Facilitating innovation capability through performance measurement A study of Finnish SMEs

Purpose - The study aims to clarify the issue of whether measurement has a positive effect on different aspects of innovation capability. The study contributes to the current understanding in two ways; first by presenting the important aspects of organisational innovation capability, and second by showing the importance of measurement in promoting different aspects of innovation capability. Design/methodology/approach - The study has been executed by conducting a web-based survey in small-and medium-sized enterprises (SMEs). A sample of 2,400 SMEs was randomly selected. A representative of management and employees in each company received an invitation to participate in the study. A total of 311 valid responses were received. Findings - The study contains a comprehensive description of the impacts of measurement on different aspects of innovation capability in SMEs. According to the results, performance measurement has positive effects on issues related to innovation capability. The measurement of the aspects of innovation capability is rare in SMEs, although innovation capability and measurement are positively related. The study suggests that both academics and practitioners should focus on the development of new methods and practices for measuring issues related to innovation capability in order to develop innovation capability and further contribute to firm success. Originality/value - The paper discusses the value of measurement in a context of innovation management.