What are the best ways to measure short-term and long-term innovation goals?

1 Short-term innovation goals

When setting short-term innovation goals, it's important to make sure they are SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. Examples of such goals include launching an MVP and collecting feedback from 100 customers by the end of the quarter, increasing the conversion rate of a new feature through A/B testing and user interviews within six weeks, or reducing the cost of production of a product by 15% within three months. To measure these goals effectively, you need to use metrics that reflect the key performance indicators (KPIs) of your projects or experiments. These can be quantitative or qualitative and could include revenue, customer satisfaction, retention, adoption, engagement, or efficiency.

2 Long-term innovation goals

Achieving long-term innovation goals typically requires several years or decades, and they are usually related to an organization's vision, mission, or purpose. These goals should be BHAGs: Big, Hairy, and Audacious Goals. Examples of long-term innovation goals include becoming the market leader in a new industry by 2030, solving a global problem by 2050, and creating a culture of innovation that encourages continuous learning and improvement. To measure the success of these goals, metrics such as market share, brand awareness, customer loyalty, social responsibility, or environmental sustainability should be used.

3 Balancing short-term and long-term innovation goals

Balancing short-term and long-term innovation goals is essential to aligning your overall innovation strategy and portfolio. The Three Horizons Model categorizes your innovation efforts into three categories: Horizon 1 for core innovations that optimize current products and generate immediate revenue, Horizon 2 for adjacent innovations that extend existing capabilities and generate medium-term growth, and Horizon 3 for transformative innovations that explore new opportunities and generate long-term disruption. By using this framework, you can assign different short-term and long-term goals to each horizon, allocating resources, time, and attention accordingly. For example, short-term goals could be set for Horizon 1 (e.g., increasing customer retention or reducing operational costs), while long-term goals could be set for Horizon 3 (e.g., developing a new business model or entering a new market). Additionally, intermediate goals can be set for Horizon 2 (e.g., launching a new product line or expanding to a new region). Focusing too much on either short-term or long-term goals can lead to incremental improvements or unrealistic expectations respectively; therefore, it's important to strike the right balance.