Business Development Metrics

Process speed. An ideal innovation process quickly moves ideas from conception to critical decision points. That decision point might not always be market launch, it might be a decision to kill or enter a trial market.

Breadth of idea-generation process. Senior management does not have an exclusive license to develop good ideas. In fact, the best ideas can originate from people who are close to markets, such as sales representatives. A good idea-generation process seeks ideas far and wide—from customers, channel partners, even competitors. Measuring the percent of ideas that come from outside the company is a good proxy for the breadth of the idea-generation process.

Innovation portfolio balance. A good innovation portfolio is a balanced innovation portfolio. Balance can exist along multiple dimensions, such as the stage of development, the target domain and the amount of risk. Clorox ensures that investments are balanced in diverse areas ranging from introducing line extensions to creating new categories by classifying its projects into three categories (sustaining, breakout and disruptive) and investing accordingly.

Growth gap. To develop a balanced portfolio, companies should have a good understanding of the gap between their strategic objectives and their current innovation activities. The results must be reasonably risk-adjusted; if success requires that every innovation project meets its current projections, a company should think about developing more (or different) projects.

Distinct processes, tools and metrics for different types of opportunities. Ideas can look different through different lenses. Tools that help screen and shape core initiatives can unintentionally weed out great— but different—ideas. A company’s core stage-gate process can ruthlessly reshape even the most novel idea to resemble what a company has done before. This metric ensures that a company has different screens, tools and metrics for different types of innovation. For example, IBM classifies opportunities by time-to-market and risk-level and applies the appropriate innovation processes to best cultivate the project.

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