07 Oct Five sure ways to measure innovation
1) What percent of your revenues come from products introduced in the last 3 years?
As a bare minimum it should be least 30% – if you are in HighTech and it’s not 70-90% then go find another industry!
2) Are you growing faster than the market you serve?
If you aren’t gaining market share then you are losing it to someone else. Don’t believe it? Ask anyone in Detroit. Check out the recent McKinsey report on this.
3) What percent of your Patents and IP are actually being put to use?
It’s amazing but many companies use just a fraction of their IP in practice. Most patents end up in a file cabinet or nicely framed at best. Bottom line – most of us are a whole lot better at coming up with ideas than putting them to use. For example, one of the big shifts at P&G several years ago was finding ways to partner and license on the amazing 90% of its patents that were UNUSED and generating no value.
4) How many ideas did you generate per person last year?
Am I serious? Absolutely! If you don’t track this then how do you set a benchmark for people to strive towards? Toyota documents over 1,000,000 ideas yearly and tracks them to determine which ones amount to real value. How many did you document this year – go ahead be honest.
5) Do your customers tell you that you are innovative?
Well, only if you ask them – so do you? Most companies wouldn’t think of actually going to their customers to find out. Perhaps they are afraid of the answer. Markets like innovative companies that stand out and deliver value and will pay a premium for their products and services – think Apple. It’s astounding but in the hundreds of companies I’ve worked with, conducted innovation audits for, and surveyed less than 10% bother to ask their customers this simple question.
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