Innovation (whether the investment is in a formal innovation program, capital outlays for specific R&D, leadership training, or simply time and attention) is NOT free. There are costs involved. But what is the return? Obviously we get RESULTS from innovation (better market position, delighted customers, novel products, and better processes), but what else?
RESULTS are the key reason to do innovation, but there are at least TWO MORE key benefits leaders should be aware of: inclusion and relevance.
INCLUSION: A Harvard Business Review article notes 40% of people say that they feel isolated at work. If that was true in December of 2019, what about now?? Done right, innovation will bring in voices from across the organization to solve key issues. People want to contribute, they often just need a way to do it and innovation is an excellent vehicle for that.
RELEVANCE: A survey for The Wall Street Journal in May found that 26.7% of nearly 2,000 respondents agreed with the statement, “I’m not considered essential or don’t think I am, but I’m still working. My work doesn’t feel particularly important or meaningful.” What a shame. And what an opportunity! Innovation is a great way to show people how they can contribute meaningfully again. People want to know that their work matters and getting them involved with raising the bar is an excellent way to do that.
IRR is a great tool for financial analysts to see the value of investments. With innovation, I would suggest using I+R+R (Inclusion+Relevance+Results) to get the full picture of the return for the innovation dollar.