Measuring innovation project performance - a holistic study of current practices and implications in Swedish large-sized companies

Abstract: The field of innovation has gained increased attention in later years. As an enhancement for growth, innovation is of high importance for companies to pursue in order to stay competitive. Prior research has highlighted the need for measuring and evaluating the performance of innovation efforts, but it has proven to be a challenge for many companies to manage. In addition, little research has been conducted on a project level, although innovation projects have a significant impact on the overall innovation performance. In this matter, large-sized companies are of particular interest due to their structured innovation processes. Therefore, the purpose of this study is to explore how innovation project performance can be measured from the perspective of large-sized companies. This is done by identifying current practices as well as potential challenges to discover how measurement of innovation project performance can be managed. The study is conducted qualitatively on a sample of twelve Swedish large-sized companies, with empirical findings collected through semi-structured interviews with innovation managers and experts within the field of innovation. In addition, a narrative literature review is conducted combining the fields of innovation management, performance measurement and project management, which provides the foundation for secondary data. The literature review and the empirical findings are analyzed using thematic analysis to answer the proposed research questions. The findings of the study suggest various current practices of measurement, where five categories of metrics are identified, each with both benefits and drawbacks. Several challenges, as well as factors such as strategy and top management demand, are suggested to impact how measurement can be done on a project level. Finally, the study concludes that there is no best way to measure the performance of all innovation projects, as exemplified by a variety of practices identified. Instead, measurement can be carried out in numerous ways, and for practitioners the importance lies in finding purposeful metrics that are suitable for each project. Here, the findings of the study can help navigate throughout the journey of selecting the right metrics.