“...the best and brightest are now working on ways to save fractions of pennies through efficiency instead of product development. And the problem lies in the way that businesses and the financial markets measure success.” -- Clayton Christensen, Harvard Business School professor
No wonder he thinks Innovation is Crippled!
When we measure by cost-cutting existing processes, and earnings from existing products; we get cost-cutting measures and a dearth of new products.
What if we measured by how much we can make from new products? What if we measure by the potential productivity gains from improving processes or empowering our people?
In the same way that hindsight is 20-20, measuring potential is much harder to do than measuring what happened last quarter.
And I don't think many business leaders are ready to change the metrics any time soon. Not unless there is significant external incentives to do so.
This is another reason why I believe breakthrough innovation is more likely to come from non-conventional, often smaller, businesses. They have the most to gain from doing and measuring things their own way.
What are you currently measuring?
What changes are these measurements fostering?
What could you change?
What improved behaviours can you inculcate by measuring differently?
Image: Measuring instruments via Shutterstock.