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Benchmarking Innovation Performance

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Closing the Gap Between Aspiration and Execution

Benchmarking Innovation Performance

GUEST POST from Noel Sobelman

In today’s volatile, technology-driven world, where the pace of change continues to accelerate, most executive teams agree on one thing: innovation, whether incremental, adjacent, or transformative, is critical. What’s far less clear is how to measure whether their innovation efforts are working or how to systematically improve them. That’s where benchmarking comes in.

Benchmarking isn’t just a diagnostic tool, it’s a strategic accelerator. It provides clarity where there’s ambiguity, reveals blind spots that internal reviews often miss, and equips leadership teams with hard data to make smarter, faster, and more confident decisions about innovation investments and process improvements.

This article explores benchmarking as a strategic capability for quantifying the gap between current innovation performance and best-in-class execution. It also outlines how companies can use benchmarking to unlock more reliable, scalable, and profitable innovation outcomes.

From Insight to Action: Why Benchmark Innovation?

Innovation is inherently risky with outcomes that are hard to predict, but the processes that support it don’t have to be. Effective innovation systems are structured, repeatable, measurable, and continuously improving. Benchmarking enables companies to see those systems clearly and objectively. It replaces assumptions with insight and turns performance anecdotes into verifiable data.

Used strategically, benchmarking helps executive teams build a compelling case for change grounded in facts rather than opinions. It offers a concrete way to quantify gaps between current and desired performance, helping to expose where process inefficiencies or capability gaps are holding the organization back. Benchmarking also supports leadership in identifying maturity levels across critical innovation capabilities, from governance and investment decision-making to resource management and project execution.

Importantly, it links development capabilities directly to measurable business outcomes. That means innovation isn’t just about creativity or culture, it’s about performance that can be tracked, improved, and scaled. By grounding decisions in comparative data, benchmarking makes it easier to align managers around realistic year-over-year improvement targets that are both ambitious and realistic.

Defining Performance: What Benchmarking Measures

For benchmarking to drive real improvement, it must look at the right dimensions of performance. At Accel, we use a multi-dimensional benchmarking model that examines four distinct categories of innovation performance: innovation effectiveness, project performance, process application, and portfolio management.

Innovation effectiveness reflects senior leadership’s ability to guide success across the full innovation spectrum, from product line extensions to transformative new ventures. This includes new product vitality, the percentage of revenue generated by recent launches, as well as return on R&D investment and the proportion of spend lost due to delayed or ineffective decision-making (aka, wasted development spending). When measuring leadership effectiveness in creating new sources of growth beyond the core business, we include leading indicators like evidence-based portfolio metrics, progress metrics, and scaling metrics such as user engagement, retention rate, and referral rate.

Innovation project performance reflects how well teams execute against their objectives. It includes metrics such as time-to-market, time-to-profitability, and schedule predictability, alongside actual-to-planned measures of product cost, profitability, and quality. These indicators help determine whether teams are executing effectively while meeting the business and customer needs they set out to address. New venture project performance measures include validated assumptions and cumulative evidence strength across solution desirability, business viability, and technical feasibility dimensions.

Innovation process application focuses on how consistently and effectively innovation methodologies are applied. Here, we assess actual versus estimated project cycle times across development phases as well as the accuracy of development cost forecasts. We also examine the frequency of project re-scoping, exception reviews, team turnover, and the reuse of design or code elements, all of which serve as indicators of process health. For transformative innovation processes, we also assess learning velocity, experimentation rigor, evidence-based decision-making, metered funding practices, core business leverage, and engagement with external ecosystems.

Finally, innovation portfolio management metrics reveal how well an organization aligns its innovation resources with its strategy. We evaluate factors such as strategic alignment, investment allocation, resource utilization, and portfolio value realization. When these are off-target, companies often see a mismatch between growth ambition and investment mix, poor development throughput, or low return on their innovation spend.

Accel Management Group innovation performance benchmark metrics

Figure 1. Innovation Performance Benchmark Metrics

Together, these four categories offer a comprehensive view of performance and their connection to business outcomes, and more importantly, a roadmap for targeted, results-driven improvement.

How It Works: Accel’s Benchmarking Approach

The benchmarking process begins by establishing a clear, accurate picture of the company’s current state. This involves gathering available performance data, then evaluating it for consistency and comparability across sources. We reconcile discrepancies and normalize contextual factors like company size, product line complexity, regulatory classification, innovation type, and development methodology.

AI accelerates this process by enabling faster data harmonization, natural language processing to analyze qualitative inputs (such as project postmortems or customer feedback), and machine learning algorithms that detect hidden drivers of performance variance across projects, teams, or business units.

