Performance Metrics and Innovation

Performance Metrics and Innovation
April 9, 2019 admin
Employee Performance Metrics, Innovation

There is a natural conflict between standard employee performance metrics and innovation.

Being Silicon Valley’s longest serving CEO I have found this conflict an interesting topic, and one I have wrestled with for years. In tech, where my company Micrel was involved, perpetual innovation was essential. But so too was assuring normal corporate functioning.

The nature of the conflict

Employee performance metrics are mechanical, bureaucratic, and standardized. Innovation is none of that.

Indeed, innovation comes through radical thinking and exploration. Innovation requires thinking outside all of the boxes. It involves exploring the unknown. It employs inspiration, insight, and even some seemingly reckless intellectual adventurism.

Innovation is in a way immune to management by objectives (MBO).

The wrong way

Clearly, two things are not going to work in a corporate setting when it comes to facilitating innovation while simultaneously not allowing employees to run amuck.

First, you cannot measure innovation using traditional employee metrics. Such metrics tend to be specific whereas innovation is most often non-specific, much less predictable or obtained through a supervisor’s direction. Though you should encourage innovation from all employees, you have a select few whose job it is to be innovative – to create new technologies, products, market-breaking disruptions. Directing them to increase their innovation output by 10% is silly.

But likewise, you cannot hand them wads of cash, leave them unsupervised, and hope that their genius leads to innovation. They need to have goals and some rational criteria for acknowledging success. One counterpoint to this can be found in higher education – some universities have done away with traditional grading systems, leaving tuition-paying parents wondering if investments in their children are paying any dividends.

Goals are the goal

The middle point revolves around goals. Yes, the standard “A” through “F” grading system allows for goals to be set, even if the goal is modest, such as not flunking. For innovation-focused employees, goals cannot be so rigid. It requires a different approach to nurture innovation without letting go of the reins entirely.

Some forms of goal setting, or defining boundaries for measurement, causes employees to think radically. Telling a researcher to cure cancer is not a goal, though it might be a mission. But setting a goal of “significantly dropping power consumption of mobile wi-fi semiconductors” is viable. The goal is framed by a specific set of boundaries.

Another way of setting a metric for innovation is through competition. Self-competition – bettering one’s own records – can only be assessed if there is an existing track record. But competition between employees with similar objectives, experience and fields of expertise is one option. So too is competition between your innovators and those in your competitors’ companies.

Radical is good

Since innovation is radical by nature, your metrics for measuring innovation have to be a little radical as well. In this sense of the word, radical means “thoroughgoing or extreme, especially as regards change from accepted or traditional forms.” Do not apply traditional metrics to innovation employees or teams. Instead, challenge yourself to commit some out-of-the-box thinking about what your company’s innovation goals are, then restating those goals to employees.

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