How Should You Measure Innovation?

You get what you measure, or so the management gurus tell us. Unfortunately, you also get things you didn't count on. When it comes to biomedical and health innovation, there seems to be some confusion and disagreement that makes it hard if not impossible to measure results. Consider:

1. The definition of innovation. There are many. Mine is 1)doing something new or something old in  a new way that 2)creates a user defined multiple of value when compared to the competitive offering or the status quo that 3) is enough of an incentive for users to switch from what they are doing now to your product or service.

2. Who does the measuring. Most engineers, doctors and scientists think their perception of value has meaning when, instead, it is irrelevant and misleading. The only metric that matters is how the end user perceives the value.

3. The scope of the metrics. Financials alone do not tell the entire story. Nor do the percentages of new product offerings over time. In sick care, the triple aim omits some stakeholders.

4. Considering innovation as an end instead of a means toward an end. The company or management are not the only ones who benefit. Patients should be the primary beneficiaries of innvation and , in many instances, it is hard to measure how and by how much. For example, does a cancer drug that costs billions to develop and costs thousands a month to buy but only prolongs survival 6 weeks an innovation?

5. Dividing the hype from the hope. How many times have you read or watched something in the last week that was "disruptive"?

6. Potential vs. real innovation. Some ideas have the potential to be innovative but, due to many factors, never see the light of day due to barriers to adoption and penetration.

7. Humans get in the way. Habits die hard. Patients and their doctors don't like to change. The moons are not in phase. The idea gets orphaned.

8. Why does it matter what we call it? Who cares if we call it an idea, an invention or an innovation? So what if something is incremental, an improvement or a "game changer"?  Because the sick care clock is ticking , there are limited resources and we need to place our bets on ideas that will give us the biggest bang for the buck, that's why.

9. Pushback. When you start measuring doctors and their performance, you can bet they will push back , claiming who does the measuring, how they are measured and what is being measured is not an accurate indicator of performance or a basis for compensation or other rewards. After all , they claim, medicine is as much , if not more art than science. How do you measure other artists and how they innovate?

10. Guesswork and assumptions. How do you measure the user defined value component of innovation when the end user, like patients, have neither the skills nor the data to do so?

When it comes to sick care, we need to stop tinkering and creating solutions looking for problems. How we keep score needs to be valid and consistent. We also need to consider that creating and measuring  meaning trumps measuring money .  We can't keep changing how many points you get for a field goal depending on how much time is left on the clock.

Arlen Meyers, MD. MBA is the President and CEO of the Society of Physician Entrepreneurs at www.sopenet.org