Once we’ve built this baseline, we assess capability maturity across several critical dimensions. These include innovation process structure, governance and decision-making frameworks, execution models (such as gated, Agile, or transformative approaches), and portfolio management practices. We also analyze resource management, discovery and ideation, new venture incubation efforts, alignment with business strategy, culture, and organizational mechanisms such as incentives and reward systems.

From there, we compare the organization’s practices and outcomes against peer companies, industry leaders, and Accel’s leading practice reference model. The output isn’t just a list of issues; it’s a prioritized set of capability gaps linked directly to performance impact. We then work with executive teams to develop action plans and change roadmaps, aligning leadership around where to invest, where to restructure, and where to accelerate change.

Noel Sobelman benchmarking approach

Figure 2. Benchmarking Approach

What Benchmarking Reveals: A Snapshot from the Field

We’ve seen across multiple clients and industries how benchmarking can uncover hidden obstacles to innovation performance. Consider the example of one of our clients, a MedTech manufacturer that decided to benchmark their capabilities after struggling with missed launch dates and underwhelming innovation returns. Their leadership team believed that product complexity and regulatory challenges were the root cause. But when we dug into the data, a different picture emerged.

The company was not consistently tracking core new product development performance metrics, making it difficult to identify root issues or assess improvement opportunities. Sample project data revealed that early-phase development cycles, specifically Concept and Planning Phases, were taking two to three times longer than industry benchmarks. Moreover, the company was investing heavily in detailed design before evaluating technical feasibility or validating customer requirements, which led to protracted development timelines, late-stage surprises, compliance-driven rework, and chronic cost overruns.

Our assessment also uncovered a lack of system-level architecture discipline and siloed project planning without proper integration to balance customer needs against technical, market window, schedule, and resource considerations. In short, while the organization believed it had a process problem, benchmarking revealed a deeper issue: a maturity gap in early-phase project planning, risk management, and system design.

By framing these insights within industry benchmarks and leading practices, the company was able to galvanize leadership support for a targeted transformation. The result was a realigned innovation and portfolio management process focused on early project de-risking, customer need validation, and robust front-end planning, leading to faster cycle times, fewer late-stage surprises, and improved innovation throughput.

Why It Matters: The Strategic Case for Benchmarking

Benchmarking delivers more than operational insights, it unlocks real business value. Companies that benchmark and act on the findings tend to outperform peers in key areas. For instance, best-in-class organizations generate over 45 percent of their revenue from new products. Their time-to-market is over 40 percent faster, and their R&D resources are more efficiently allocated toward high-impact initiatives like platform innovation and next-generation solutions.

In contrast, companies that don’t benchmark often lack visibility into why projects fail, where delays originate, or how resources are being utilized. This results in lower returns on innovation investment, lower project success rates, and internal misalignment on where and how to improve. We’ve seen cases where products missed their mark not because the core idea was flawed, but because teams moved too quickly into development without validating customer needs or failed to adapt to shifting customer expectations. The result: products that launched late, didn’t resonate with customers, or had to be reworked at a significant cost.

When benchmarking is integrated into an ongoing performance management system, it serves as a feedback loop, continuously guiding decision-making and capability development. That’s why it’s not just a one-time diagnostic, but a strategic discipline that supports innovation as a competitive advantage. AI technologies enhance this feedback loop by transforming benchmarking into a dynamic, continuous process, automatically updating benchmarks as internal and external data sources evolve, and alerting teams to emerging gaps or opportunities in real time.

Conclusion: A Tool for Strategic Transformation

In a world where innovation separates leaders from followers, benchmarking is more than a diagnostic, it’s a tool for strategic transformation. By providing hard data on where you stand and where to focus, it turns vague aspirations into actionable priorities and ensures that innovation efforts are aligned with measurable business outcomes.

But benchmarking only delivers value when it’s integrated into the broader innovation system, driving continuous improvement and sharper execution over time. That’s where its real power lies, as an ongoing discipline that builds organizational maturity and long-term advantage.

For executive teams looking to sharpen their innovation capability, a few critical questions should guide the next steps:

  • Do we have an objective understanding of how our innovation performance stacks up against peers?
  • Are our development processes delivering the speed, quality, predictability, and customer impact we need?
  • Can we clearly measure how innovation contributes to growth and profitability?
  • Most importantly, are we investing in the right capabilities to win in the future?

You can’t improve what you don’t measure, and you can’t lead if you don’t know where you stand.

Image credits: Accel Management Group, Noel Sobelman, Pexels

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Are You Leading in the Wrong Zone?

