Community Forum – What metrics are used for your innovation process?
Assessing the value of Innovation is a necessary and critical aspect of Portfolio Management. This survey is intended to uncover best practices to characterizing benefits proposed, realized and impediments to doing this in a consistent manner.
1. Other: Vitality index -% of income from new products
2. Other: Risk adjusted Contribution Margin
- Intrinsic uncertainty of delivered product features and performance in eyes of customers
- Globalization requirements & Difficulty predicting market penetration of technology push products
- Understanding customer need
6. How does your company determine what is the appropriate % of R&D spend to apply to business support activities?
- Evolutionary approach
- Random number, honestly…set by CEO not based on need
- Determined in each BU based on current year budget and 3-5 year growth strategy
- Quality of the new product pipeline
- Depends on needs of the business
- Industry standards
- Executive discretion
- No specific process
- Yearly Budgeting Plan
- Use a Technology Steering Committee including Senior Executive Team Members to determine prioritization of projects and % of R&D spend to apply to Business Support, Research, and Product Development
- Defined by business need
- Driven by portfolio prioritization and optimization
- We target 90% spend on innovation and 10% spend on support
- Business Support is first followed by new products
- Based on assessment of need – flexible
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