January 10th, 2018
Definition of Essential Innovation Success Measurements
Having defined metrics to assess the success of innovation is critical to ensuring effective management of innovation. In this respect, a report by the Boston Consulting Group (BCG; 2008) highlights various aspects that a company such as Panera can focus on to assess innovation success. Since innovation describes a process of idea generation to support new ways of doing things or new product development, innovation success can be evaluated via the number of new ideas (BCG, 2008). More clarity would result from linking such idea generation to resources used such as ratios of ideas to a given number of employees, ideas within a given time, and ideas per level of expenditure on research and development.
A second metric for measuring innovation, as highlighted in the BCG (2008) report is profitability. This arises from the perspective that the overall goal of innovation is to improve the long-term profitability of the company. In the short term, profitability of innovation activities can be evaluated through such ways as considering investment in projects against actual and budgeted performance, revenues from recently launched products, and cost savings from recently launched process changes (BCG, 2008). Panera can also use these three criteria to find out how the success of its innovation process has been for instance within the last three years.