The theory is simple. A senior manager hoping to influence behavior has no stronger lever than his or her choice of measures. Measures serve as tangible guideposts that help middle and junior managers make the critical on-the-ground resource-allocation decisions that--more than any senior management fiat-- ultimately determine a company's innovation strategy.
The challenge for companies seeking to improve their ability to create growth through innovation is that the metrics that many companies use to measure innovation run a high risk of actually leading companies in the wrong direction. Managers hoping to unleash their innovative potential need to be mindful of critical measurement traps, think about creating a widespread set of metrics, and ensure their executive dashboard constantly monitors the innovation metrics that matter most.
Source: Chief Executive, http://www.chiefexecutive.net