Misfit? The Use of Metrics in Innovation
(2021) In Journal of Risk and Financial Management 14(8).- Abstract
- Measuring innovation is a challenging but essential task to improve business performance. To tackle this task, key performance indicators (KPIs) can be used to measure and monitor innovation. The objective of this study is to explore how KPIs, designed for measuring innovation, are used in practice. To achieve this objective, the author draws upon literature on business performance in accounting and innovation, yet moves away from the functional view. Instead, the author focuses explicitly on how organizational members, through their use of KPIs in innovation, make sense of conflicting interpretations and integrate them into their practices. A qualitative in-depth case study was conducted at the innovation department of an organization in... (More)
- Measuring innovation is a challenging but essential task to improve business performance. To tackle this task, key performance indicators (KPIs) can be used to measure and monitor innovation. The objective of this study is to explore how KPIs, designed for measuring innovation, are used in practice. To achieve this objective, the author draws upon literature on business performance in accounting and innovation, yet moves away from the functional view. Instead, the author focuses explicitly on how organizational members, through their use of KPIs in innovation, make sense of conflicting interpretations and integrate them into their practices. A qualitative in-depth case study was conducted at the innovation department of an organization in the process industry that operates production sites and sales organizations worldwide. In total, 28 interviews and complementary observations were undertaken at several organizational levels (multi-level). The empirical evidence suggests that strategic change, attributed to commoditization, affects the predetermined KPIs in use. Notably, these KPIs in innovation are used, despite their poor fit to innovation subject to commoditization. From a relational perspective, this study indicates that in innovation, KPIs are usually complemented by or supplemented with other information, as stand-alone KPIs exhibit a significant degree of incompleteness. In contrast to conventional studies in innovation and management accounting, this study explores the use of key performance indicators (KPIs) in innovation from an interpretative perspective. This perspective advances our understanding of the actual use of KPIs and uncovers the complexity of accounting and innovation, which involve numerous angles and organizational levels. Practically, the findings of this study will inform managers in innovation about the use of KPIs in innovation and the challenges individual organizational members face when using them. In innovation, KPIs appear to be subjective and used in unintended ways. Thus, understanding how KPIs are used in innovation is a game of reading between the lines, and these KPIs can be regarded as misfits (Less)
- Abstract (Swedish)
- The measurement of innovation is a challenging task for management accounting practitioners and researchers alike. To tackle this task, key performance indicators (KPIs) can be used to measure and follow up innovation. This case study shows how KPIs are used to measure innovation after strategic changes due to competitive pressures. The findings of this study indicate that KPIs in innovation are usually complemented or supplemented with other information, as a stand-alone KPIs in innovation display a great deal of incompleteness. KPIs in innovation seem to be subjective and used in unintended ways, so understanding innovation KPIs in use, is a game of reading between the lines.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/07b61eb5-4616-4328-87d6-5f720f3b1282
- author
- Svensson de Jong, Ilse LU
- organization
- publishing date
- 2021-08-19
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- KPI, Performance measurement, innovation measurement, case study, Process industry
- in
- Journal of Risk and Financial Management
- volume
- 14
- issue
- 8
- article number
- 388
- publisher
- MDPI AG
- external identifiers
-
- scopus:85165780598
- ISSN
- 1911-8066
- DOI
- 10.3390/jrfm14080388
- language
- English
- LU publication?
- yes
- id
- 07b61eb5-4616-4328-87d6-5f720f3b1282
- date added to LUP
- 2019-12-11 15:14:01
- date last changed
- 2023-10-14 04:00:11
@article{07b61eb5-4616-4328-87d6-5f720f3b1282,
abstract = {{Measuring innovation is a challenging but essential task to improve business performance. To tackle this task, key performance indicators (KPIs) can be used to measure and monitor innovation. The objective of this study is to explore how KPIs, designed for measuring innovation, are used in practice. To achieve this objective, the author draws upon literature on business performance in accounting and innovation, yet moves away from the functional view. Instead, the author focuses explicitly on how organizational members, through their use of KPIs in innovation, make sense of conflicting interpretations and integrate them into their practices. A qualitative in-depth case study was conducted at the innovation department of an organization in the process industry that operates production sites and sales organizations worldwide. In total, 28 interviews and complementary observations were undertaken at several organizational levels (multi-level). The empirical evidence suggests that strategic change, attributed to commoditization, affects the predetermined KPIs in use. Notably, these KPIs in innovation are used, despite their poor fit to innovation subject to commoditization. From a relational perspective, this study indicates that in innovation, KPIs are usually complemented by or supplemented with other information, as stand-alone KPIs exhibit a significant degree of incompleteness. In contrast to conventional studies in innovation and management accounting, this study explores the use of key performance indicators (KPIs) in innovation from an interpretative perspective. This perspective advances our understanding of the actual use of KPIs and uncovers the complexity of accounting and innovation, which involve numerous angles and organizational levels. Practically, the findings of this study will inform managers in innovation about the use of KPIs in innovation and the challenges individual organizational members face when using them. In innovation, KPIs appear to be subjective and used in unintended ways. Thus, understanding how KPIs are used in innovation is a game of reading between the lines, and these KPIs can be regarded as misfits}},
author = {{Svensson de Jong, Ilse}},
issn = {{1911-8066}},
keywords = {{KPI; Performance measurement; innovation measurement; case study; Process industry}},
language = {{eng}},
month = {{08}},
number = {{8}},
publisher = {{MDPI AG}},
series = {{Journal of Risk and Financial Management}},
title = {{Misfit? The Use of Metrics in Innovation}},
url = {{http://dx.doi.org/10.3390/jrfm14080388}},
doi = {{10.3390/jrfm14080388}},
volume = {{14}},
year = {{2021}},
}