Project Background

Innovation Scorecard is a conceptual performance measurement and management control framework specifically designed for work activities that relate to innovation. Its origin lies in the outcomes of a primary research project that was supported by the Czech Scientific Foundation during 2013-2015. This research’s primary objective was to ascertain whether organizations in the Czech Republic measure the efficiency of their innovations and what metrics they applied to measure these. Results confirmed that organizations who constantly managed innovation were engaged in identifying performance measurements to determine the level of value and benefits associated with innovation. When applied appropriately and in accordance with existing company strategy, marketing drives and HR/corporate policies, processes and procedures, innovation metrics provide managers and employees with opportunities to plan, organize, monitor and control all innovation activities for the benefit of the organization they work for.

 

The Innovation Scorecard was proposed as an excellent solution to support these activities and to create the basis for improved business decision making. It aligns and integrates innovation management and recognized/proven management control approaches (see Table below).

 

Method

What (Author)

Balanced Scorecard
  • Balance between financial/non-financial metrics, short/long-term goals (Kaplan & Norton, 1996)
  • Sequence “Aim – Cause&effect – Metric – Target value“ (Horváth, 2002)
  • Scorecard design (Niven, 2014)
  • Number of metrics max. 16 to 25 (Kaplan & Norton, 1996)
  • Casual links – strategy maps (Cokins, 2009)

Innovation
  • Innovation process (Bessant & Tidd, 2011; Davila et al., 2013; Fagerber et al., 2005; Skarzynski & Gibson, 2008)
  • Input – Process – Output – Outcome Model (Brown, 1996)
  • Stage Gate Model (Cooper, 1998; 2008)
  • Open inovace (Chesbrough, 2003)

Project management

Doležal et al. (2012), Kerzner (2013), Wingate (2015)

KPIs design

Bourne et al. (2003), Neely et al. (1996), Niven (2014), Parmenter (2015), Person (2013)

 

The next logical step was to implement the concept of Innovation Scorecard in a particular organization in order to verify its suitability and functionality. A project proposal for the practical roll-out of an Innovation Scorecard system within an existing company in the Czech Republic (Red Hat) was submitted and supported by the Technology Agency of the Czech Republic.

 

The aim of the new project is to validate and verify the outcomes from an initial inaugural research project, namely an innovation management control framework called Innovation Scorecard. The company where this initial roll-out will be applied and tested is Red Hat Czech s.r.o. The subsequent transfer of lessons learned/gained knowledge and experiences to other businesses in the IT industry is crucial to the success of this project. The IT industry has been chosen for the initial pilot study as it is one of the most innovative and dynamic industries in the Czech Republic.

 

The duration of the project is 3 years during which best practices in the IT industry will be identified and several associated case studies will be developed accordingly. These will be promoted by Brno University of Technology, Brno Regional Chamber of Commerce and Red Hat Czech s.r.o.

 

The implementation of the Innovation Scorecard will contribute to improving the efficiency, economies of scale (operational level) and the ultimate competitiveness of organizations in the IT industry.

 

The benefits arising from this project:

  • A summary of critical success factors relevant to innovation within the IT industry, with particular emphasis on software development
  • Key insights and management tools derived from the latest academic research, consulting companies’ publications and practitioners’ experiences
  • Best practice case studies that highlight the importance of management control systems in innovation approaches and their impact on organizational efficiency
  • An extensive discussion and sharing of knowledge and experience in the areas of development trends in innovation performance measurements and management controls
  • A road map that shows the management control system development steps that lead to the formation of an Innovation Scorecard
  • A list of applied and proven innovation metrics ready for application within companies that wish to adopt an innovation scorecard approach
  • Software support that aids decision making

 

This project will not deliver:

  • Step-by-step recipes or one-size-fits-all formulas pretending to provide universal solutions for innovation performance measurements and management control challenges companies face