Exploring the Use of Innovation Performance Measurement to Build Innovation Capability in a Medical Device Company

In order to increase their innovation capability, many organizations make the effort to actively change their R&D working practices. In parallel, measurement is an important issue with regard to managing innovation. In this paper, innovation management and measurement theory are combined with empirical investigations of experiences of using measurement as a support to the development of innovation capability in practice. The paper reports results from analysis of measurement data and a semi‐structured interview study, encompassing 19 interviews with managers and engineers involved in the current change activities of the case company. The study reveals that various innovation measurement mechanisms are used in different departments in the R&D organization, reflecting the diverse views of what constitutes innovation that dominate in each group, as well as the group's level of involvement in the on‐going building of innovation capability – from heavily involved (innovation leaders) to attentiveness from a distance (innovation laggards and progress evaluators). This, together with challenges related to identifying relevant metrics to support both incremental and radical innovation and managing existing reward and goal‐setting systems, is seen to have implications on the capability development in the organization requiring attention to how innovation measurement is designed, implemented and used in practice.