What are the best metrics for balancing short-term and long-term innovation goals in Product Development?

Innovation horizons provide a valuable framework for balancing short-term and long-term innovation goals. But let's view them not just as distinct categories, but as a dynamic spectrum where the boundaries between them can blur. It's not always about neatly fitting projects into one of these horizons. Sometimes, the most transformative innovations emerge when Horizon 1, 2, and 3 projects intersect, creating a synergy that fuels both immediate revenue and long-term industry disruption. In today's rapidly changing landscape, a flexible and adaptive approach to innovation horizons may be the key to staying ahead.

from the outset on a quarterly basis, it is ideal to align with leadership on the goals of a team. Is the team supposed to innovate in a way that allows for significant risk? Or does the team have certain goals that must be met indicating that less risky proposition should be taken on. Establishing this ensures that a team can decide what investments should be made in each horizon.

In my opinion, the three dimensions of horizon innovations are a good way to visualize the different levels of projects. Indirectly, this provides insight into short-term or long-term projects. However, I would like to highlight that this perspective is limited. Instead of viewing this concept in a pyramidal structure, it seems more interesting to see it intrinsically, as a set of nested dolls. Thus, horizon 1 projects are part of horizon 2 projects, which is also part of horizon 3 projects. This perspective allows for breaking down micro-projects within horizon 3 into smaller projects, leading to an increased perception of success and the consolidation of achievements = continuous improvment loop

In my experience, innovation is a team sport, and the most innovative organizations get more people involved than the median organization. The most important input metric is how many people you asked for input-- frontline, back office, customer service, finance, executive suite. The best way to get a good idea is to start with a lot of ideas. It is hard to get a lot of people involved, so a lot of people skip it, and localize innovation in the product management ghetto. But the best organizations get input from everyone inside the building and outside the building. Count the number of interviews you have completed-- that's the most important input metric.

The most important metrics to determine where to focus are product quality trends over time. If the number of bugs reported in each product release, or the time spent fixing bugs is not decreasing over time, your brand will suffer. If your developers are spending a large percentage of their time fixing bugs, and that trend is not improving over time, that tells you the focus should be on improving the quality of code reaching production rather than adding yet more unstable features to the existing unstable code. Attempting to increase development velocity by "moving faster" or adding more staff without first addressing product quality issues increases cost and destroys your brand image.

While the use of metrics to balance short-term and long-term innovation goals is vital, it's crucial to remember that the real power of metrics lies not just in measurement but in the insights they provide. Metrics are more than just numbers; they are the story of your innovation journey. Consider metrics as not just a reflection of past performance but as a compass for future direction. They are the signals that guide your innovation strategy, helping you navigate the complex landscape of short-term gains and long-term impact. Metrics should drive not only evaluation but continuous learning, adaptation, and the alignment of your innovation efforts with your overarching vision.

Der %-Anteil am Umsatz/Profit der Innovationen der letzten 5 Jahre an Total p.a. ist eine gute Steuerungsgr?sse (“Innovation” muss dabei klar definiert werden vs. Variation etc.)

What you can’t measure.. you can’t manage or improve, so using scorecards is key for balancing immediate (short term) and future (long term) innovation goals, but their real benefit goes beyond just tracking progress. Scorecards tell the story of your journey over time, guiding your next steps. They're not just about past achievements; they help you make smart moves towards long-term success. They should encourage continuous improvement and ensure your innovation aligns with your overall vision. Think of these scorecards KPIs , ROI, Growth, Market impact and product lifecycle

Think of the innovation balance scorecard not just as a tool but as a compass for your product development journey. It's not merely a set of metrics and perspectives; it's a roadmap that aligns your innovation strategy with your mission and guides you toward your vision. In an age where agility and adaptability are paramount, this scorecard becomes a dynamic instrument that evolves with your product development. It adapts to the shifting landscapes of short-term financial gains, long-term customer value, internal efficiencies, and the continuous learning and growth of your team. By viewing it as a living entity, you'll find it easier to balance the complexities of innovation in an ever-changing world.