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Are You Leading in the Wrong Zone?

GUEST POST from Geoffrey A. Moore

I get tired of listening to “experts” explain how leaders need to be bolder. Usually what they are advocating for is more disruptive innovation, less business as usual. But this completely ignores the impact of context and ends up patronizing behavior that may actually be well-grounded. It depends on which zone you are operating out of.

In the Performance Zone, the goal is to deliver on the quarterly plan. It is not the time or place for disruptive innovation. Leadership means getting your team to the finish line despite whatever roadblocks may crop up. Grit and resourcefulness, combined with attention to tactics, is what is wanted here.

In the Productivity Zone, the goal is to be there for the long haul. Again, disruptive innovation is not on the docket. Analysis and optimization are the keys here, and leaders must be willing to step back, take a systems view of things, and invest in efforts that will enable the Performance Zone to perform better in the future.

By contrast, the Incubation Zone is all about disruptive innovation, and most pundits champion a leadership style that is a perfect fit for this zone. So, if you are in this zone, by all means embrace hypothesis testing, agility, fast failure and the like. Just remember that what works here does not work well in any of the other three zones.

Finally, the Transformation Zone is where the pundits ought to be focusing because transformation is a bear, and no one can ever really tame it. Business lore celebrates the amazing disrupters here — Jobs, Musk, Bezos, etc. — as well we should. But in so doing we should not ignore the amazing disruptees, the leaders who redirected their enterprises to bring them kicking and screaming into a new age — Gerstner, Nadella, Iger, and company. For my money, their leadership style is the single most important one for any aspiring CEO to master.

That’s what I think. What do you think?

Image Credit: Pexels

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Six Leadership Myths Sabotaging Your Team

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Six Leadership Myths Sabotaging Your Team

GUEST POST from David Burkus

We all arrive at leadership with certain preconceptions about what makes a successful leader.

Sometimes we form an idea of what great leaders do based on historical leaders or modern-day leaders who are always getting media attention. Other times we form a picture of great leadership based on our own past experiences—both leaders we’ve worked under and even what attributes got us promoted into leadership. But those are often anecdotes.

And the plural of anecdote is not data. When you look at the data on effective leaders, pretty quickly you notice that some of these notions are misconceptions or outright leadership myths.

In this article, we’ll outline six leadership myths that are holding you back as a leader and may even be ruining your team—if you believe them of course.

Myth 1: Your Title Is Your Power

The first leadership myth is that your title is your power. It’s great that you’ve been promoted into a leadership role, but the mere title of leader doesn’t actually give you a lot of power over the team. Sure, your name is one box higher than your team members on the organizational chart. But if you work for a large organization, you may not actually have much ability to fire or punish people without getting approval from your boss or from human resources. Instead of trying to gain “legitimate power,” new leaders are better served by gaining rapport or respect from their team (what’s often called referent power and expert power respectively). When your team feels connected to you and respects your expertise, they’re much more likely to be influenced by you than if you’re merely trying to command them.

Myth 2: You Need To Have The Answers

The second leadership myth is that you need to have all the answers. This myth is most common in new leaders. Often, it’s the individual contributors who are hugely productive and who often have all the answers that get promoted into leadership roles. You were promoted for your expertise, so you protect your expertise at all costs. But the longer you stay in a leadership role, the more likely it is that your people know how to do the work better than you do. Pretending you know better may actually trigger their disrespect. In addition, leaders gain a lot of trust among their team when they’re willing to say, “I don’t know” and then look to the team for answers or commit to finding the answers and bringing them back. You don’t need to have all the answers, you just need to be committed to helping your find them.

Myth 3: Your Style Works For Everyone

The third leadership myth is that your style works for everyone. This myth is most common with middle managers. In the first leadership role, you often develop your preferred leadership style. And it often works because you’re leading a team of people who do a lot of the same work. But as you move up in an organization, and as your “team” starts to be a collection of different roles with different preferences, your preferred style becomes less important. It stops being about how you want to lead and starts being about how they want to be led—and led on an individual level. The best leaders understand the motivations and skillsets of each of their people individually and adjust their leadership style accordingly.

Myth 4: Disagreement Equals Disrespect

The fourth leadership myth is that disagreement equals disrespect. When someone on a team speaks up and disagrees with your idea, it can be easy to become defensive and see their disagreement as an act of defiance. And while some people can be downright belligerent, most disagreement on a team is healthy. The best teams are marked by a sense of psychological safety where everyone feels free to speak up, to express themselves, and even admit failure. And when team members disagree respectfully with you, how you respond affects how much psychological safety the team feels. Treat conflict as collaboration and remember that task-focused disagreement not only helps improve your idea, it helps everyone on the team know their opinions are valued.

