GroundControl is heavily built around the principles of Innovation Accounting to measure innovation success. If you’ve used our platform before or read about it, that shouldn’t come as a surprise. However, we often notice that there is confusion about what Innovation Accounting is and isn’t and where it should and shouldn’t be used. Measuring innovation […]
Innovation Accounting: how to measure innovation success
Manage the development of new products and business models and align innovation with your business strategy, by applying innovation accounting to your innovation ecosystem.
Table of Contents
Levels of Innovation Accounting
Within our innovation accounting framework, there are three types of key performance indicators (or KPIs) each company should be tracking for innovation:
- Reporting KPIs are connected to Innovation Practice. These focus on product teams, the ideas they are generating, the experiments they are running and the progress they are making from ideation to scale.
Read more: 3 Reporting KPIs to get started with innovation accounting - Governance KPIs are connected to Innovation Management. The focus here is on helping the company make informed investment decisions based on evidence and the current innovation stages teams are in.
- Global KPIs are connected to Innovation Strategy. The focus here is on helping a company's venture board examine the overall performance of their investments in innovation in the context of the larger business to increase the quality of investment/disinvestment decisions.
In order to measure your whole innovation ecosystem, and get the most accurate, reliant, and timely data, we encourage you to also measure:
- The startup collaborations to better manage your collaboration projects and maximize the value of the partnership between corporations and startups.
- Innovation HR capabilities to make sure you have the right mix of people with the right skillsets.
- Innovation culture to make sure that your organization has a setting in which innovation can drive.
Types of Innovation Accounting Metrics
Besides the different levels of Innovation Accounting, there are also two different types of innovation metrics:
Activity metrics focus on how busy the company has been with innovation. They measure the level of innovation activity going on (e.g. number of new products launched, number of experiments run, ideas prototyped).
In contrast, impact metrics measure the tangible results that are emerging from this innovation activity. Revenue and profits are the ultimate measures of impact, but the speed of validating new business models is also a great example.
Innovation Labs have the tendency to focus on activity metrics rather than impact metrics. That is fine to show early signs of success, but in the end, innovation has to have a real impact on the organization. Taking impact metrics into account is not benchmarking the results with industry standards, it is looking at what the numbers are telling us, are they indicating a possible sustainable, repeatable, and scalable business model?
Set up your own Innovation Accounting
with GroundControl as your single source of truth
Designed for Innovation Managers and Corporate Ventures
Innovation Managers
- Have real-time insights into the performance of their innovation program with innovation accounting.
- Have a visual overview of the progress of all ventures.
- Can report with confidence to the board with clear and visual data.
Corporate Ventures
- Easily identify their riskiest assumptions, thanks to clear key questions and a smart risk model.
- No more PowerPoint! Generate One-Pagers based on factual data and learnings.
- Use shared learnings from other ventures.
Innovation Accounting Infographic
We created a printable infographic poster of everything there is to know about innovation accounting. You can download and print it for free.
Download Innovation Accounting infographicExample Innovation KPIs for Creating Ideas
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Example Innovation KPIs for Testing Ideas
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Example Innovation Metrics for Scaling Ideas
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Innovation Accounting Book
The Innovation Accounting book provides a practical guide for measuring your company’s innovation ecosystem. The book is a deep-dive on all the facets of Innovation Accounting that are mentioned on this page and more.
Why this book?
When a company is committed on growing through innovation – not just exploiting the existing business models – standard accounting documents offer insufficient and, often times. irrelevant data.
Who is this book for?
- Executives looking for a new way of measuring corporate performance in a world where accounting-recognized assets are becoming commodities
- Investors seeking better ways of looking at a company’s growth potential
- Managers who need to valuate innovation product teams using not only financial indicators
Innovation Accounting articles
Here at GroundControl, we’ve seen that some managers don’t (initially) like to add startups to their portfolios when trying our product. Instead we see them taking a lot of time figuring out on their own how they should structure and measure their innovation program. While it’s completely understandable that they don’t want to throw their […]
We struggle to iterate quickly – I’d like to identify metrics to demonstrate that innovations are moving forward? This challenge from the first Group Call at Innov8ers really caught my eye. It is a struggle that we’ve seen a lot with both our own startups and the corporate startup teams that we’ve coached over the years. Especially […]
How to start with innovation accounting? We start with measuring the following three innovation KPIs from corporate startups.
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Yesterday we had the first introductory session with a potential portfolio company and tried once again to explain why it is so important to focus first on a clear early adopter. We often compare the early adopter with a person who fell of his bike (we’re from Amsterdam after all) and broke his arm. His […]
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