Everyone wants to use metrics to monitor their innovation. That's fine… but unless you’re using “intermediate” metrics, you could be missing 3 qualities of a good metric: 1) predictive, 2) insightful, and 3) actionable. Consider these 12 intermediate metrics for your business. ... Read More
Lagging indicators can be useful, so long as too much time doesn’t pass between your correcting action and the result you want to measure. In this regard, the Vitality index–% of revenue from new products—fails miserably. Improvements you make in the front end of innovation could take years to register a significant impact on revenue.
Don’t discard your Vitality Index, but do supplement it with new metrics, such as the Growth Driver Index (GDI) and Commercial Confidence Index (CDI). Otherwise your new product “furnace” will stay cold far too long. This 2-minute video explains further: Employ new growth metrics.
More in white paper, New Innovation Metrics
The Vitality Index—% of revenue from new products—is a fine metric. But it is 1) not predictive… it’s a lagging indicator only revealing what’s already happened, 2) not prescriptive… it doesn’t say how to improve, and 3) not precise… often ill-defined and easily manipulated. Keep it, but supplement it with two new metrics, the Growth Driver Index and Commercial Confidence Index. These measure your progress on building growth capabilities and customer insight, respectively. Check out this 2-minute video to see how easy these metrics are to implement, Employ new growth metrics.)
More in white paper, New Innovation Metrics.
1. The “Why” problem: Today’s most popular metric, the Vitality Index (% of sales from new products) doesn’t tell you why your % is going up or down. 2. The “When” problem: The lag time in your feedback loop is too long: Changes you make in the front-end-of-innovation will take years to generate significant revenue. 3. The “What” problem: The Vitality index focuses on your results. You need metrics that focus on your capabilities. Only by building these can you have confidence that you’ll improve your innovation results.
More in article, 3 Problems with Innovation Metrics
The Vitality Index–% of sales from new products—doesn’t tell you how to improve. Increase your R&D staffing levels? Hire more marketing people? Improve gate reviews? It’s hard to say. Imagine guessing which car pedal will make you go faster. And then waiting years to learn if you were right (since the Vitality Index is a badly-lagging indicator). Maybe it’s time to supplement your Vitality index with two new metrics: See white paper, New Innovation Metrics. These leading indicators will tell you how to accelerate your innovation success right now. Hit the right pedal and leave skid marks.
More in article, It’s Time for New Innovation Metrics
The Vitality Index–% of revenue from new products—is the most popular innovation metric today. But the feedback loop is soooo long. Let’s say you implement a new practice in the front-end of innovation, like improved customer interviews. It will take years for those projects to be developed, launched and register significant sales. This is like turning up your thermostat and having the furnace come on. Next week. For more download our white paper, New Innovation Metrics.
More in article, 3 Problems with Innovation Metrics
Keep using the vitality index… new product revenue as % of total revenue. But understand three limitations: 1) It’s not predictive; it only tells you what has already happened. 2) It’s not prescriptive; it doesn’t suggest how to improve. 3) It’s not precise; is it a new product if we just change its color? Supplement the vitality index with 2 newer metrics: Growth Driver Index (GDI), and Commercial Confidence Index (CCI).
More in Leader’s Guide Videos Lesson 29, Employ leading growth metrics
A fine innovation metric is the vitality index… % of total sales from new products (usually launched in the last 3 or 5 years). But it doesn’t tell you why your % is going up or down, does it? Sure, you can see which new products contributed… but you need to uncover the underlying reasons driving results. Otherwise you’re just watching from the bleachers.
More in article, 3 Problems with Innovation Metrics (Originally published in B2B Organic Growth Newsletter).