Myth 5: Silence Signals Consent

The fifth leadership myth is that silence signals consent. This myth is the reverse of the previous one. Disagreement does not equal disrespect but at the same time, no one saying anything doesn’t mean everyone agrees with you. It could be that they have disagreements, but don’t yet feel safe to share them. (Or it could mean that everyone agrees…which means your team might not get much independent thinking.) When you feel your team reaching consensus early, or when no one is pushing back on your ideas, you’ll have to look harder for disagreements and encourage more candor on the team. Be willing to wait in silence for someone to speak up. Then treat that conflict as collaboration and over time your team will be less and less silent.

Myth 6: Performance Is Personal

The sixth leadership myth is that performance is personal. This final myth is less of a leadership myth and more of an organizational one. For most organizations, performance is measured individually and performance reviews conducted individually. But great leaders know it takes a team effort, and a growing body of research suggests that most of individual performance is better explained by the resources and collaboration of the team as a whole—whether high performance or low. So, when coaching members of your team, remember to take into consideration that much of their performance isn’t something they can fix, but rather something in the system or on the team that they need you to fix.

As you review this list, one myth in particular probably stood out to you—depending on your style and your leadership journey. That reaction is a good signal that the particular myth is one to focus your attention on and work on improving. But keep a lookout for the other myths as well. You may not believe them, but you may need to defend your team from other leaders who do. And as you move from myth to reality, your team will move toward greater performance until eventually they, and you, are doing their best work ever.

Image credit: Pixabay

Originally published at https://davidburkus.com on January 30, 2023

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How to Make Your Customers Hate You

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One Zone at a Time

How to Make Your Customers Hate You

GUEST POST from Geoffrey A. Moore

My most recent book, Zone to Win, lays out a game plan for digital transformation based on organizing your enterprise around four zones. They are the:

  1. Performance Zone, where you make, sell, and deliver the products and services that constitute your core business.
  2. Productivity Zone, where you host all the cost centers that support the Performance Zone, functions like finance, HR, IT, marketing, legal, customer support, and the like.
  3. Incubation Zone, where you experiment with next-generation technologies to see if and how they might play a role in your future.
  4. Transformation Zone, which you bring into existence on a temporary basis for the sole purpose of driving a digital transformation to completion.

The book uses these four zones to help you understand your own company’s dynamics. In this blog, however, we are going to use them to help you understand your customer’s company dynamics.

Here is the key insight. Customers buy your product to create value in one, and normally only one, zone. Depending on which zone they are seeking to improve, their expectations of you will vary dramatically. So, if you really want to get your customers to hate you, you have to know what zone they are targeting with your product or service.

To start with, if your customer is buying your product for their Productivity Zone, they want it to make them more efficient. Typically, that means taking cost out of their existing operations by automating one or more manual tasks, thereby reducing labor, improving quality, and speeding up cycle time. So, if you want to make this customer hate you, load up your overall offer with lots of extras that require additional training, have features that can confuse or distract end users, and generally just gum up the works. Your product will still do what you said it would do, but with any luck, they won’t save a nickel.

Now, if instead they are buying your product to experiment with in their Incubation Zone, they are looking to do some kind of proof of concept project. Of course, real salespeople never sell proofs of concepts, so continue to insist that they go all in for the full Monty. That way, when they find out they can’t actually do what they were hoping to, you will have still scored a good commission, and they will really hate you.

Moving up in the world, perhaps your customer has bought from you to upgrade their Performance Zone by making their operations more customer-focused. This is serious stuff because you are messing with their core business. What an opportunity! All you have to do is over-promise just a little bit, then put in a few bits that are not quite fully baked, turn the whole implementation over to a partner, and then, if the stars align, you can bring down their whole operation and blame it entirely on someone else. That really does get their dander up.

But if you really want to extract the maximum amount of customer vitriol, the best place to engage is in their Transformation Zone. Here the CEO has gone on record that the company will transform its core business to better compete in the digital era. This is the mother lode. Budget is no object, so soak it to the max. Every bell, whistle, doo-dad, service, product—you name it, load it into the cart. Guarantee a transformational trip to the moon and back. Just make sure that the timeline for the project is two years. That way you will be able to collect and cash your commission check before you have to find other employment.

Of course, if for some reason you actually wanted your customer to like you, I suppose you could reverse these recommendations. But where’s the fun in that?

That’s what I think. What do you think?

