Innovation is concerned with the wider process of exploiting those creative ideas to solve practical problems, address the effects of change, and to generate sustained economic growth. This connection suggests that if we want to measure and manage innovation, we must be able to measure those factors that are driving the process – and that means understanding the personal, organizational and cognitive inputs.

 “Connection between creativity and innovation is critical, as it suggests that if we want to measure and manage innovation, we must be able to measure those factors that are driving the process.”

Jump forward now to 2016. Innovation, which is fueled by a creative front-end, is typically measured by counting inputs such as R&D dollars, number of staff, time dedicated to training, and number of strategic alliances, and outputs such as market share, profit, stock price, and annual sales. Even if we find a correlation between an input like number of staff and an output like annual sales, it doesn't take too long to start asking why? Why does the number of staff in an organization link to annual sales (if, indeed, it does)? Why does the R&D send link to stock price? While these measures certainly have value, not least because they are usually readily obtainable, like the leaders in the late 1950s, it doesn't take us long to shift from this quantitative view (how many?) to a qualitative view (why?). That qualitative view asks – what is it about the person – the human capital of the organization – that drives the innovation process?

It's curious, therefore, that many measures of innovation remain anchored in a quantitative counting paradigm. Indeed, many measurement scientists would argue that this is not even real measurement. The quantitative paradigm in innovation measurement also has the disadvantage that outputs – or lagging – measures describe what has happened in the past. They are historical measures and they don’t tell us why things happened. If we wish to influence the future, then innovation management needs to adopt input, or leading, measures that not only describe what will happen – the capacity for innovation – but also indicate why.

As a result, as it did in the late 1950's, after the Sputnik Shock, the conversation in innovation measurement and management needs to shift from quantitative explanations of innovation, to qualitative ones. What is it about the human capital of the organization that fuels the capacity for innovation? 

Happily, there is extensive work on the psychology of creativity and innovation that addresses this issue. These inputs to the innovation process – the qualities of the individual; the cognitive mechanisms employed in idea generation and evaluation; the impact of the organizational culture and climate; the factors that make ideas novel and effective – are rigorously and objectively measurable (in the true sense of the word). However, perhaps we need a 21st Century Sputnik Shock to convince people that we can do better than merely counting and tallying simple, quantitative inputs and outputs in the hope that we will develop a deeper understanding of the drivers of innovation. Equipped with rigorous, validated measures of innovation inputs – the human capital – organizations can drive their innovation capacity to new levels, ensuring sustainable growth into the future.

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