Innovative ideas take time to flourish. Harnessing metrics at an early stage can constrain your thoughts right before they start shaping into a successful product. Nonetheless, most organizations use financial metrics to measure the cost of their new products. In this article at Harvard Business Review, Scott Kirsner defines business as a highway of expectations going 65 miles per hour. Technology inventors are the roadside garage that can develop customized vehicles.
Sometimes, C-suite executives realize the potential of the prototypes developed by technology innovators. They offer to stage the idea on the highway. Disaster happens when you apply limitations and calculations at each phase of product development. In such circumstances, digital innovation is thrown under the bus and ends up rejected by the roadside. The teams involved in its creation also suffer failure and lose the vision to make a fresh start.
Key to Success
To turn an innovative idea into a successful solution, companies must initiate a strategic transition from the garage to the highway. The metrics you wish to apply must be used during the product development process. For instance, use early metrics to underline the possible areas that require measuring to improve their impact and value.
Even then, most organizations embrace the transition. Innovation leaders are aware of the financial metrics that chief financial officers (CFOs) are using. Indeed, they are essential for ROI, cost management, and profit margins.
Clarity of Thought
Organizations pitching new ideas to clients must have a clear strategy to craft a “minimum mix of relevant metrics” to validate growth and value for the money. Only a few metrics may allege you of performing “innovation theatre” while applying multiple metrics simultaneously results in too much data.
Woody Faulk, VP of innovation and new ventures at Chick-fil-A, the Atlanta-based fast-food chain, explains the impacts of using return-on-invested capital. Its outcomes are far more lenient to startup ventures than an existing business. A new venture can afford to experiment and survive the financial analysis. Once it starts picking up speed, you can apply more stringent actions to define a path to prosperity.
Indeed, your CFO will not invest time in brainstorming innovative ideas. However, they can help you create suitable financial metrics feasible for all. Click on the following link to read the original article: https://hbr.org/2021/03/dont-let-financial-metrics-prematurely-stifle-innovation