The process of innovation results in creating new products and services; therefore, improve organizational competitiveness. Depending on the industry,
there is a need to determine the best means for measuring the
implemented innovative processes. Consequently, measuring innovation includes the
past, present performance, and expected or future innovation potential levels.
The first valuable measure of innovation is a project’s risk-adjusted figure for net
present value and the possible returns on investment. The management must always
endeavor to ensure that their organizational commitments have a longstanding future, based
on some valuables such as project viability. If the proposed or current investment is not
viable, and its net present value is not encouraging, then the innovation venture should be
abandoned. Therefore, a project’s return on investment must always take the shortest period
possible (Arshi, 2017). If these determinants are not followed and used in organizational
processes, then some of the innovations might be resource consuming but not viable and
promising for the firm.
The second measure of innovation that should be used is the change in earnings or
revenue generation after a new organizational or production process has been implemented.
The management should then measure its performance against the past and projected
expectations. The same variable should be determined based on average industry
performance to assess whether the innovative process puts the firm in a competitive position
or not. If this measure of innovation is accomplished, the administration will understand
the need to set targets before looking for possible innovative processes for
implementation. It means that the standards of design are relatively valuable for
organizational operations and decision making. They guide in setting appropriate
measures and dynamics that must be attained for a firm to become and or remain competitive.