Design Management Group

Metrics

Provide numerical measures of the performance of the product development system.

Description

Metrics provide a numerical measure of some aspect of the product development system. They can be applied at several levels in the system, from departmental or project level to aggregate or business level.

There are conflicting opinions on the value of metrics, e.g. the rather cynical "you get what you measure" or the more positive "what you don't measure you can't control".

In innovation, common performance measures are

• percentage of total revenue derived from products released in the last 1/3/5 years
• time-to-market (e.g. time from project start to product launch)

These are lagging indicators as they measure what happened in the past. Leading indicators, measuring what's happening now, are also useful but less reliable predictors of future success. Some examples of these might be

• R&D spend as a percentage of sales
• number of ideas entering the front end of the innovation process
• percentage of time/budget allocated to 'entrepreneurial' activities
• number of current project tasks completed on time
• number of patents filed
• number of bugs found / fixed
• time spent in training or exploring new techniques

Further information

Githens, G (2003) Relevant metrics improve NPD performance , PDMA Visions magazine