Innovation: Measuring Success

April 14, 2005
Businesses link innovation to performance metrics.

Wondering how to measure the success of your company's innovation efforts? Which performance metrics make sense in the innovation equation?

Many of the fastest-growing U.S. private companies may be able to assist you in answering those questions, according to a recent Trendsetter Barometer survey from PricewaterhouseCoopers.

Nearly half of the 355 private-company CEOs queried make an effort to link innovation to metrics. They measure the success of their innovation effort by its impact on overall revenue growth (78%), customer satisfaction (76%), growth in revenue from new products or services (74%), increased productivity (71%) and earnings/profit margins (68%). Much smaller percentages examine its impact on recruitment and retention (34%) and market capitalization (17%).

"Companies are using multiple measures to track success," says Jay Mattie, PricewaterhouseCoopers' U.S. Private Company Services Assurance Services leader. "This practice enables cross-analysis as well as period-to-period comparisons."

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