Development of a Technical Innovation Audit

Abstract

Measuring performance is helpful, but it's only part of the story. To learn from our past successes and failures, we need to understand how they came about. To continually improve, we must examine not only our innovation performance, but the processes with which we develop and exploit these innovations. Vittorio Chiesa, Paul Coughlan, and Chris Voss present a framework for auditing technical innovation management. Their auditing methodology goes beyond performance measurement by highlighting problems and needs, and providing information that can be used in developing action plans for improving performance. The foundation of their audit methodology is a process model of technical innovation. The model addresses the managerial processes and the organizational mechanisms through which innovation is performed. Underlying this method is the notion that success in innovation is related to good practice in the relevant management processes. The model identifies four core processes: concept generation, product development, process innovation, and technology acquisition. Supporting these core processes are three enabling processes: the deployment of human and financial resources, the effective use of appropriate systems and tools, and senior management leadership and direction. The outcome from these core and enabling processes is performance in terms of innovation and the resulting competitiveness in the marketplace. This model provides the basis for a detailed audit of current innovation practice and performance. The audit has two dimensions: the process audit assesses whether the processes necessary for innovation are in place and the degree to which best practice is used; and the performance audit focuses on the outcomes of each core and enabling process and of the overall process of technological innovation and its effect on competitiveness. The performance audit helps identify needs and problems, but it doesn't explain why gaps exist between current and required performance and it doesn't provide an action plan for closing these gaps. The process audit meets these needs. The audit methodology uses a two-level approach: a rapid assessment based on innovation scorecards and an in-depth audit. These scorecards provide an overview of the company's strengths and weaknesses with regard to technical innovation management, highlighting those areas that require in-depth examination. The in-depth audit identifies not only the processes, but the areas within each requiring attention.