Open innovation is where organizations seek input from external sources, such as clients, partner organizations and academic institutions. For example, our customer – Dutch mental health provider, Kwintes – uses an open innovation platform to get ideas on how to improve their services directly from their patients.
As with using internal sources for innovation, it’s important to have a clear goal in mind and to measure and celebrate successes. Here is our top advice for tracking the success of your open innovation efforts.
What is Your Objective?
Why have you decided to use open innovation? What is it you’re hoping to achieve?
Before you start to determine success, you’ll need to have a think about what that looks like. What is the ultimate goal?
You may find it useful to go back to your original business strategy and ensure that your innovation strategy supports your core outcomes. For example, if your business strategy is to forge a stronger relationship with clients or partners, then asking them to have their say on new ideas will make them feel that your business cares about them. It also provides a tailored and personalized aspect to your company’s service or products.
Other common objectives for open innovation include:
- Reaching a larger audience (this is particularly useful for smaller organizations)
- Adapting to changing markets
- Improving external opinions of the organization.
What do You Need to Measure?
Innovation – unsurprisingly – is a tough subject to pin down and measure. However, there are key indicators that you can use to ensure that your open innovation strategy is heading in the right direction. Innovation software can help to track these.
- Ideas submitted – how many suggestions are being put forwards? You could consider putting some targets in place and asking your customer success or partnership team to reach out to their contacts.
- Ideas carried forwards – this is a crucial metric for analysing the practicality of ideas being submitted. How many ideas are being put through to the consideration stage and actively being considered for projects? If very few are, you may want to consider creating challenges related to business strategies.
- Deadlines hit and missed – are you missing out on potential value due to bottlenecks in your processes? Keep an eye on the number of processes within your strategy that suffer from missed deadlines and work with your teams to relieve any challenges that are causing these.
- Completed projects – once ideas have been validated and selected to be realized as full-blown projects, it’s essential to monitor how many are then completed. Having figures for submitted, considered and completed ideas will give a clear indication of the percentage of suggestions that are being converted into business value.
- ROI of completed projects – be sure to record the value (monetary and non-monetary) of projects that have stemmed from employee suggestions. This will enable you to place a figure on the value of ideation within your business.
- Costs incurred – finally, to see the true value of your efforts, you need to take into account costs incurred whilst gathering ideas and realizing projects.
- Sentiment analysis – if the aim of your open innovation strategy is to improve the way that customers see your business, then it’s worth investing in some sentiment analysis. Do people look upon you more favourably? Are you seen as more innovative?
Communicate Your Successes
As with internal innovation, it’s important to let those taking part know when their ideas have been turned into successful projects – or even simply moved to the consideration stage. Show them that they are being listened to and they will be more inclined to engage in your campaign.
It’s also important to keep stakeholders within the business informed about any successes or changes that you have decided to make. They especially need to know about the value that open innovation is bringing to the organization, both in terms of monetary gains (or savings) and non-monetary value (such as closer partnerships or improvements in sentiment analysis).
Open innovation is a useful tool for improving the reach of your innovation efforts and helping your stakeholders – such as clients and partners – to feel more involved in the business.
Have a goal in mind for using open innovation and select KPIs accordingly, then reach out and communicate your successes to keep the engagement going!