Tuesday, June 21, 2016

Key Performance Indicators (KPIs) For Innovation

Most of the common KPIs that executives typically look at are good for measuring the financial performance of their organizations.

But, what are some useful KPIs for measuring innovation?

Here are 2 of them:

1. What percentage (%) of revenue / profits are derived from products / services that are less than X years old?

2. Your average sales price (per unit)?

You want both of these metrics to be increasing.

The first KPI helps you track how successful your organization is at creating new products and services that your customers actually value and want to buy.

The second KPI will tell you if your pricing power is increasing (By making it per unit, you discount the effects of customers buying in greater volume).  An increasing average unit price indicates that your customers are receiving (and paying for) increased value, and don't regard your products  / services as a commodity.