Preface |
|
xix | |
Acknowledgements |
|
xxiii | |
About the Authors |
|
xxv | |
|
1 The Importance and Challenges of Innovation |
|
|
1 | (18) |
|
|
2 | (2) |
|
|
2 | (1) |
|
|
2 | (1) |
|
|
3 | (1) |
|
|
3 | (1) |
|
|
3 | (1) |
|
The Realities of Innovation |
|
|
4 | (5) |
|
|
4 | (1) |
|
Innovation is Necessary for Survival |
|
|
5 | (1) |
|
Innovation is Equated with Success |
|
|
5 | (1) |
|
Innovation is Truly Global |
|
|
6 | (1) |
|
Consumers and Investors Expect Innovation |
|
|
6 | (1) |
|
Innovation is Often Disruptive |
|
|
6 | (1) |
|
Innovation is Not a Single Event |
|
|
7 | (1) |
|
Little Ideas Often Make a Big Difference |
|
|
7 | (1) |
|
Innovation Comes in Many Types and Forms |
|
|
8 | (1) |
|
Innovation Spans Many Different Horizons |
|
|
8 | (1) |
|
Trouble in Paradise: The Misconceptions |
|
|
9 | (3) |
|
Misconception 1 Small Companies are More Innovative |
|
|
10 | (1) |
|
Misconception 2 Uncontested Markets are Good for Innovation |
|
|
10 | (1) |
|
Misconception 3 Spending More on R&D Increases Innovation |
|
|
10 | (1) |
|
Misconception 4 Companies Need More Radical Innovation |
|
|
10 | (1) |
|
Misconception 5 Open Innovation Turbocharges R&D |
|
|
11 | (1) |
|
Misconception 6 R&D Needs to be More Relevant |
|
|
11 | (1) |
|
Misconception 7 Wall Street Rewards Innovation |
|
|
11 | (1) |
|
|
12 | (5) |
|
|
12 | (1) |
|
Managing Innovation is Difficult |
|
|
13 | (1) |
|
An Innovation Culture is Necessary for Success |
|
|
13 | (1) |
|
Innovation Requires Many Personas |
|
|
14 | (2) |
|
Innovation Success Rates Need to Improve |
|
|
16 | (1) |
|
The Value of Innovation is Unclear |
|
|
16 | (1) |
|
|
17 | (2) |
|
2 Status and Concerns about Innovation Measurement |
|
|
19 | (16) |
|
Innovation: Definition, Models, and Measures |
|
|
20 | (1) |
|
|
21 | (2) |
|
|
23 | (4) |
|
Measurement Shifts are Common |
|
|
23 | (1) |
|
|
24 | (1) |
|
|
24 | (1) |
|
Hoping, Knowing, Proving, and Showing Value |
|
|
25 | (1) |
|
|
25 | (2) |
|
Macro View of Measurement |
|
|
27 | (5) |
|
|
29 | (1) |
|
|
30 | (1) |
|
Concerns about Company Level Measures |
|
|
30 | (2) |
|
Micro View of Measurement |
|
|
32 | (2) |
|
|
34 | (1) |
|
3 The Case for a New System |
|
|
35 | (24) |
|
Innovation: A Cost or an Investment? |
|
|
36 | (2) |
|
The Value of Innovation: A Summary |
|
|
38 | (3) |
|
Intangibles and the Fear of not Investing |
|
|
38 | (1) |
|
Relationship Between Variables |
|
|
39 | (2) |
|
|
41 | (1) |
|
|
41 | (4) |
|
|
41 | (1) |
|
Reaction and Planned Action |
|
|
42 | (1) |
|
|
43 | (1) |
|
Application and Implementation |
|
|
43 | (1) |
|
|
44 | (1) |
|
|
44 | (1) |
|
How Does Your Current System Stack Up? |
|
|
45 | (4) |
|
|
45 | (2) |
|
|
47 | (1) |
|
|
47 | (1) |
|
|
47 | (1) |
|
|
48 | (1) |
|
|
48 | (1) |
|
|
48 | (1) |
|
|
48 | (1) |
|
|
49 | (1) |
|
|
49 | (1) |
|
Using Design Thinking to Deliver and Measure Results |
|
|
49 | (6) |
|
Start with Why: Aligning Projects with the Business |
