Performance management in the product innovation process lessons for australian smes

The management of innovation for competitive advantage has been under intense scrutiny over the last decade. Organisations increasingly look to develop new products both as a wellspring of renewal and a source of high profits. For organizations to survive in the long run, they must not only be efficient, they must also be innovative. There has been a shift in perspective, that saw innovation activity as discrete, and confined to a narrow. section of the organization. It is now seen as a process that impacts on the organisation as a whole. Improving the innovation process requires that we can measure its effectiveness, and the impact of any changes. This paper reports on research conducted using a questionnaire based on the CIMA research and focuses on performance measures in several Australian SMEs. In reviewing the use of performance measures our findings indicate that the firms used performance measures to evaluate the success or otherwise of their projects are taking little notice of their process performance. This is consistent with the traditional approach of using performance measures to monitor and controL However we argue that in the context of continuous product innovation, performance measures would be better used as process drivers, or levers, to encourage the desiredleaming behaviours.