Image Credit: Pexels

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Key Performance Indicators for Innovation

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What to Measure

Key Performance Indicators for Innovation

GUEST POST from Chateau G Pato

Innovation is crucial for sustaining growth, competitive advantage, and relevance in today’s fast-paced market landscape. However, managing innovation can be elusive without clear metrics and indicators. Identifying and tracking Key Performance Indicators (KPIs) is essential for steering your innovation efforts in the right direction. In this article, I will discuss effective KPIs for innovation and illustrate their application through two compelling case studies.

Why KPIs Matter for Innovation

KPIs act as signposts that direct an organization’s innovation initiatives. They provide measurable evidence of progress and help leaders make informed decisions. The right KPIs can foster a culture of innovation, hold teams accountable, align efforts with strategic objectives, and ultimately, drive successful outcomes.

Key Performance Indicators for Innovation

Here are some essential KPIs you should consider when measuring innovation:

  • Number of New Ideas Submitted: Measures the volume of innovative ideas generated within the organization.
  • Idea Conversion Rate: Tracks the percentage of submitted ideas that make it through to implementation.
  • Time to Market: Measures the duration from idea conception to market launch, reflecting the efficiency of the innovation process.
  • Revenue from New Products/Services: Indicates the financial impact of innovation efforts by tracking earnings from newly launched offerings.
  • Customer Satisfaction and Adoption Rates: Measures how well the new products or services are received by the target market.
  • R&D Spend as a Percentage of Revenue: Gauges the investment in research and development relative to the company’s overall revenue.

Case Studies

Case Study 1: Google

Google is renowned for its innovative culture and continuous product evolution. Here’s how they leverage KPIs:

  • Number of New Ideas Submitted: Google encourages a culture of idea submission through its “20% time” policy, empowering employees to spend 20% of their time on innovative projects. This KPI helps Google measure its creative pipeline.
  • Idea Conversion Rate: Google’s X (formerly Google X) division focuses on moonshot projects. Out of numerous ideas, only a select few, like Waymo and Loon, get converted and scaled. Tracking this conversion rate ensures that only the most promising ideas get resources.
  • Time to Market: By measuring the time from concept to launch, Google ensures that innovative products reach consumers quickly. For example, the rapid development and deployment of Google Meet during the COVID-19 pandemic showcased this KPI in action.
  • Revenue from New Products/Services: Alphabet, Google’s parent company, closely monitors the revenue generated from new ventures like Google Cloud, which shows the financial fruitfulness of its innovation efforts.

Case Study 2: 3M

3M is an iconic innovator, known for products like Post-it Notes and Scotch Tape. Here’s a look at their KPIs:

  • R&D Spend as a Percentage of Revenue: 3M allocates approximately 6% of its revenue to research and development. This KPI underscores their commitment to continuous innovation.
  • Revenue from New Products/Services: 3M tracks the percentage of sales from products launched in the past five years, aiming for 30%. This helps them understand the impact of recent innovations on their bottom line.
  • Customer Satisfaction and Adoption Rates: Customer feedback is integral to 3M’s innovation process. They measure satisfaction and adoption rates to ensure that new products meet or exceed customer expectations.
  • Number of Patents Filed: 3M files over 3,000 patents yearly. This KPI reflects their innovative output and secures intellectual property to protect and leverage their inventions.

Conclusion

Measuring innovation is not a one-size-fits-all approach. The KPIs you choose should align with your strategic objectives and organizational culture. By implementing effective KPIs and learning from examples set by industry leaders like Google and 3M, you can better manage your innovation efforts and drive sustainable growth.

Remember, the key is to balance quantitative metrics with qualitative insights to get a holistic view of your innovation process. With the right KPIs, you’ll be better equipped to navigate the complex terrain of innovation and achieve success.

SPECIAL BONUS: The very best change planners use a visual, collaborative approach to create their deliverables. A methodology and tools like those in Change Planning Toolkit™ can empower anyone to become great change planners themselves.

Image credit: Pixabay

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Innovation Quotes of the Day – April 25, 2012

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“Figure out how to take risks that keep you in the game even if you fail.”

– Seth Godin

“Over the last couple of decades, companies have increasingly found that employees who pursue what they do with passion will outperform an employee with a gun to their head every time.”

– Braden Kelley

“Reading, after a certain age, diverts the mind too much from its creative pursuits. Any man who reads too much and uses his own brain too little falls into lazy habits of thinking.”

– Albert Einstein

What are some of your favorite innovation quotes?

Add one or more to the comments, listing the quote and who said it, and I’ll share the best of the submissions as future innovation quotes of the day!

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