|
|
50 | (1) |
|
Make it Feasible: Selecting the Right Solution |
|
|
51 | (1) |
|
Expect Success: Designing for Results |
|
|
52 | (1) |
|
Make it Matter: Designing for Input, Reaction, and Learning |
|
|
52 | (1) |
|
Make it Stick: Designing for Application and Impact |
|
|
53 | (1) |
|
Make it Credible: Measuring Results and Calculating ROI |
|
|
53 | (1) |
|
Tell the Story. Communicating Results to Key Stakeholders |
|
|
54 | (1) |
|
Optimize the Results: Using Black Box Thinking to Increase Funding |
|
|
54 | (1) |
|
Requirements for the Value of Innovation: A Measurement Process |
|
|
55 | (1) |
|
ROI Measurement Methodology™ |
|
|
56 | (1) |
|
Terminology: Projects, Solutions, Participants... |
|
|
57 | (1) |
|
|
57 | (2) |
|
4 Introducing the ROI Methodology |
|
|
59 | (22) |
|
|
60 | (1) |
|
|
60 | (3) |
|
|
63 | (2) |
|
|
65 | (10) |
|
|
66 | (1) |
|
|
66 | (1) |
|
|
67 | (1) |
|
|
68 | (1) |
|
|
68 | (3) |
|
|
71 | (1) |
|
|
71 | (1) |
|
Isolating the Effects of the Project |
|
|
72 | (1) |
|
Converting Data to Monetary Values |
|
|
72 | (1) |
|
Identifying Intangible Benefits |
|
|
73 | (1) |
|
|
74 | (1) |
|
Calculating the Return on Investment |
|
|
74 | (1) |
|
|
75 | (1) |
|
Operating Standards and Philosophy |
|
|
75 | (1) |
|
Implementing and Sustaining the Process |
|
|
76 | (1) |
|
Benefits of This Approach |
|
|
76 | (5) |
|
|
77 | (1) |
|
Validating the Value Proposition |
|
|
77 | (1) |
|
|
77 | (1) |
|
Enhancing the Image and Building Respect |
|
|
78 | (1) |
|
|
78 | (1) |
|
Justifying or Enhancing Budgets |
|
|
78 | (1) |
|
Building a Partnership with Key Executives |
|
|
79 | (1) |
|
Earning a Seat at the Table |
|
|
79 | (1) |
|
|
79 | (2) |
|
5 Aligning Innovation Projects to the Organization |
|
|
81 | (26) |
|
Creating Business Alignment |
|
|
83 | (3) |
|
|
83 | (1) |
|
|
84 | (2) |
|
Determining the Potential Payoff |
|
|
86 | (4) |
|
Obvious Versus not-so-obvious Payoff |
|
|
87 | (2) |
|
|
89 | (1) |
|
The Value of an Opportunity |
|
|
90 | (1) |
|
To Forecast or not to Forecast? |
|
|
90 | (1) |
|
Determining Business Needs |
|
|
90 | (5) |
|
|
91 | (1) |
|
|
91 | (1) |
|
|
92 | (1) |
|
Tangible versus Intangible Benefits: A Better Approach |
|
|
93 | (1) |
|
|
94 | (1) |
|
Determining Performance Needs |
|
|
95 | (1) |
|
|
95 | (1) |
|
|
95 | (1) |
|
Determining Learning Needs |
|
|
96 | (1) |
|
Determining Preference Needs |
|
|
97 | (1) |
|
Case Study: Southeast Corridor Bank |
|
|
98 | (4) |
|
|
98 | (1) |
|
|
99 | (1) |
|
|
99 | (1) |
|
|
100 | (1) |
|
|
101 | (1) |
|
|
102 | (1) |
|
Developing Objectives for Innovation Projects |
|
|
102 | (4) |
|
|
102 | (1) |
|
|
103 | (1) |
|
Application and Implementation Objectives |
|
|
103 | (1) |
|
|
104 | (1) |
|
|
105 | (1) |
|
|
106 | (1) |
|
6 Collecting Data Along Chain of Impact with a Toolbox of Methods |
|
|
107 | (32) |
|
Questionnaires and Surveys |
|
|
109 | (11) |
|
Types of Questions and Statements |
|
|
109 | (1) |
