Innovation: No Measurement Means No Leadership

By Henry Doss, Chief Strategy Officer of T2 Venture Creation, from Forbes

Our doubts are traitors, 

And make us lose the good we oft might win 
By fearing to attempt.

– Shakespeare — Measure for Measure


The world of innovation leadership is a tricky one.  At our best levels of leadership, we can create an organizational ecosystem that is robust, energetic, nimble and fun.  At our worst, we can create an ugly mess of uncertainty, miscommunication, misalignment and misdirection.

The difference between those two arbitrary extremes is measurement.

measuring cup

Measuring innovation ecosystem features may require some new thinking, and some new tools.

The idea of measurement may seem  obvious as a point of view, but in the innovation world there is a complication waiting to trip the unwary.  That complication is the need to focus on measuring features of the innovation ecosystem, rather than outputs of the innovation ecosystem.  And the science of measuring features – things such as normative trust, win-win value systems, diversity of point of view, and so on — is not as fully developed as our ability to measure output.  So, we are naturally drawn to look at outputs, rather than features, because outputs can more easily be known.

But this approach simply avoids the hard work of measuring system attributes.

Edward Deming, who may yet emerge as one of the pioneers of innovation, captured this challenge succinctly:   “We should work on our process, not the outcome of our process,” he said.  Extending this to the evolving world of innovation ecosystems, the lesson is clear:  Leaders should focus on the normative features of the innovation ecosystem, not the output of the ecosystem.

A perfect example of this challenge can be found in most organizational incentive systems.  As a general rule, incentive systems are funded by a fixed pool of dollars, awarded to individual performers or teams ranked on relative performance.  Top performers (or top teams) get rewarded; bottom performers (or teams) do not.  On the surface this seems rational and logical.  But, as Deming also noted:  “The biggest enemy to the system is common sense.”

If the organization is measuring and valuing only the output of an incentive system – production – and not measuring and valuing the normative featuresof the incentive system, then the management view is not so much wrong as it is woefully incomplete.   Of course organizational leadership is rightfully concerned with production; but focusing solely on measuring production, at the expense of other organizational variables, is a sure-fire way to foster and perpetuate systems that are resistant to innovation . . . and this would most certainly include incentive structures!

In the innovation ecosystem, incentives need to be understood – and measured – relative to how they support innovative mindsets and culture.  In evaluating incentives,  an obvious set of questions would be:  1)  To what extent does the incentive system create trust?  2)  To what extent does the incentive system create collaboration?  3)  To what extent does the incentive system create a “win-win” culture.

Old map

Creating innovation ecosystem measures may require going to new, unexplored places.

What might emerge from asking these kinds of questions is a world of  “the unknown.” And this place – the “unknown” –  is precisely where genuine innovation leadership will come into play.   It is only natural to be attracted to measures –outputs – that are already in use, that seem to be proven, and which are easy to get to.  But the challenge is to lead organizations tonew measures, which will in turn allow fornew leadership – of the ecosystem.

The difficulty here is obvious.  Assuming that a leadership team understands the inherent value in, for example,  “trust,” there is still the difficulty of both knowing what trust is and being able to talk about it in an empirical manner.  Absent clear measures, leaders may find themselves in the awkward – and untenable – position of declaring a value set, but having no meaningful way of measuring or reporting on that value set.   Strong leaders can and will advocate value systems, and they will do so based solely on their confidence and good judgment.  But, over time, if judgment cannot be supported by evidence, institutional confidence will slip.

There is an old saying, often attributed to Deming:  “Never let measurement substitute for judgment.”  Of course not.  But the obverse of that may be even more instructive:  “Never let the absence of measurement be an excuse to rely solely on judgment.”  Innovation leaders will commit to ecosystem change based on judgment; they will initiate work on ecosystem norms based on judgment; and they will persevere when measurement proves to be difficult.   But sooner or later, leadership judgment must be buttressed by strong, valid empirical measures, or what starts out as a strong commitment to innovation principles will become only vague platitudes.

One of Deming’s 14 Points was: “Get rid of unclear slogans.”   The organizational world is chock full of empty slogans, and they tend to pop up when leaders are unclear about precisely what it is they want to achieve.   It is the very absence of measures and metrics that causes organizations to fall back on the vaguely inspirational.  Inspiring leadership will serve just fine as a beginning point, but over the long haul, leadership must have empirical rallying points to maintain relevance and validity.

So, inspire, yes!  Rely on your leadership judgment, yes!  Be a vocal advocate for innovation values, yes!  But recognize that part of fulfilling your innovation promise is to get down to the basic work of measuring what you are trying to create, in a way that everyone in your organization can understand and align themselves to.  Rendering the subjective objective is the final test of innovation leadership.

Henry Doss is a student, musician, venture capitalist and volunteer in higher education.  His firm, T2VC, builds startups and the ecosystems that grow them.  His university is UNC Charlotte.

One Comment on “Innovation: No Measurement Means No Leadership”

  1. Gert says:

    All said and done. Henry, the list of metrics you were looking for, it’s done and dusted…
    Best Gert Staal

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