Managing continuous innovation through performance measurement

Purpose The purpose of this paper is to define measures that small- and medium-sized enterprises (SMEs) can use for evaluating continuous innovation and to analyze types of SMEs, according to the innovation measures they use and their characteristics in terms of size and operational and financial performance. Design/methodology/approach The data were gathered with the help of a structured survey questionnaire from a cross-section of firms in both the manufacturing and service sectors in Finland. The data were analyzed in terms of factor and cluster analyses. Findings Three measures of continuous innovation and three types of SMEs were defined based on their continuous innovation measures. It was found that firms using all three types of innovation measures also register above-average financial and operational performance compared to those that do not. Originality/value This study attempts to improve the precision of performance measurement and the management of continuous innovation in firms by expanding and refining existing measurement guidelines and principles. In particular, this work approaches the subject of continuous innovation measurement from the standpoint of SMEs.