|
|
110 | (1) |
|
|
111 | (2) |
|
Improving the Response Rate for Questionnaires and Surveys |
|
|
113 | (7) |
|
|
120 | (2) |
|
|
121 | (1) |
|
|
121 | (1) |
|
|
122 | (2) |
|
Applications for Evaluation |
|
|
122 | (1) |
|
|
123 | (1) |
|
|
124 | (1) |
|
Measuring with Simulation |
|
|
124 | (1) |
|
|
124 | (1) |
|
Role-Playing/Skill Practice |
|
|
125 | (1) |
|
|
125 | (3) |
|
Guidelines for Effective Observation |
|
|
125 | (2) |
|
|
127 | (1) |
|
|
128 | (6) |
|
Using Action Plans Successfully |
|
|
129 | (3) |
|
Advantages/Disadvantages of Action Plans |
|
|
132 | (1) |
|
Using Performance Contracts |
|
|
133 | (1) |
|
Monitoring Business Performance Data |
|
|
134 | (1) |
|
|
134 | (1) |
|
|
135 | (1) |
|
Selecting the Appropriate Method for Each Level |
|
|
135 | (3) |
|
|
135 | (1) |
|
Participants' Time for Data Input |
|
|
136 | (1) |
|
Manager Time for Data Input |
|
|
136 | (1) |
|
|
137 | (1) |
|
Disruption of Normal Work Activities |
|
|
137 | (1) |
|
|
137 | (1) |
|
Utility of an Additional Method |
|
|
137 | (1) |
|
Cultural Bias for Data Collection Method |
|
|
138 | (1) |
|
|
138 | (1) |
|
7 Measuring Reaction and Perceived Value |
|
|
139 | (10) |
|
Why Measure Reaction and Perceived Value? |
|
|
140 | (3) |
|
|
141 | (1) |
|
|
141 | (1) |
|
|
141 | (1) |
|
Important but not Exclusive |
|
|
142 | (1) |
|
|
143 | (2) |
|
|
143 | (1) |
|
|
143 | (1) |
|
|
143 | (1) |
|
Internal or External Customers |
|
|
144 | (1) |
|
Project Leaders and Team Members |
|
|
144 | (1) |
|
Sponsors and Senior Managers |
|
|
144 | (1) |
|
Records and Previous Studies |
|
|
144 | (1) |
|
|
145 | (1) |
|
|
146 | (1) |
|
|
146 | (1) |
|
Questionnaires and Surveys |
|
|
146 | (1) |
|
|
147 | (1) |
|
|
147 | (1) |
|
|
147 | (1) |
|
|
148 | (1) |
|
|
149 | (14) |
|
Why Measure Learning and Confidence? |
|
|
150 | (3) |
|
The Importance of Intellectual Capital |
|
|
151 | (1) |
|
The Learning Organization |
|
|
152 | (1) |
|
|
152 | (1) |
|
The Use and Development of Competencies |
|
|
152 | (1) |
|
The Role of Learning in Innovation Projects |
|
|
153 | (1) |
|
The Challenges and Benefits of Measuring Learning |
|
|
153 | (2) |
|
|
154 | (1) |
|
The Benefits of Measuring Learning |
|
|
154 | (1) |
|
|
155 | (2) |
|
|
155 | (1) |
|
|
155 | (1) |
|
|
156 | (1) |
|
|
157 | (3) |
|
Questionnaires and Surveys |
|
|
157 | (1) |
|
|
157 | (1) |
|
Technology and Task Simulations |
|
|
158 | (1) |
|
|
159 | (1) |
|
Role-Playing and Skill Practice |
|
|
159 | (1) |
|
|
159 | (1) |
|
|
160 | (2) |
|
|
160 | (1) |
|
|
161 | (1) |
|
|
161 | (1) |
|
|
161 | (1) |
|
|
162 | (1) |
|
|
162 | (1) |
|
9 Measuring Application and Implementation |
|
|
163 | (14) |
|
Why Measure Application and Implementation? |
|
|
165 | (2) |
|
|
165 | (1) |
|
|
166 | (1) |
|
Problems and Opportunities |
|
|
166 | (1) |
|
|
167 | (1) |
|
|
167 | (2) |
|
|
168 | (1) |
|
Building Data Collection into the Project |
|
|
168 | (1) |
|
Ensuring a Sufficient Amount of Data |
