Impact 1: Guest Blog – Does measurement kill innovation?

RichardPiper50pxAt the fifth Innovation Group Live! event we explored what we mean by impact of innovation and how to evaluate it.  Richard Piper, Head of Strategy and impact at NCVO, digs a little deeper into the issues around innovation and impact and asks if they are friends or foes.

The moment you try to measure the success of your innovations and subject them to the techniques of evaluation and performance management, you drive out the very risk-taking and creativity that you need to innovate successfully.  Evaluation is the enemy of innovation.

That’s a view.

If you fail to evaluate (and improve) the innovativeness of your organisation, then you’re leaving innovation to chance and risk falling behind other organisations in your field. You may have invested time and effort (and money) trying to encourage innovation, and if you fail to prove that this is paying dividends, the investment may end. Evaluation is the friend of innovation.

That’s a view, too.

Which of these views is right? Well I think they can both be right, if we dig a little deeper and draw two separate distinctions.

Evaluating innovations

First, it’s important to distinguish between evaluating your innovation(s) and evaluating the degree to which your organisation is innovative.

If you’re looking to evaluate one or more innovations, what you might want to avoid is simplistic approaches to evaluation suitable for low innovation projects. For example, in his recent article on evaluation and innovation Burt Perrin points out that ‘success rates’ can be a useless indicator. A high success rate (eg, “80% of our innovations were successful”) might mean there was too little risk-taking, or indeed too little innovation.  Consistent with the first view above, Heather Bewers, Director of Innovation at KPMG argues that its helpful to resist attempts to try apply ‘financial returns on investment’ techniques to innovation as these can be costly and can indeed undermine risk-taking and creativity.

There are a couple of techniques that might be more helpful when evaluating an innovation. Where an innovation is designed to solve a problem, then a very simple but powerful evaluation would be to ask if it worked. Was the problem solved? This is made easier if you defined the problem well in the first place.  Another technique is using the simple idea of ‘before’ and ‘after’. What were things like before this innovation, what are they like now, and how much did the innovation contribute to this change?

Evaluating innovativeness

Looking to evaluate the innovativeness of your organisation is quite different to evaluating specific innovations. It is arguably good practice for all organisations to check that they encourage and don’t stymie innovation.  This can be done by asking staff and volunteers whether they feel heard when they suggest ideas, whether they have time and space to try out new things and experiment, whether they believe the organisation tolerates and learns from failures.  This might be done through informal conversations, or in annual appraisals, or, as KPMG do, through an anonymous staff survey. Personally I think it’s particularly important to be clear that small-scale improvements to existing services and processes count as innovation, not just large-scale development of whole new product areas.

Evaluation versus Impact

Second, there’s a critical distinction between evaluation and impact. You may have noticed that the title of this blog refers to impact, but what I’ve actually been talking about is evaluation. If impact and evaluation were broadly the same thing, that wouldn’t be a problem. However they are very different, as I’ve argued elsewhere (http://bit.ly/ImpactLeadership). ‘Impact’ can of course be evaluated, but there are other things you can do with it that are at least as important: plan for it, deliver it, improve it, communicate it, and place it at the heart of your organisational culture.  Too many people are put off thinking about impact because they mistakenly think it’s primarily about evaluation, monitoring and measurement.

In particular, properly planning what impacts we want our organisation to create is absolutely vital if we are to fulfil our potential and really make a difference. For organisations that are new to impact thinking, one of the most common challenges is moving from asking “right, given our products, services and other outputs, what impact do we create?” to asking “right, let’s decide what changes we want to make in the world, and then work out what services and outputs would best deliver that impact”. Impact thinking can feel very unfamiliar and unsafe to some people who’ve perhaps spent years or even decades stuck in outputs thinking.  But this thinking is, in my experience, the most fundamental characteristic of genuinely successful voluntary organisations and social enterprises.

Impact and Innovation

And this brings us to an interesting thought (to me at least) about impact and innovation. What if an organisation clearly determined the impacts it wanted to achieve, but then freed its people to work out the best ways to achieve these impacts? What if there were no assumptions or centralised statements about what services or products or outputs it should deliver, as long as they create as much impact as possible? Would this instantly create an innovation culture?

This might be a pipe dream.  It might be possible.  It might already happen. If you have experience of this, or a view on any of the ideas above, I’d love to hear from you.

Richard Piper

Richard Piper is Head of Strategy & Impact at the National Council for Voluntary Organisations and leads NCVO Consultancy.

You may also like to read this http://bit.ly/vprt13 and article from Non Profit Quarterly challenging sloppy thinking on innovation and impact
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