When wrong is right : leaving room for error in innovation measurement
(2021) In Journal of Risk and Financial Management 14(7).- Abstract
- To date, measuring innovation has not been an exact science. As in many areas of organizational life, errors in measuring innovation are a recurring fact. Innovation researchers and practitioners alike have become increasingly interested in understanding the occurrence of organizational errors and how these errors affect innovation and its measurement. This empirical study aims to address this under-explored area by utilizing a qualitative in-depth case study at the innovation department of an organization with production sites and sales organizations worldwide. A total of 28 semi-structured interviews at several organizational levels were conducted, with innovation managers, project managers, senior managers, and staff. Based on the... (More)
- To date, measuring innovation has not been an exact science. As in many areas of organizational life, errors in measuring innovation are a recurring fact. Innovation researchers and practitioners alike have become increasingly interested in understanding the occurrence of organizational errors and how these errors affect innovation and its measurement. This empirical study aims to address this under-explored area by utilizing a qualitative in-depth case study at the innovation department of an organization with production sites and sales organizations worldwide. A total of 28 semi-structured interviews at several organizational levels were conducted, with innovation managers, project managers, senior managers, and staff. Based on the findings in this case study, three explanations are presented on how organizational errors occur when using innovation KPIs (key performance indicators). The first explanation can be connected to the increasing complexity of innovation and its intangible nature. Another explanation can be traced to the difference between innovation strategy and innovation KPIs. Lastly, room for organizational errors can be related to the multitude of individuals and organizational levels involved in innovation and its measurement. The implications for practitioners are that innovation KPIs are not precise metrics but should be seen as estimates with organizational errors. Whether or not these innovation KPIs can be used as tools to turn innovation into competitive advantages largely depends on whether wrong is right. Future research should focus on the metrics that are implemented and actually in use, as this future path would highlight the function and dysfunction that organizational errors in innovation KPIs can have. (Less)
- Abstract (Swedish)
- Purpose: The purpose of this paper is to contribute to a better understanding of the occurrence of strategic error in using key performance indicators (KPIs) in innovation
Design/methodology/approach:
This case study was conducted at the innovation department of an organization in the process industry that operates production sites and sales organisations worldwide. Observations and interviews were made on several organizational levels (multi-level), including 28 interviews with innovation staff.
Findings:
This research shows that innovation KPIs display room for error. The setting of the preliminary KPIs by participants at strategic levels seemed to be differ from the innovation KPIs reported by participants at... (More) - Purpose: The purpose of this paper is to contribute to a better understanding of the occurrence of strategic error in using key performance indicators (KPIs) in innovation
Design/methodology/approach:
This case study was conducted at the innovation department of an organization in the process industry that operates production sites and sales organisations worldwide. Observations and interviews were made on several organizational levels (multi-level), including 28 interviews with innovation staff.
Findings:
This research shows that innovation KPIs display room for error. The setting of the preliminary KPIs by participants at strategic levels seemed to be differ from the innovation KPIs reported by participants at operational levels in the organization.
Research limitations/implications:
To enable value creation and learning in innovation and the organization, special attention needs to be given to the interplay between the design, use of strategy and metrics in innovation at all levels of the organization.
Practical implications:
This study assists in developing ideas for research and practice to manage the occurrence of strategic errors in the use and development of key performance metrics in innovation.
Originality/value:
This paper, as a first in its kind, shows that consideration to organizational errors in innovation KPIs can facilitate learning and innovation performance. By focusing on strategy-by-learning instead of finding the right metric for innovation, organizational errors can be reduced as well as negative consequences both on strategical and operational levels and enhance value creation.
Keywords: strategic error; performance metrics; innovation; learning; case study
Paper type: Case study
(Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/f2a27f72-d20c-4f83-bb81-f7d3cc333a63
- author
- Svensson de Jong, Ilse LU
- organization
- publishing date
- 2021-07-17
- type
- Contribution to journal
- publication status
- published
- subject
- in
- Journal of Risk and Financial Management
- volume
- 14
- issue
- 7
- article number
- 332
- publisher
- MDPI AG
- external identifiers
-
- scopus:85130111853
- ISSN
- 1911-8066
- DOI
- 10.3390/jrfm14070332
- language
- English
- LU publication?
- yes
- id
- f2a27f72-d20c-4f83-bb81-f7d3cc333a63
- date added to LUP
- 2019-12-12 12:00:07
- date last changed
- 2023-08-23 04:01:53
@article{f2a27f72-d20c-4f83-bb81-f7d3cc333a63,
abstract = {{To date, measuring innovation has not been an exact science. As in many areas of organizational life, errors in measuring innovation are a recurring fact. Innovation researchers and practitioners alike have become increasingly interested in understanding the occurrence of organizational errors and how these errors affect innovation and its measurement. This empirical study aims to address this under-explored area by utilizing a qualitative in-depth case study at the innovation department of an organization with production sites and sales organizations worldwide. A total of 28 semi-structured interviews at several organizational levels were conducted, with innovation managers, project managers, senior managers, and staff. Based on the findings in this case study, three explanations are presented on how organizational errors occur when using innovation KPIs (key performance indicators). The first explanation can be connected to the increasing complexity of innovation and its intangible nature. Another explanation can be traced to the difference between innovation strategy and innovation KPIs. Lastly, room for organizational errors can be related to the multitude of individuals and organizational levels involved in innovation and its measurement. The implications for practitioners are that innovation KPIs are not precise metrics but should be seen as estimates with organizational errors. Whether or not these innovation KPIs can be used as tools to turn innovation into competitive advantages largely depends on whether wrong is right. Future research should focus on the metrics that are implemented and actually in use, as this future path would highlight the function and dysfunction that organizational errors in innovation KPIs can have.}},
author = {{Svensson de Jong, Ilse}},
issn = {{1911-8066}},
language = {{eng}},
month = {{07}},
number = {{7}},
publisher = {{MDPI AG}},
series = {{Journal of Risk and Financial Management}},
title = {{When wrong is right : leaving room for error in innovation measurement}},
url = {{http://dx.doi.org/10.3390/jrfm14070332}},
doi = {{10.3390/jrfm14070332}},
volume = {{14}},
year = {{2021}},
}