|
|
168 | (1) |
|
Addressing Application Needs at the Outset |
|
|
169 | (1) |
|
|
169 | (2) |
|
|
169 | (1) |
|
|
170 | (1) |
|
|
170 | (1) |
|
|
170 | (1) |
|
|
170 | (1) |
|
|
171 | (1) |
|
|
171 | (3) |
|
Using Questionnaires to Measure Application and Implementation |
|
|
172 | (1) |
|
Using Interviews, Focus Groups, and Observation |
|
|
172 | (1) |
|
|
172 | (2) |
|
|
174 | (1) |
|
|
174 | (1) |
|
|
175 | (2) |
|
|
177 | (16) |
|
Why Measure Business Impact? |
|
|
178 | (2) |
|
|
178 | (1) |
|
A Business Driver for Projects |
|
|
179 | (1) |
|
|
179 | (1) |
|
|
180 | (1) |
|
Collecting Effective Impact Measures |
|
|
180 | (3) |
|
|
180 | (1) |
|
|
181 | (1) |
|
Identifying Specific Measures Linked to Projects |
|
|
182 | (1) |
|
Business Performance Data Monitoring |
|
|
183 | (2) |
|
Identify Appropriate Measures |
|
|
184 | (1) |
|
Convert Current Measures to Usable Ones |
|
|
184 | (1) |
|
|
184 | (1) |
|
|
185 | (5) |
|
Using Action Plans to Develop Business Impact Data |
|
|
185 | (2) |
|
Using Performance Contracts to Measure Business Impact |
|
|
187 | (2) |
|
Using Questionnaires to Collect Business Impact Measures |
|
|
189 | (1) |
|
Measuring the Hard to Measure |
|
|
190 | (2) |
|
Everything Can Be Measured |
|
|
190 | (1) |
|
Perceptions are Important |
|
|
191 | (1) |
|
Every Measure Can Be Converted to Money, but not Every Measure Should Be |
|
|
191 | (1) |
|
Special Emphasis on Intangibles |
|
|
192 | (1) |
|
|
192 | (1) |
|
11 Isolating the Effects of Innovation |
|
|
193 | (22) |
|
Why the Concern over this Issue? |
|
|
196 | (2) |
|
|
196 | (1) |
|
|
196 | (2) |
|
|
198 | (2) |
|
|
198 | (1) |
|
Identify other Factors: A First Step |
|
|
199 | (1) |
|
|
200 | (14) |
|
|
200 | (3) |
|
|
203 | (2) |
|
|
205 | (1) |
|
|
206 | (1) |
|
Participants' Estimate of Impact |
|
|
206 | (3) |
|
Managers Estimate of Impact |
|
|
209 | (1) |
|
Customer Estimates of Project Impact |
|
|
209 | (1) |
|
Internal or External Expert Estimates |
|
|
210 | (1) |
|
Estimate Credibility: The Wisdom of Crowds |
|
|
210 | (2) |
|
Calculate the Impact of other Factors |
|
|
212 | (1) |
|
|
213 | (1) |
|
|
214 | (1) |
|
12 Converting Data to Money |
|
|
215 | (26) |
|
Why Convert Data to Monetary Values? |
|
|
217 | (5) |
|
|
217 | (1) |
|
Impact is More Understandable |
|
|
217 | (1) |
|
Converting to Monetary Values is Similar to Budgeting |
|
|
218 | (1) |
|
Monetary Value is Vital to Organizational Operations |
|
|
218 | (1) |
|
Monetary Values are Necessary to Understand Problems and Cost Data |
|
|
219 | (1) |
|
Key Steps in Converting Data to Money |
|
|
219 | (3) |
|
|
222 | (7) |
|
Converting output Data to Money |
|
|
222 | (1) |
|
Calculating the Cost of Quality |
|
|
223 | (4) |
|
Converting Employee Time Using Compensation |
|
|
227 | (1) |
|
|
228 | (1) |
|
When Standard Values are not Available |
|
|
229 | (5) |
|
Using Historical Costs from Records |
|
|
229 | (1) |
|
|
229 | (1) |
|
|
230 | (1) |
