Measuring the Value of Innovation

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From the time COSIA was formed, we looked for ways to quantify the value of the member-driven innovation that was passing through our doors. How could we measure the progress that was being made in developing clean technologies for the oil sands? Given the long lead nature of many of the technologies being developed through COSIA, the challenge was how to put a value on progressing technology that would likely not impact environmental performance for many years.

At first, we measured innovation value by counting the number of go/no-go decisions that members made as a result of sharing the results of their research and development efforts. Go was a decision to advance the technology further, and no-go meant that lessons had been learned from the research, but there was no advantage in pursuing the innovation.

Our rationale was that there was a distinct advantage for members if they were able to advance or reject an emerging technology quickly. For example, if one member researched and then rejected a technology and shared the results, other members would be able to quickly evaluate it for their own purposes without having to replicate the tests. 

In 2015, members made a go decision on 38 technologies received from other members and a no-go decision on 43 technologies received from other members.

We also measured innovation value by how much total funding each member company contributed to projects. It was agreed that each company’s total contribution to the COSIA alliance should be equitable and based on each company’s production volume. A lot of effort was put into measuring these contributions, which demonstrated openly how each participant was contributing to projects and also helped to build trust.

More important was the value that members leverage from being a member of COSIA. To assess this number, we developed a project multiplier – the ratio of the value of technologies a member received against the value of their company’s funding contribution. Our analysis showed members were realizing between four and 43 times the value of their contribution.

For the smallest firm, for every dollar they spend on a research project. they received access to $43 worth of project research. Even the largest producer received over 4 times the value of the research dollars they put in, $4.60 for each dollar invested. 

The real value however is even greater. For example, if a technology costs $1 million to develop and creates $5 million in cost savings once it is deployed, those savings represent significant additional value. And if two companies deploy the same jointly developed technology, savings amplify even further. That is the impact of leveraging the COSIA network. 

Interested in innovation? Check out other blogs in the Innovation Hacks series.

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