Measuring Gaps: Innovation

Innovation can increase revenue growth for a company, and according to Mullen's article, calculating the gains and gaps in innovation can give a company a better idea of where they fall with respect to the competition. Understanding if an organization has an "innovation gap" can illustrate new areas for revenue growth. Part of this process involves democratic participation and brainstorming by employees through content management systems. Innovation can decrease operating costs, lead to new products, improve workplace atmosphere and generally affect all elements of a business and its success.

Mullen's article discusses four components to consider when evaluating for innovation gaps: revenue growth, revenue protection, cost containment and disruptive change. Evaluating these elements can greatly assist organizations in making strategic choices.

For other ways of calculating the monetary value of innovation, see the "smart metrics" listed by Baseline: http://www.baselinemag.com/article2/0,1397,818932,00.asp. They include formulas such as "employee suggestion payoff" which is measured as such:

[($ saved or created by employee suggestions/# of employees)/$ costs of IT to support employee-suggestion system]

These kinds of metrics can help to quantify the seemingly impossible, the effects of both far-reaching and short-term, incremental and radical innovation.

See: Mullen, E. "Calculator: The Money Your Innovation Isn't Making," Baseline, Available here: http://www.baselinemag.com/article2/0,1397,743154,00.asp

[Summary by: Chen Ye]