|
|
230 | (1) |
|
|
230 | (1) |
|
|
230 | (1) |
|
Using Values from External Databases |
|
|
231 | (1) |
|
Linking with other Measures |
|
|
232 | (1) |
|
Using Estimates from Participants |
|
|
233 | (1) |
|
Using Estimates from the Management Team |
|
|
233 | (1) |
|
Using Project Staff Estimates |
|
|
234 | (1) |
|
Technique Selection and Finalizing Value |
|
|
234 | (5) |
|
Choose a Technique Appropriate for the Type of Data |
|
|
235 | (1) |
|
Move from Most Accurate to Least Accurate |
|
|
235 | (1) |
|
Consider Source Availability |
|
|
235 | (1) |
|
Use the Source with the Broadest Perspective on the Issue |
|
|
236 | (1) |
|
Use Multiple Techniques When Feasible |
|
|
236 | (1) |
|
Apply the Credibility Test |
|
|
236 | (2) |
|
Consider the Possibility of Management Adjustment |
|
|
238 | (1) |
|
Consider the Short-Term/Long-Term Issue |
|
|
238 | (1) |
|
Consider an Adjustment for the Time Value of Money |
|
|
239 | (1) |
|
|
239 | (2) |
|
13 Addressing Intangibles |
|
|
241 | (14) |
|
Why Intangibles are Important |
|
|
244 | (2) |
|
Intangibles are the Invisible Advantage |
|
|
244 | (1) |
|
We are Entering the Intangible Economy |
|
|
245 | (1) |
|
More Intangibles are Converted to Tangibles |
|
|
245 | (1) |
|
Intangibles Drive Innovation Projects |
|
|
246 | (1) |
|
The Magnitude of the Investment |
|
|
246 | (1) |
|
Measuring and Analyzing Intangibles |
|
|
246 | (7) |
|
Measuring the Intangibles |
|
|
247 | (2) |
|
|
249 | (2) |
|
Identifying and Collecting Intangibles |
|
|
251 | (1) |
|
|
252 | (1) |
|
|
253 | (2) |
|
|
255 | (18) |
|
Why Monitor Costs and Measure ROI? |
|
|
258 | (1) |
|
|
259 | (4) |
|
|
259 | (1) |
|
Costs Reported without Benefits |
|
|
260 | (1) |
|
Develop and Use Cost Guidelines |
|
|
261 | (1) |
|
|
262 | (1) |
|
Prorated versus Direct Costs |
|
|
262 | (1) |
|
|
263 | (1) |
|
Specific Costs to Include |
|
|
263 | (2) |
|
Initial Analysis and Assessment |
|
|
264 | (1) |
|
Development of Project Solutions |
|
|
264 | (1) |
|
|
264 | (1) |
|
|
264 | (1) |
|
Maintenance and Monitoring |
|
|
265 | (1) |
|
|
265 | (1) |
|
|
265 | (1) |
|
|
265 | (5) |
|
|
266 | (1) |
|
|
267 | (2) |
|
|
269 | (1) |
|
|
270 | (2) |
|
Payback Period (Breakeven Analysis) |
|
|
270 | (1) |
|
|
271 | (1) |
|
|
271 | (1) |
|
|
272 | (1) |
|
15 Forecasting Value, Including ROI |
|
|
273 | (28) |
|
|
278 | (4) |
|
|
279 | (1) |
|
High Risks and Uncertainty |
|
|
279 | (1) |
|
|
279 | (1) |
|
|
280 | (1) |
|
The Trade-offs of Forecasting |
|
|
280 | (2) |
|
Preproject ROI Forecasting |
|
|
282 | (11) |
|
|
282 | (1) |
|
Basic Steps to Forecast ROI |
|
|
283 | (4) |
|
|
287 | (1) |
|
|
287 | (1) |
|
|
288 | (1) |
|
|
288 | (1) |
|
|
289 | (4) |
|
Forecasting with a Pilot Program |
|
|
293 | (1) |
|
Forecasting with Reaction Data |
|
|
293 | (3) |
|
Case Study: Forecasting ROI from Reaction Data |
|
|
294 | (1) |
|
|
295 | (1) |
|
|
296 | (3) |
|
|
299 | (2) |
|
|
301 | (22) |
|
