As the late mathematician Richard Hamming tartly observed, “The purpose of computing is insight, not numbers.” That’s also the goal of innovative metrics. The measure of the success of innovative metrics is how clearly they convey the value — and risks — of the innovation. Watt’s steam engines, P&G’s soap, and Intel’s microprocessors might well have dominated their markets without novel metrics. But for these businesses and many others, innovative metrics made selling their products to a large number of customers a much less difficult prospect. Indeed, as many innovators are learning, oftentimes the best way to take the measure of a new market is to create a new measure for the market.
Michael Schrage, a contributing editor of strategy+business, holds appointments at MIT’s Sloan School of Management and London’s Imperial College. He was previously a Washington Post reporter and a columnist for Fortune and the Los Angeles Times.