INNOVATION MEASUREMENT

INNOVATION AND BUSINESS CONFERENCE 2015Jakarta, 1-2 July 2015

strategy | innovation | performance

RIRI SATRIAFounder and CEO – Value Alignment Advisory (VA2)

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My name is RIRI SATRIA

• President Director / CEO – Value Alignment Advisory (VA2) – since 2012.• Commissioner – Value Alignment Learning Institute (VALI) – since 2014.• Consultant – strategic management and organization development - since 1996.• Lecturer – Master of Information Technology – University of Indonesia – since 2004.• Lecturer – Master of Management – PPM School of Management – since 2000.• Expert Advisor – Strategic Management, Bureaucracy Reform, and IT – POLRI - since 2015.• Chairman – Alumni Association, Faculty of Computer Science, Univ. Indonesia – since 2011.

My Favorite Definition of INNOVATION

The implementation of a new or significantly improved products (goods or

services), or process, or marketing method, or organisational method in

business practices, workplace organisation or external relations.

(Oslo Manual 2005 – UNESCO)

Degree of NOVELTY

• NEW• SIGNIFICANTLY IMPROVED

• Diffusion• New to the firm• New to the market• New to the world• Disruptive innovations

AREAS of INNOVATION• Product innovation: introduction of goods or services that is new or

significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, user friendliness or other functional characteristics.

• Process innovation: implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, systems and procedures, equipment and/or software.

• Marketing innovation: implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.

• Organisational innovation: implementation of a new organisational method structure, decision making, career management, remuneration management, etc.

SCOPE of INNOVATION

• Business practices• Workplace organisation • External relations

What is INNOVATION ACTIVITIES?All scientific, technological, organisational, financial and

commercial steps which actually, or are intended to, lead to the implementation of innovations.

Some innovation activities are themselves innovative, others are not novel activities but are necessary for the

implementation of innovations.

Innovation activities also include R&D that is not directly related to the development of a specific innovation.

(Oslo Manual 2005 – UNESCO)

INNOVATION STRATEGY MAPwith Balanced Scorecard

INNOVATION TO THE ORGANIZATION RESOURCES

INNOVATION PROCESS

INNOVATION OUTPUT

INNOVATION OUTCOME

LEARN AND GROWTH

INTERNAL PROCESS

CUSTOMER

FINANCIAL AND BUSINESS SUSTAINABILITY

How to develop the INNOVATION MEASUREMENT?

Step 1 : DEFINE THE STRATEGIC OBJECTIVES OF INNOVATION.

Step 2 : PLOT THE STRATEGIC OBJECTIVES TO PERPECTIVES

Step 3 : DEFINE THE CAUSE EFFECT RELATIONSHIPS

Step 4 : DEVELOP KEY PERFORMANCE INDICATORS (KPI)

Step 5 : DEVELOP STRATEGIC INITIATIVES

Step 6 : ASSIGN AND CASCADING TO BUSINESS UNITS

EXAMPLES - 1PERSPECTIVES STRATEGIC

OBJECTIVESKEY PERFORMANCE

INDICATORS (KPI)TARGET

Learn and growth Having excellent creative task force

Number of creative people that we have

Average competency gap index for our creative people

10 person

Maximum 20%

Having community of practices (COP) for our core business

Percentage of community of practices (COP) to our field of business

80%

EXAMPLES - 2PERSPECTIVES STRATEGIC

OBJECTIVESKEY PERFORMANCE

INDICATORS (KPI)TARGET

Internal process Effective research and development strategy for product management

Numbers of new ideas for each research and development people

Percentage of accepted ideas by BOD to all new ideas

4 ideas per month

40%

Efficient service management with enterprise software

Total time and cost reduction of new business process

Time : xx hoursCost : IDR xxxx

EXAMPLES - 3

PERSPECTIVES STRATEGIC OBJECTIVES

KEY PERFORMANCE INDICATORS (KPI)

TARGET

Customer Increase customer satisfaction for our new services

Customer satisfaction index

60% 80%

Develop products that have high demand in market

Acceptance level for our new products by market in experiment

85%

EXAMPLES - 4

PERSPECTIVES STRATEGIC OBJECTIVES

KEY PERFORMANCE INDICATORS (KPI)

TARGET

Financial and business sustainability

Effective investment in research and development

ROI in research and development

40%

Produce valuable products to the market

Economic value added (EVA) of our new products

IDR xxxx

CLOSING REMARKS

INNOVATION TO THE ORGANIZATION RESOURCES

INNOVATION PROCESS

INNOVATION OUTPUT

INNOVATION OUTCOMEStrategic objectives

KPI / Measurement

Strategic objectives

KPI / Measurement

Strategic objectives

KPI / Measurement

Strategic objectives

KPI / Measurement

THANK YOU

PT. Solusi Inovasi DayagunaMenara Rajawali level 7-1, Jl. DR. Ide Anak Agung Gde AgungKawasan Mega Kuningan, Jakarta Selatan 12950, Indonesia

Riri SatriaCEO and Lead ConsultantValue Alignment Advisory

My gateway : http://about.me/ririsatriaMy Linked-In : ririsatriaAdd me on Facebook : ririsatria.va2Follow me on Twitter : ririsatriaRead my blog : http://ririsatria40.wordpress.comAlso my blog : http://catatandosen43.wordpress.comSend me email to : ririsatria@gmail.comWhatsApp / sms text : 081386643706