The Importance of Communicating Results? |
|
|
303 | (1) |
|
Communication is Necessary to Make Improvements |
|
|
303 | (1) |
|
Communication is Necessary to Explain the Contribution |
|
|
303 | (1) |
|
Communication is a Politically Sensitive Issue |
|
|
304 | (1) |
|
Different Audiences Need Different Information |
|
|
304 | (1) |
|
Principles of Communicating Results |
|
|
304 | (3) |
|
Communication Must Be Timely |
|
|
305 | (1) |
|
Communication Should Be Targeted to Specific Audiences |
|
|
305 | (1) |
|
Media Should Be Carefully Selected |
|
|
305 | (1) |
|
Communication Should Be Unbiased and Modest in Tone |
|
|
305 | (1) |
|
Communication Must Be Consistent |
|
|
306 | (1) |
|
|
306 | (1) |
|
Testimonials Must Come from Respected Individuals |
|
|
306 | (1) |
|
The Audience's Bias of the Project Will Influence the Communication Strategy |
|
|
306 | (1) |
|
Storytelling is Essential |
|
|
307 | (1) |
|
The Process for Communicating Results |
|
|
307 | (1) |
|
The Need for Communication |
|
|
308 | (1) |
|
|
309 | (1) |
|
The Audience for Communications |
|
|
309 | (3) |
|
Basis for Selecting the Audience |
|
|
311 | (1) |
|
Information Development: The Impact Study |
|
|
312 | (1) |
|
|
312 | (4) |
|
|
312 | (2) |
|
Interim and Progress Reports |
|
|
314 | (1) |
|
Routine Communication Tools |
|
|
315 | (1) |
|
E-mail and Electronic Media |
|
|
316 | (1) |
|
Project Brochures and Pamphlets |
|
|
316 | (1) |
|
|
316 | (1) |
|
|
316 | (6) |
|
Routine Feedback on Project Progress |
|
|
317 | (2) |
|
|
319 | (1) |
|
Presentation of Results to Senior Management |
|
|
320 | (2) |
|
Reactions to Communication |
|
|
322 | (1) |
|
|
322 | (1) |
|
17 Implementing and Sustaining ROI |
|
|
323 | (20) |
|
|
324 | (3) |
|
Resistance is Always Present |
|
|
326 | (1) |
|
Implementation is the Key to Success |
|
|
326 | (1) |
|
|
326 | (1) |
|
|
326 | (1) |
|
|
326 | (1) |
|
Implementing the Process: Overcoming Resistance |
|
|
327 | (1) |
|
|
328 | (1) |
|
Developing Roles and Responsibilities |
|
|
328 | (3) |
|
|
329 | (1) |
|
Developing the ROI Leader |
|
|
329 | (1) |
|
Establishing a Task Force |
|
|
329 | (1) |
|
Assigning Responsibilities |
|
|
330 | (1) |
|
Establishing Goals and Plans |
|
|
331 | (1) |
|
Setting Evaluation Targets |
|
|
331 | (1) |
|
Developing a Plan for Implementation |
|
|
332 | (1) |
|
Revising or Developing Policies and Guidelines |
|
|
332 | (2) |
|
Preparing the Project Team |
|
|
334 | (1) |
|
Involving the Project Team |
|
|
334 | (1) |
|
Using ROI as a Learning and Project Improvement Tool |
|
|
334 | (1) |
|
|
334 | (1) |
|
|
335 | (1) |
|
Selecting the Initial Project |
|
|
335 | (1) |
|
Developing the Planning Documents |
|
|
335 | (1) |
|
|
336 | (1) |
|
Establishing Discussion Groups |
|
|
336 | (1) |
|
Preparing the Sponsors and Management Team |
|
|
336 | (1) |
|
|
337 | (2) |
|
|
337 | (1) |
|
|
338 | (1) |
|
|
338 | (1) |
|
|
339 | (1) |
|
|
340 | (3) |
References |
|
343 | (8) |
Index |
|
351 | |