Measuring Innovation by Time to Market?
Editor | On 01, Jan 2010
Message: 352Posted by: Carl
Posted on: Thursday, 15th March 2007
I listened to a webcast yesterday about product innovation. One of the speakers said one of the ways they measure success is by the time it takes to get to market. I didn't get to ask my question live, but it seems to me that this is a completely arbitrary way to measure innovation, rather than having some type of scientific basis. Just because something is faster doesn't mean it is better.
Anyone know about using timelines to measure success?
Message: 356
Posted by: Mike Carnell
Posted on: Friday, 16th March 2007
Carl,
It doesn't pass the common sense test but that doesn't mean it is wrong.
We have been through an interesting discussion on this site about the definition of innovation and it seems that there is a contingent that feels to be innovation it must go to market. If that caveat holds then time to market becomes a subprocess of innovation and may be a fair metric. I would certainly have to push back on it as a sole metric. I would think that something as obscure as say, success of the product may be appropriate as well or percent of successful products. It would be nice to innovate and have it create a return on investment.
It would seem that it goes back to the definition issue – what is in the boat and what is not.
Just my opinion.
Good luck.
Message: 358
Posted by: Gregory Frenklach
Posted on: Friday, 16th March 2007
Innovation is the multi-level thing.
- It can be a new result à discovered and/or satisfied a new need
- It can be a new method to gain the same result à new functional solution
- It can be a new technology to base the same method on à new technological solution
- It can be a new facilities (means) to support the same technology à new ÒtechnicalÓ solution
- It can be a different set of parameters of the same means à new Òparametrical solutionÓ
One has to agree that each level demands different time.
That’s why in my opinion time-to-market as innovation success measurement may be used only inside the same innovation level of the same or close human life field.
Message: 359
Posted by: Mike Carnell
Posted on: Saturday, 17th March 2007
Gregory Frenklach,
Stratification of data makes sense as long as you are looking for information at that level. If you have a program that contains more than one level then it would make sense to combine the data. The way you treat data is a function of what information you are looking for.
Just my opinion.
Message: 365
Posted by: Jack Hipple
Posted on: Monday, 19th March 2007
I'm late to this discussion, but of course time to market is important! What good does it do to be the second or third to market and lose the bulk of the profitability? There are companies who, in the past have succeeded at being second to market, but there numbers have diminshed dramaticially as the capital and regulatory costs have risen over time. Time to market is only one of many parameters. Is the product or service profitable? Why would you want to come to market rapidly with something that loses money (and lose it faster)? Does the organization have the ability to sustain the innovation? What good does it do to be quick to market with a product or service that cannot be supported, to what degree is necessary, after the “sale”? And time to what market? Invariably there are many uses for a given technology that are outside the vision of the inventing organziation. Fast to market without having thought through the IP and potential licensing issues is not smart either. If ann innovation is quick to market, is that because follow up inventions are needed? Is the staff in place to do this?
There is no one metric for innovation in any industry at any time. There may be a “most important” metric for a given industry, technology , or market at any given time.
Message: 366
Posted by: Carl
Posted on: Monday, 19th March 2007
But if your company is creating something that is truly innovative – a breakthrough product let's say – how can you accurately judge time to market? There's no precedent for something that is breakthrough/disruptive. Is it thus fair to judge the result based on the unclear process?
Message: 367
Posted by: Jack Hipple
Posted on: Monday, 19th March 2007
Carl, I guess you have to give us an example of what you consider to be truly disruptive vs. just disruptive or innovative. There are always exceptions to every pattern. Let's think back to Teflon or Post it Notes and their “accidental” discovery. The history of both says that as innovative as they were, there was not infinite patience on the part of their corporate sponsors. If 3M's market research had not switched from managers to secretaries, this product would have been killed in its market research stage. There was a time line for judgment. Maybe it's longer if you don't understand all the possible uses, but it's not infinite. I think the broader the potential use and markets, the more patience is required as a company (and this would depend on size and capabilites) tries to sort out marketing, .icensing, IP issues, partnering, etc., but there will be time lines for any of this in today's world. I don't know of any viable COMMERCIAL organization today that would give an open ended time to anything–maybe the national labs can fund truly new things for a long time, but they are not judged by market forces, and that's where I'm coming from. Would love to hear some examples from you that illustrate your point.
Message: 370
Posted by: Mike Carnell
Posted on: Tuesday, 20th March 2007
Carl,
Taking something to market is a process. I would think that it would be just like any other process. You take something to market, measure it, post mortem the process and improve on the next thing you take to market. You would of course have to have metrics that spoke about the quality of the campaign as well as the speed.
Just my opinion.
Message: 371
Posted by: Mike Carnell
Posted on: Tuesday, 20th March 2007
Jack,
Have you got some data on this: “There are companies who, in the past have succeeded at being second to market, but there numbers have diminshed dramaticially as the capital and regulatory costs have risen over time.” If I look at products in the market place and the companies I know that have a full blown innovation type program there are more people innovating an innovation that the guys on the leading edge. The leading edge is very expensive. The guy that takes the innovation and makes it better isn't eating a lot of that expense for getting public awareness and the number of products that just miss.
