Organizational creativity and innovation have proven to be challenging concepts to measure. There is not a particular output that indicates organizational levels of innovation. To flourish, innovation and creativity must be fostered within the organization. They must be established as cultural values in order for the organization to see the benefits.

Directions

Write a paper evaluating business metrics for innovation. Although business metrics generally measure indicators or outputs of an organization’s culture, we can find correlations between some business metrics and the quality of an organization’s innovation culture. Review the table shown below and answer the following questions.

Specifically, you must address the following rubric criteria:

1. Evaluate the metrics in the table and whether each metric is an effective measure of innovation and creativity.

A. Could the metric be an indicator of innovation or an indicator of whether the innovation is incremental or discontinuous?

B. While evaluating research and development (R&D) headcount, address whether this metric is an indicator of innovation or labor efficiency.

C. What would it mean if any of these metrics increased over time?

2. Evaluate and select which company (INAGG, Inc. or AMMB, Inc.) is most likely to have a culture that supports innovation and creativity. Consider the following:

A. How might non-R&D staff time dedicated to experimenting with new products be an indicator of an innovation culture?

B. Identify scenarios where having a higher number of patents would not be a reliable indicator of an innovation culture.

3. Discuss the ability and limitations of using business intelligence (BI) and the metrics provided in the table to measure an organization’s ability to innovate and foster employee creativity.

A. What are the limitations of the metrics you consider the most effective indicators of an organization’s innovation culture?

4. How can using a combination of metrics help resolve some of the limitations?

A. How can business intelligence (BI) be used to evaluate and address the limitations of metrics?

Metric

INAGG, Inc.

AMMB, Inc.

Number of active products

12

6

Research and development (R&D) budget

$10M

$14M

R&D headcount

52

33

% of sales from products introduced in the past four years

15%

35%

Number of new products launched in the past four years

7

3

Employee time dedicated to experimenting with new products

Not tracked

10%

Number of patents in the last four years

7

23

Note: Both companies are in the same industry and make similar products. They have the same number of total employees, revenue, and length of time in business.

What to Submit

Submit a two-page Word document with double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited in APA format.