7. Innovation Impact and Metrics

Innovation Impact and Metrics

Authors: Ted Tabaka

“The heart and soul of the company is creativity and innovation.” – Bob Iger

I would like to start with the quote above, because innovation is measured differently from company to company. Innovation is something that is difficult to often measure. The one thing that is shared amongst all of the companies is innovation through creativity. The key difference behind Silicon Valley companies and other parts of the world is how these companies harness innovation. By relying on each companies teams and culture, they are able to have an impact on innovation on a company, customer, and global level. Innovation is done on a societal level, and it is measured in a varying different set of ways that can difficult to fully understand why certain ideas are successful and others fail.

Innovation Impact onĀ Culture


In simple terms, innovation is hard. For us to understand the impact or metrics behind innovation we must first understand the groundwork for innovation. For innovation to happen it has to come from an idea, and ideas come from communication. Innovation can come from everywhere. There is a network effect that happens.

The key to innovation is to have the least path of resistance. This is represented by the culture. Where companies like Google will provide for all the needs of an employee or provide for an employee’s’ needs. Innovation is something that happens in the moment. It is a shared ecosystem where creativity thrives, and inspiration lives.

Innovate or die. How do companies measure innovation, and what impact does innovation have on a company? When visiting Silicon Valley the most successful companies with the best ideas understand and cultivate innovation. For many Silicon Valley companies culture, the quote of innovate or die was prevalent across many startups. For more established companies, innovation was still an important part of the company, but one could see the value of innovating was not as important as other business strategies. Everything came down to the culture. Each company had a unique twist to how they innovate, and it was because of the culture that allowed this to breed into great ideas. For a company’s culture, metrics are something that are not as important as the idea and the implementation of this idea. Innovation can stall within the moment or lose it’s impact overtime. It is very important that these companies identify when innovation is not happening or suffer a loss of business. There are consequences for not innovating. Companies can lose market share, not receive round funding to keep the product alive, or at worst case become bankrupt. A typical Silicon Valley company is one that constantly show advancement through customer (business or consumer) interaction. This advancement is a metric in itself that can be invisible, hidden, and unseen to a company, but is very important.

Innovation Impact on the Employee

Innovation happens from the bottom. People are your most important resource. The lowest level of the totem pole can shape a company. For companies like Google that have a corporate chain that can sometimes hinder innovation, but they have the resources and capital to launch these ideas. They also have the understanding and full control of the code base. Changes can be done on live code, and immediately. While many changes are only done with one percent of the user base, it is still something that affects a large population of customers.

Great people lead to more innovative ideas. One similar characteristic that was shared across these companies and cultures was the aspect of hiring great people. The people in this group are the ones that have the most impact on innovation and the company. These innovative ideas typically come from the engineers and the people working from the bottom. That is not to say that they cannot also come from the top, it is important to know that all employees of a company are valuable. The employees work toward a project, because they want to see the project succeed.

Co-location, co-opetition (cooperative competition), sparse desks, trust, and open minds can lead to innovation. However, this is something that it not a shared value amongst all Silicon Valley companies. Again, everyone can be innovative, but a person must be able to work well with the business and the culture to come up with the next big idea.

Necessity as a metric. Where we saw the most innovative ideas were from start-ups and small companies. As the company grows they may lose the idea of innovation. For something to be innovative it has to be something that comes from necessity. Not only must an idea have a niche market, but be able to fill a use or a void that the business or customer requires.

Delivery is important. The impact and metrics behind an idea are not as important as how the idea is delivered. Great ideas could be the best thing in the world, but if they cannot convince most of the people that it is the next best thing than that idea is bound to fail. The employee must be able to show that the idea is something worth delivering.

Innovation Impact on the Company

Financing is not a metric in Silicon Valley. The key to innovation within Silicon Valley is not so much about numbers or metrics that are valued as in other companies. That is not to say that metrics are not important, but innovation metrics is not always a number or financing game. This is one biggest differences between large companies and startups. Large organizations have the capital and money to burn and to build out that one great idea. However, that does not mean startups also do not have the resources to compete with larger companies. Many startups will have venture capitalists to sponsor and provide capital for an idea. The key is that venture capitalists will see a return on investment, future progress, or impact. It is not always about the money, but the value that is driven in Silicon Valley.

It is not about the number of ideas being generated. If you have a thousand ideas, do they have the same impact as one great idea? For every thousand ideas a few of them might be gems, but this is not a numbers game. Everyone can come up with an idea, and every idea has already been thought about. The key is how these ideas are adopted and presented to others.

Innovation Impact on the Customer

What does the customer want? This is the hardest question to answer for Silicon Valley companies. And in many cases these companies do not know who their customer really is? That is not to say that the innovative idea is not important, but correct targeting can change the metrics that are needed. For example, Remind’s customer base was focused primarily on students. There was very little impact and market to develop the idea further for students. Rather than focusing on students, there was a change to focus on teachers as the new customer. Currently Remind is the market leader, because they are fulfilling a void that no other provider has yet filled.

Failure as a Metric

Fail fast! That is the mantra of Silicon Valley.

Time is a metric. This was one of the most important lessons for many Silicon Valley companies. The time to market can be a deciding factor for many Silicon Valley companies. For an idea to succeed it must be delivered on time and quickly. Software development is all about delivering content quickly. If one company cannot deliver early than other companies will build their own better ideas and bring them to market. Silicon Valley companies also must learn to adapt and change very quickly. As new features are rolled out to companies they must be adapted to meet the needs of the company. Many Silicon Valley companies used Agile methodologies and frameworks to achieve greatness quickly.

ROI. Will the idea generate any return on investment (ROI)? I will not cover round funding, but many venture capitalists (VC) will expect some sort of ROI for the product that is being developed. If a company does not have any ROI, than they will consider the company or product a failure. This ROI does not always have to be monetary value, but can be something that benefits another company, society, or a problem.

Competition as a Metric

Acquire and kill. For startups their goal is to get acquired for large sums of money, and for large organizations like Google, Microsoft, and Facebook are to innovate through acquisition. That is not to say that companies are not able to create a better product if built in house, but acquisition is far less costly than spending time and resources on a product that has already been built. Because these large companies will acquire rather than build, there is a loss of impact on innovation. Sometimes these ideas are bought for patents or other reason, and are killed off.


Each company visit had a different culture, impact, and understanding of how they should innovate. The key is what impact does their innovative idea bring to the company or the world around them.

For example, Quotient Tech (formally Coupons.com) took a laid back approach to how impactful they can be on their customer base. The CEO, Steven R. Boal, measured what they were doing at the time and realized that it would be best to wait for the market to better itself before coming up with a new idea. The key was not to continually push new ideas, but let the market decide how these ideas would be impactful. Because of this Quotient Tech is the leader in it’s field. They were in the right time and place to make the most impact in the industry. Other companies innovate in different ways. But there are a few things that mold and nurture innovation as are represented within Silicon Valley. Other parts of the world, including Chicago, are starting to make vast efforts in this startup mentality. Only time will tell how much companies are able to change, or progress as demand increases for more innovative ideas.