In today’s episode of the Idea to Value podcast, we speak with author Dan Toma about the concept of Innovation accounting. Dan is the founder of Outcome and the co-author of the Corporate Startup.
We go through how companies should measure innovation performance, and which Key Performance Indicators (KPIs) actually make sense for these types of projects.
Topics covered in today’s episode:
- 00:01:30 – Dan’s history in entrepreneurship
- 00:03:45 – Why accounting is overrated. It cannot tell you what to do next. It is like driving a car but only looking backwards in the rearview mirror.
- 00:05:00 – The aspects which create a successful innovation culture are found nowhere in the accounting books.
- 00:08:00 – Instead of just focusing on inputs and outputs, innovation relies on understanding the process
- 00:09:00 – Innovation cannot provide information on what has not yet happened, making questions around “Return on Investment” impossible to predict
- 00:14:00 – Which KPIs and principles work for an innovation accounting system
- 00:19:30 – What is learning velocity?
- 00:22:00 – Assessing risk and managing multiple innovation projects across a portfolio