Regards
Message: 382
Posted by: Jack Hipple
Posted on: Thursday, 22nd March 2007
Mike, in looking through my information, I cannot supply information that is not company;client confidential, so let me give you some examples from a while back while at Dow. Being the largest and lowest cost chlorine producer in the world (there are other industry analogies to this such as Rohm and Haas in acrylics), they didn't have to “invent” all applications. They could watch and follow and license/acquire if necessary with their resources. The opposite was also true. I remember specialty inventions that applied to the consumer products and asphalt paving areas that had struggled for a long time at Dow until the folks that made consumer products or asphalt paving systems just said, “call us when you're ready–we know what it takes and you don't”. One has to be careful about this of course as you can misjudge others capabilities as well as your own. Core world scale capabilities and cash can also allow the scare of potential acquisition to allow favorable terms on licensing or second to the market timing. That was done as well (details confidfential, but you get the point). We just need to be very careful about one business model applying to all situations and industries.
Message: 383
Posted by: Mike Carnell
Posted on: Thursday, 22nd March 2007
Jack,
The reason I ask is that if I look at consumer electronics i.e. television, DVD players, telephones most of the players in those markets are second, third, forth, etc. players. I don't see anything stopping that market growth. The Japanese are a huge player and now the Korean companies are really opening up.
Cars and appliances aren't much different. They are manufactured everywhere so I am struggling with how you can say that second comers to the market are seeing cost based on regulation, etc. It seems more like the market is filled with players that were something other than #1.
Regards
Message: 384
Posted by: Jack Hipple
Posted on: Thursday, 22nd March 2007
Mile, I think we agree. I took your previous comment to mean you didn't see examples of where #2 and 3 had been succesful. I think that high capital intensity (chemicals, materials) and regulatory barriers (chemicals and pharma) argue in favor of #1. But many industries are not capital intensive and open the doors for #2 and 3 especially if the technology life is so short that patent protection is irrelevant.
Thanks for the stimulating discussion!
Message: 386
Posted by: Mike Carnell
Posted on: Thursday, 22nd March 2007
Jack,
The best presntation on this I have ever seen was from Timothy Tison, Pharma CEO, at one of the ISSSP conferences in Scottsdale.
Shortening the R&D cycle was so critical to his business that he personnally championed the SS efforts in that area. It was great story of leadership. I see him listed as a speaker at several conferences these days. It might be worth your while to catch one of those. He seems very dynamic.
Thanks.
Regards
Message: 387
Posted by: Carl
Posted on: Friday, 23rd March 2007
I'm not sure I understand the difference between “truly disruptive vs. just disruptive or innovative”–this may get back to the confusion over the definition of innovation, but it's disruptive or it isn't.
Consider a drug company that takes years and hundreds of millions if not billions of dollars to create a new life-saving drug or vaccine. Is time really a relevant measure of success?
When do you cut the cord? Should time be a factor? THE factor?
Message: 396
Posted by: LM
Posted on: Sunday, 25th March 2007
Carl
Despite being late:
Let’s define Ã’successÓ as Ã’accomplishing an innovative process and achieving/bringing into existence a defined/ideal goal not being BEFORE.Ó
With respect to time parameter, Innovation is definitely time bounded and regardless of one’s arbitration(whether axiomatic or else), time will be the core measure of Ã’successÓ & innovation in between a minimum of two PHYSICALLY IDENTICAL goals.
Theoretically, suppose two identical goals are achieved at two different times to market. This would mean the later will only be a COPY of the preceding one.
Logically , it is correct to say Ò Only and if only two achieved goals are identical in all respects except for the time to market, the preceding one is the innovative oneÓ
With Regards
LM
Message: 401
Posted by: Praveen Gupta
Posted on: Monday, 26th March 2007
Hi Carl:
I have done some research in the field of innovation for over two years. With the current understanding of the innovation processs, we need to rely on the simple process based measurements. The three input, in-process, and output measures of innovation can be CEO Recognition for value-added innovative solution, number of ideas per employee (not c ounting unrelated ideas), and growth in revenue for new products or solutions. Combining three measures can create a simple innovation index for a business.
There is a long list of measures that can be used, but difficult to correlate.Thus, I find the three above measures simple and causative. It implies that innovation begins with excellence in idea management.
Just a thought.
Praveen
Message: 428
Posted by: Carl
Posted on: Monday, 2nd April 2007
Praveen, Thank you for your reply. I am not sure I understand the first item you mention. What is “CEO recognition for value-added innovation solution?” Do you mean that the “value-added innovative solution” is a metric? In what way? What is the difference between an innovative solution and a value-added innovation solution? How are you defining/measuring them compared to the number of ideas per employee and revenue growth? Thank you.
Message: 429
Posted by: Praveen Gupta
Posted on: Monday, 2nd April 2007
Carl:
Well, innovation can create value at different level. Some innovation could produce $100K, $1M, $100M, or more. In the context of business objectives, an innovation can selected for CEO recognition if it adds a significant value. The measurement is that CEO recognizes innovations of significant value so that nummber of such innovations increases.
The number of ideas is critical to create the culture and environment for intellectual engagement of employees. Active employee participation leads to more innovation. Thus, excellence in idea management is a prerequisite to developing innovative solutions.
I hope it clarifies.
praveen