24 Metrics for Managing Innovation: Lessons From Growth Leaders ^Top years, from 30 percent to 40 percent. The same problem affects the equally popular measure of number of new products launched.21 The new product success rate metric is also susceptible to gaming and ma- nipulation. On one hand it is an essential indicator of the ability of the firm to weed out unpromising projects as early as possible and bring the best ones to market ahead of the rivals. But what is “success”? Was success achieved by setting an easy target? A big problem is the under-emphasis on riskier “BIG I” innovations. It is tempting to defer spending on these projects when there is a bonus attached to reaching a target success rate. Pitfall Three: Encouraging the Wrong Behaviors Our conversations with senior managers responsible for innovation about their experience with innovation metrics, soon turned to their frustration with the misalignment of these metrics with individual performances incentives. This did not fully prepare us for the depth of dissatisfaction found in the sur- vey. Only 19 percent of the sample felt that incentives were effectively aligned with the innovation metrics, while 40 percent said they were not aligned. The level of dissatisfaction was less in firms with a supportive culture, and a strategy where innovation was the top strategic priority. But overall it was evident there was limited accountability for innovation performance because individual incentives could not be linked to improving some aspect of the innovation process. The role of a supportive culture was a major influence on all the judgments of the usefulness of metrics. For instance, the top two box score for satisfaction with the alignment of incentives was 27 percent when the culture was judged to be supportive, and only 5 percent when the culture was not supportive.  21 One of the consequences was to encourage the application of standard lean or Six Sigma processes to innovation within 3M, that eventually impeded innovation, as reposted in A. Canato, David Ravisi and N. Philips, “Coerced Practice Implementation in Cases of Low Cultural Fit: Cultural Change and Practice Adaptation During the Implementation of Six Sigma at 3M,” Academy of Management Journal, 56 (2013), 1724-1753.

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