” Robert Brands shares the secrets of his ten rules of innovation. You will learn how to continually create and sustain the innovative concepts your business needs to stay ahead in the game. Connect with Robert on www.innovationcoach.com to learn more