I believe that push an innovation culture can only be achieved by targeting individuals who already have a penchant for savvy, and significant curiosity. While factory means efficiency, innovation is directly linked to agility and versatility. To promote an innovation culture, liberated management is essential. Trust and autonomy are crucial for the development of innovations. For instance, I've initiate a "reading list" where each team member pitches for 5 minutes on a cultural, technical, scientific, or current economic topic—a fun activity that consolidates knowledge and argumentation. Finally, having a deep understanding of team members is THE most important aspect. It ensures versatility and a significant part of creative autonomy.

Fostering an innovation culture isn't a task; it's a transformative journey. It's about nurturing a collective spirit of curiosity and resilience, celebrating experimentation and learning from failures, and making innovation a team-wide pursuit. In this culture, your team is intrinsically motivated to tackle short-term challenges and long-term innovations with enthusiasm and creativity.

One thing that I found useful is ensuring that a team remembers what user outcomes we are trying to create. Upon reflecting on these outcomes, it is easier to make a case that a current solution will not improve these outcomes through incrementalism. The more that one can quantify this the better.

Innovation tools serve as more than just instruments; they are your allies in the pursuit of short-term gains and long-term growth. Think of them as the brushes and paints for your innovation canvas. These tools offer structure to your creativity, allowing you to explore uncharted territories with a systematic yet inventive approach. Each tool represents a unique lens to view your innovation projects, be it through design thinking, lean startup, agile development, or others. In your toolbox, you have the power to shape the future, delivering value to your customers and transforming your business and industry.

Regarding innovation tools, there are many options such as Scrum, Agile, business models, Lean, and many more. In my opinion, none of these tools is a perfect fit for real project leading. Personally, I use a simple toool : PowerPoint. It consists of two main pages: - Project framework (accomplished since the last review, obstacles (5M method), and remaining tasks) - Macro-Gantt This system is suitable for both collaborative and individual work, ensuring a straightforward roadmap for all my projects. While this template can be enriched, the structure remains fixed. The best approach to project management is to test various solutions and innovate to create one that fits your needs perfectly!

Embracing innovation challenges is akin to navigating uncharted waters. These challenges are not roadblocks but stepping stones to progress. Market and technology changes, customer expectations, and even resource constraints are the winds that propel your innovation ship forward. They're not just hurdles to overcome; they're opportunities for growth and transformation. In this journey, adaptability and a forward-looking mindset become your compass, guiding you toward a horizon where short-term achievements and long-term innovations meet.

The challenges associated with innovation can be multiple, and I am fortunate to be protected from some. While the innovator is haunted by the fear of the blank page, the fight against time is for sure their nemesis! Being the first to present a concept, an innovation while staying one or two steps ahead of the market can only be achieved by one tips : eliminating competitive and market intelligence from the innovation process ! The best way to have different ideas from competitors is not to draw inspiration from their work. Therefore, time spent chasing competitors can be better utilized in brainstorming and pure innovation. Feed yourself from yourself, speak with scientist, technician, inspired you with everything exept your own market !

To me, it's a waste of time to spend significant effort to puzzle out metrics beyond just looking for increased in sales or profit or positioning. What is far more important is to make sure you have puzzled out short term vs long term strategies. Those strategies should provide guidance for the kinds of innovations and problems they solve that fit with your business plan. Those strategies must provide the framework for the development part of your Team to know what pain points matter to the entire Team. The most important thing is to establish a "Criteria For Goodness" long term and short term. What you want is a focused innovation effort which balances creativity and discipline in a way that matches the goals in your business plan.

Some products sell well, perhaps just after launch, and there is not even a distinct short and long-term strategy, but just a single strategy, usually short term. This seem to work until it does no more work, when it becomes too late to implement a long term strategy, and the sales drop so quick that you can't replace them. You have not to overthink a product before launch, but also, if the launch goes well, you have not to hope that the same will continue to work forever: it will not, and a long term strategy is needed to be prepared to pivot, diversify or change as needed to keep relevant in the far future.

Some products sell well, perhaps just after launch, and there is not even a distinct short and long-term strategy, but just a single strategy, usually short term. This seem to work until it does no more work, when it becomes too late to implement a long term strategy, and the sales drop so quick that you can't replace them. You have not to overthink a product before launch, but also, if the launch goes well, you have not to hope that the same will continue to work forever: it will not, and a long term strategy is needed to be prepared to pivot, diversify or change as needed to keep relevant in the far future.