Measuring Innovation Capability in Technology-Focused Development

Paper in proceeding, 2010

Product development in the aerospace industry is associated with relatively long lead times and product lifecycles, which means that it takes years and even decades to find out if a novel product or technology concept fully realizes its potential and becomes an innovation on the market. How can a company in such an industry context know, preferably already in the conceptual stages, that they are on the path to innovation? How do they know how innovative they are? How can they increase their innovation capability? A project together with Volvo Aero, an aero engine manufacturer, was initiated to explore potential answers to these questions. The paper reports on an ongoing study of the company’s current state-of-practice with regard to measuring innovation capability, starting from a range of innovation indicators provided within a previous research project, which Volvo Aero contributed to. Based on interviews with project managers of advanced engineering projects within the company, six areas were found to be of importance in order to more effectively measure the innovation capability at Volvo Aero: Project selection, Customer involvement, Interaction between functions, Team climate, Innovation methodology and Innovation rewards. Within these areas a selection of preliminary metrics was established, which will be presented in this article along with a discussion on the advantages and drawbacks of combining activity and effect measures to better relate particular activities to particular outcomes.