A milestones is a really big name, I've always liked the meaning lying behind it.Imagine you are on a trip, and then you get to explore a territory you've never visited before, believe me, the first thing you need to do is to set milestone, to mark where you been last, so that whenever you find yourself getting lost in an odd road, you always know the way back to the last milestone. Now in business, setting clear milestones that indicate when the team expects to learn important insights about the innovation. These milestones help in assessing progress and making adjustments as needed.

Learning Milestones

Innovation accounting is a quantitative approach that allows us to see when we’re moving forward and when we’re spinning our wheels.

Well it's called the Key Metrics, Identifying and tracking specific key performance indicators (KPIs) that are relevant to the innovation project. These metrics often go beyond traditional financial measures and may include user engagement, customer feedback, or product usage data.For those whoe worked in customer service before, your KPI's are you average monthly performance indicators, how many calls did you get for how many minutes, how satisfied were the customers after every call, did you get enough surveys? What needs to be improved about your communication style? And so on and so forth.

What You Need To Measure? 

Innovation accounting is the process of defining, prioritizing, and measuring specific, actionable metrics that demonstrate how much progress a startup is making.

You build a minimum viable product MVP, which you will build, distribute and then assess it's results and learm from them. Okay look, Imagine you want to build an amazing treehouse in your backyard. The Build-Measure-Learn cycle is a way to make sure your treehouse turns out super cool. <ul><li>Build: First, you start by building a basic treehouse. It might not be perfect yet, but it's a start. You use some wood, nails, and your imagination to create it. </li><li>Measure: Now, you take a step back and look at your treehouse. You invite your friends over and see what they think. Do they like it? </li></ul>

Build-Measure-Learn Cycle

<ul><li>Learn: Based on what you've measured, you learn some important things. Maybe your friends say they'd love a ladder to climb up easier, or they want a place to hang a swing. You learn from their ideas and your own observations.</li><li>Improve: With your new ideas and what you've learned, you make your treehouse even better. You add the ladder and the swing because you know it will make it more fun. This step is about making changes to improve your treehouse.</li><li>Repeat: You don't stop there. You keep going! You might build, measure, learn, and improve several times until your treehouse becomes fantastic!</li></ul>

We're getting lost a bit here when we are bombarded with new info, i mean, what does methodology even mean?? Don't worry, let's simplify all of it. *Imagine you have a big puzzle to solve, but you're not sure which pieces fit together. Innovation accounting is like a special way of keeping track of how well you're doing in solving that puzzle.You just have to measure data after collecting it, and then learn from that measurement, change your strategies and plans if they are not giving you so great results after measurement, and most importantly, you keep trying

Hold On

Innovation accounting is a methodology used by organizations, especially in the context of startups and product development, to measure and track the progress of innovation initiatives. It helps teams assess the value of their ideas, products, or projects and make informed decisions about resource allocation.

Innovation Accounting. 

The central idea of the book is that startups should adopt a scientific approach to creating and managing products. Instead of developing elaborate business plans and launching products based on assumptions, Ries advocates for a process of iterative learning and experimentation.

Most startups fail. But many of those failures are preventable. The Lean Startup is a new approach being adopted across the globe, changing the way companies are built and new products are launched. Eric Ries defines a startup as an organization dedicated to creating something new under conditions of extreme uncertainty. This is just as true for one person in a garage or a group of seasoned professionals in a Fortune 500 boardroom. What they have in common is a mission to penetrate that fog of uncertainty to discover a successful path to a sustainable business. The Lean Startup approach fosters companies that are both more capital efficient and that leverage human creativity more effectively. Inspired by lessons from lean manufacturing, it relies on “validated learning,” rapid scientific experimentation, as well as a number of counter-intuitive practices that shorten product development cycles, measure actual progress without resorting to vanity metrics, and learn what customers really want. It enables a company to shift directions with agility, altering plans inch by inch, minute by minute. Rather than wasting time creating elaborate business plans, The Lean Startup offers entrepreneurs—in companies of all sizes—a way to test their vision continuously, to adapt and adjust before it’s too late. Ries provides a scientific approach to creating and managing successful startups in a age when companies need to innovate more than ever.

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Eric Ries is an American entrepreneur, blogger, and author of The Lean Startup, a book on the lean startup movement. He is also the author of The Startup Way, a book on modern entrepreneurial management.

RIC RIES

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Innovation accounting