AI Is Putting a Price Tag on Bureaucracy
AI is changing how companies measure innovation, growth, strategy and governance. As AI reduces the cost of building, Cost of Failure becomes a more powerful Innovation Accounting KPI for measuring how efficiently organizations learn, make decisions and allocate resources. The article explores how Cost of Failure can help leaders put a financial value on slow decision-making and inefficient governance—and rethink how they measure innovation and growth in the AI age.
Why “Cost of Failure” Is One of the Most Important Innovation Accounting KPIs
Often, at conferences or during client engagements, we get asked what the single most important KPI in Innovation Accounting. Usually, the question behind the question is this: “What is the one metric a CFO will actually care about?” Or put differently: “What KPI ensures the innovation department is not seen
How to Introduce Innovation Accounting Without Alienating Your Organization
Measuring innovation is one of the toughest challenges for modern organizations. Unlike traditional financial metrics, which offer clarity and predictability, the ROI of innovation is far less straightforward. Yet companies that fail to track their innovation performance risk investing blindly, without a clear understanding of which initiatives are creating value
The Minimum Viable Innovation Accounting System
For years, executives have cited one consistent barrier to investing in innovation: the inability to measure it. Without clear metrics, innovation is often relegated to the sidelines—seen as a discretionary activity rather than a disciplined driver of growth. The consequences are real: careers in innovation become cul-de-sacs, and companies underinvest
Innovation Accounting is for Everyone
For a considerable period, I maintained the belief that innovation accounting, the practice of quantifying innovation, was reserved only for those companies that had reached the upper echelons of innovation maturity. My stance was that innovation accounting was a concern best addressed once a company had established fundamentals such as
Cost of Failure vs. Rate of Failure
SUMMARY Without a doubt, many businesses today consider innovation a cornerstone for growth and sustainability. As companies strive to foster innovation-led growth, prioritizing wise investment in innovation becomes essential. Consequently, there is significant emphasis on the success rate of innovation investments, measured through metrics such as the number of pilots