INTHEBLACK July 2026 - Magazine - Page 38
F E AT U R E
“A lot of organisations in stagnant markets have a
lower percentage [of innovation investment], which
is unfortunate. They are trying to use innovation
to cut cost or increase operational efficiency.”
JOE LOCANDRO, RIMINI STREET
BEYOND ROI
Organisations do not have unlimited resources
to fund innovation. Funding discipline needs
meaningful performance indicators.
The risk is turning to what is visible rather
than what is predictive. Best practice is to
adopt metrics that show validated learning,
scaled solutions or measurable outcomes.
Return on investment (ROI) is the obvious
indicator choice, but the challenge is knowing
when it should be applied. “ROI is often
misapplied when used as the primary decision
filter for innovation portfolios,” Jayalath says.
Too early, and projects could still be in
the learning phase. Too late, and it might
not provide enough time to influence
important decisions.
To effectively measure performance,
Jayalath suggests that metrics be drawn
from three stages: input, process and
outcomes [see breakout box]. These should
account for financial outcomes along with
non-financial drivers of long-term value.
The considerations are extensive. With
inputs, it makes trade-offs explicit, such as
where capital and talent are deployed and
not deployed. With process, it reduces
uncertainty quickly to improve learning
velocity over activity volume.
38 INTHEBLACK July 2026
For outcomes, it links to strategic outcomes
such as growth, productivity, resilience
or trust.
“Anything else is theatre,” Jayalath says.
CRITICAL METRICS
When organisations undertake innovation,
positive outcomes can often prove elusive
despite good intentions and adequate funding.
Experienced transformation leaders such as
Joe Locandro, executive vice president and
global CIO at Rimini Street, see common
pitfalls that derail innovation efforts.
“Some companies measure innovation
by the number of ideas generated or by
the number of activities,” says Locandro,
who warns that collecting suggestions
without a structured methodology can
lead to poor outcomes.
Workshops, startup meetings, pilots
and even small seed investments create
visible “innovation buzz”, but he suggests
that finance and business leaders focus
on more meaningful metrics such as
the number of new initiatives adopted,
or financial outcomes such as direct
profit-and-loss impact.
At a time when macro-economic shocks
are becoming more disruptive and more
frequent, Locandro says time-to-market
and the opportunity cost of pursuing
innovation projects are critical metrics.
“Two- to three-year
innovation horizons
used to be acceptable.
