Innovationeering: What's your (innovation) number?

In this age of near-exclusive reliance on electronic communication, practically nobody asks for your number any longer — we just text, email or AirDrop critical identifiers.

However, some of us still must record our activities numerically, and innovators are certainly not immune from exchanging numbers — usually with interested leaders or colleagues, for the purpose of benchmarking.

In fact, if one is to operate a legitimate innovation function, it must be metrics-driven. To borrow a phrase from my quarter-century as a team physician in professional sports, "It's not a game until you keep score." We should celebrate the fact that innovation has arrived at a status where it's recognized as a discipline that can be reduced to indices and indicators. 

As an innovation leader, what numbers should you follow, and what are their meanings? Here is my perspective and some insight on what you can learn from following the objective exhaust of engaging a creative population with a structured innovation architecture.

The usual suspects

In 2013, our group at Cleveland Clinic Innovations, in collaboration with the now-defunct Council for American Medical Innovation, chronicled the innovation practices of about 70 academic medical centers and research universities in our publication, The Medical Innovation Playbook. Aside from the dossier on each unit, we summarized key objective parameters in an attempt to level-set the evolving innovation ecosystem and compare apples to apples. 

Here are the elements we tracked in the "By the Numbers" section:

  • Full-time employees in the innovation unit
  • Number of startup companies
  • Number of invention disclosures
  • Number of licenses/options
  • Number of patents
  • Annual licensing revenue
  • Relative distribution of disclosures — drug, device, diagnostics, software, biologics and "other"

This portfolio represents a basic checklist that all of us should be maintaining to monitor our institutional insinuation and operational effectiveness.

Innovation expenses

Not mentioned in our publication, but pertinent to all of our balance sheets, is expense-side economics. The two major line items of which we all must be aware are personnel expenses and operational expenses. Typical drivers of the latter are legal (patent-related and business spinout) expenses and biomedical engineering.

Increasingly complex formulae are being introduced to evaluate innovation performance and importance, but a broad statement that likely still holds true is that many technology transfer officers still operate in the red. Despite being vital for our future (and present), the return-on-innovation remains difficult to achieve and prove.

The others

I've articulated my bias toward transitioning even historically subjective parameters to objective data, and the "soft" science of understanding innovation impact is solidifying. The way to make it more concrete is to record and track parameters like inventor satisfaction, leaders' and constituents' views of your institutional innovation function and job creation statistics, focusing on your community economic development impact.

Argue for the influence of maintaining a robust innovation infrastructure on talent recruitment and retention, and for patient preference for a "cutting-edge" enterprise. Granted, these factors are hard to quantify, but are nonetheless important to proselytize. 

Think of every corridor in which innovation is occurring or each locale it reaches, then find a way to quantify it.

The elusive "Innovation Quotient"

Although we have made great collective progress turning innovation into a metrics-driven practice, perhaps the most important number remains elusive — let's call it the "Innovation Quotient," or IQ. 

First, you pick the numerator: Try the number of disclosures or patents, or, better yet, the dollars they've earned. Now, choose your favorite denominator: perhaps the number of MDs or PhDs in your operation, or the level of external research funding.

No matter how you calculate it, this number doesn't actually matter. Institutions don't have an identifiable IQ that can be normalized across the industry. We all know of large organizations that aren't productive in the realm of intellectual assets, while some tiny institutions kill it in the creative realm. This is why I just don't buy into a calculable IQ.

Instead, I have learned that organizations have an "Innovation Fingerprint," a level of output that they generate once they've optimized their innovation apparatus. As they asymptotically approach this ethereal number, it wavers little, unless they gain or lose a large number of employees or a key innovator. I experienced it at Cleveland Clinic, where our number of quality disclosures ranged between 300 and 325 every year. This phenomenon was recapitulated when we coalesced the Global Healthcare Innovation Alliance and they accessed our mature processes — a subject for another column.

Conclusion

Our experience did allow us to develop instruments to judge "Innovation Maturity" (I'll cover the Medical Innovation Maturity Survey in another column). However, there is still much to learn about innovation capacity, how to stimulate it and the means by which it can be most efficiently and effectively developed.

This is one of the key pursuits in which all of us are engaged, and I credit so many colleagues for their past and ongoing contributions. We're closer, just not done yet. For all of those working on it, don't despair — you're not alone.

Lastly, if anyone has figured out how to reduce Innovation to a set of numbers, contact me. I'll give you my number!

Thomas J. Graham, MD, is a clinical professor and director of strategic planning and innovation in the Department of Orthopedic Surgery at NYU Langone Health. Dr. Graham, formerly the inaugural chief innovation officer of Cleveland Clinic, is the author of Innovation the Cleveland Clinic Way.

More articles on innovation:
How Kaiser Permanente & 2 more hospitals are spending innovation investment dollars
Providence launches global innovation center in India
Baylor adds healthcare innovation certificate to executive MBA program

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