An innovation audit is a systematic and comprehensive assessment of your organization's innovation capabilities, performance, and potential. It helps you identify the strengths and weaknesses of your innovation processes, culture, and outcomes, and provides you with insights and recommendations for improvement. In this article, you will learn how to conduct an innovation audit in six steps.
The first step is to define the scope of your innovation audit. What are the objectives, criteria, and boundaries of your assessment? For example, you may want to focus on a specific business unit, product, service, or market, or you may want to evaluate your entire organization. You may also want to benchmark your innovation performance against your competitors, industry standards, or best practices. You should also decide on the time frame, budget, and resources for your audit.
The unit to audit always should have an associated P&L to it. It can be a business unit, a country branch, or anything that has enough organizational structure to be linked to an isolated P&L for it.
By carefully defining the scope, considering practical considerations, and following a well-defined process, organizations can gain valuable insights to improve their innovative performance. In this way, the proposed goals can be achieve.
The second step is to choose the method or framework for your innovation audit. There are various tools and models that you can use to measure and analyze different aspects of innovation, such as the Innovation Capability Maturity Model, the Innovation Radar, the Innovation Excellence Framework, or the Innovation Index. You should select the one that best suits your scope, objectives, and data sources. You should also consider the validity, reliability, and usability of the method.
A good beginning is the framework proposed by Marcel Planellas from ESADE Business School, "Creativity Audit", in the book "El libro rojo de la innovacion".
The third step is to collect the data that you need for your innovation audit. Depending on your method and scope, you may need to gather quantitative and qualitative data from various sources, such as surveys, interviews, focus groups, observations, documents, reports, or metrics. You should aim to collect data that covers the inputs, processes, outputs, and outcomes of innovation, as well as the internal and external factors that influence them.
This data must be validated, for example bibliographies are very useful to be able to give confidence to the information we are providing, this saves us time in the follow steps.
Avoid qualitative data and work just with quantitative data. Make the effort to create a metric for the qualitativa stuff that you want to know. You should target to collect data in a way that you can run Machine Learning on it.
The fourth step is to analyze the data that you have collected for your innovation audit. You should use appropriate statistical and analytical techniques to process, summarize, and interpret the data. You should look for patterns, trends, gaps, and opportunities in the data, and compare them with your objectives, criteria, and benchmarks. You should also identify the strengths and weaknesses of your innovation capabilities, performance, and potential.
You should use Machine Learning to analyze your data to make it systematically and automatically. Doing it manually is OK while you cannot do it, but you should aim for it in the future.
The fifth step is to report your findings from your innovation audit. You should present your results in a clear, concise, and compelling way, using charts, graphs, tables, or diagrams to illustrate your points. You should highlight the key findings, insights, and recommendations from your analysis, and explain how they relate to your objectives, criteria, and benchmarks. You should also provide evidence and examples to support your claims.
Build Innovation Key Performance Indicators with the same range (e.g. always with 0% as the minimum value and 100% as the maximum value) in order to be able to compare each Innovation KPI over time, and each Innovation KPI against the others.
The sixth and final step is to implement the actions that you have derived from your innovation audit. You should prioritize the actions that have the most impact, feasibility, and urgency for your organization. You should also assign roles, responsibilities, and resources for each action, and set timelines, milestones, and indicators for monitoring and evaluating their progress and outcomes. You should also communicate and engage your stakeholders throughout the implementation process.
A good way to start, organize or keep the team informed about the current status of the actions to be carried out is to use agile methodology, such as Kanban.