Innovation Center To Measure The Bottom Line Impact Of Encouraging Employee Innovation

Innovation Center To Measure The Bottom Line Impact Of Encouraging Employee Innovation

UNIVERSITY PARK, PA—Some of the best new business ideas reside with company employees. Well-known examples are the inventions of Pampers diapers and Post-it Notes. Yet, it's surprising how few companies have established a systematic process for identifying and nurturing employee innovation. The Farrell Center for Corporate Innovation and Entrepreneurship in the Penn State Smeal College of Business has entered into an agreement with Imaginatik, the leading idea management company, to measure the impact or return on investment from employee "grass roots" innovation using the company's software and database technologies.

"Ideas are the only true source of unlimited competitive advantage for companies, and companies who effectively tap into the brainpower of their workforce reap the benefits in terms of revenue growth, process improvements and cost reductions," says Mark Turrell, CEO of Imaginatik. He adds that according to the U.S. Department of Labor, only 6 percent of the work force is engaged in creative occupations, implying that there is a great opportunity to leverage the innovation potential of the remaining 94%. Every person in the organization can contribute valuable ideas in diverse areas of the business. Yet, frequently this potential remains untapped due to a lack of appropriate methods for capturing and developing promising ideas. A survey of 350 organizations found that less than 15% of companies have any IT systems in place to manage innovation, and only 40% have established any formal procedures (Source: CBI and 3M Innovation Survey, 2000). For more information about the company visit www.imaginatik.com .

"This agreement with Imaginatik will put the Farrell Center for Corporate Innovation and Entrepreneurship at the forefront of idea management research for corporations and other organizations," says Dr. Anthony Warren, director of the center. He adds that center research will examine data collected using idea management software developed by Imaginatik to identify behavioral patterns such as teamwork, idea sources, innovative culture, etc. This will allow the development of financial models to quantify the return on investment of employee innovation, which has been very difficult to measure in the past.

Companies are looking for ways to become more competitive through innovation. Instead of asking a few in the R&D and marketing departments to come up with the next "Big Idea," which is often hard to find, more companies are actively engaging their workforces as a source of ideas.

Developing the understanding of how enterprise idea management work promises tremendous benefits to corporations. According to Marsha McArthur, innovation manager at Bristol-Myers Squibb, "The important point is you're still collecting the one or two ideas that could make the difference between winning and losing in an extremely competitive landscape."

The Farrell Center was formed in 1992 through an endowment from Michael J. Farrell. The center has three major roles within the Smeal College of Business: creation and management of educational programs in corporate innovation and entrepreneurship, research, and outreach. The center's mission is to contribute to and interpret the best in academic research in the fields of entrepreneurship including innovation and knowledge management, and to translate this into actionable best practices in the commercial and government sectors. Entrepreneurship is treated as a fundamental management discipline that can be applied at any enterprise scale, from start-ups to global corporations. Of particular interest is the role of "entrepreneurism" in networks of corporations as well as in so-called virtual corporations where the interfaces between existing enterprises become blurred. For more information about the center visit www.smeal.psu.edu/fcfe .

Anthony (Tony) Warren of the Farrell Center can be reached at 814-865-4593 or twarren@psu.edu . Mark Turrell of Imaginatik can be reached at 617-275-7140 or mark_turrell@imaginatik.com

Back to Latest News