Unravel the mystery of Innovation Accounting, a game-changing approach to business metrics. Discover its essence, its potential to revolutionize your business strategy, and the practical steps to implement it. Let's delve into this transformative realm of financial management.
“Innovation Accounting” (IA) is a way of evaluating progress when all metrics typically used in an established company (revenue, customers, ROI, market share) are effectively zero
It provides a framework of chained leading indicators, each of which predicts success.
- It’s a focusing device for teams, keeping their attention on the most important assumptions they’ve made about their project.
Innovation Accounting
A way for teams to track progress and communicate in financial terms
- Useful for seeing how projects are changing over time
- Summarizes disparate initiatives using a common vocabulary and accountability framework
- Eric Ries, author of The Lean Startup, shares his perspective on how to proliferate entrepreneurship throughout larger organizations
Did we do what we said we would do?
Are our people working differently, do customers recognize and improve, and are we unlocking new sources of growth as a company?.
- To truly transform our organizations and our way of working, we need to change our accounting systems
Which metrics are improving over time?
Use the dashboard to hold your team accountable
- Example: Level 1 dashboard looking at the first experiment done by a team building a lemonade stand and hoping for hypergrowth through the use of drone delivery and premium ingredients down the road
