Summary
Because innovation can be achieved in many ways, measuring innovativeness is difficult to do well with a single measure. One effective approach is to pair a "fixed" with a "variable" measure, that is, Revenue from New Products with Revenue from New Platforms. The former reveals much about the overall rate of change and the latter about the quality of "newness" of the shift in revenue. The former focuses on product and the latter on any kind of relevant platform that leads to advantage through innovation: product, technology, manufacturing, operational, or business. By considering the accounting-based new product measure in concert with the more flexible measure of new platforms, a company can explore meaningfully the quality of its innovation and how sustainable is its innovativeness.
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Extract
Measuring Innovation: Beyond Revenue From New Products
Measuring innovation is like reckoning by smoot.
The smoot was first used as a standard of measurement in October, 1958, on the Harvard Bridge connecting Boston to the Massachusetts Institute of Technology across the Charles River (1). It is a long bridge, often fog-shrouded, so the lonely student crossing it would have no clear idea of how much farther he or she would have to trek. It occurred to many MIT students that having markings on the bridge showing how far one had gone and how far remained would be worthwhile. What measure to use, though? The Lambda Chi Alpha fraternity pledge master had an answer. Why not the length of a pledge to the fraternity? Indeed, why not the length of the shortest of the pledges, especially since his name happened to be Ollie Smoot, a name that somehow sticks in the memory. Smoots it was then.How long is a smoot? Well, it depends. If by a smoot you mean one defined as the length from head to toe of Ollie Smoot on that evening in 1958 it is exactly 5'7'' or 170.2 centimeters, and the length of the Harvard Bridge is "364.4 smoots and an ear." Visit the Harvard Bridge today and you will find the smoot markings in place and even the paving stones laid to match the smoot dimensions (1).Now Ollie Smoot's two children, Steve and Sherry, also went to MIT and not surprisingly have been asked more than once to volunteer to serve as the new yardstick by which to remeasure the bridge. We can spare them the nuisance of being carried along the bridge, doing what Ollie described once as the moral equivalent of 364 pu...See the full content of this document
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