Measurements associated with differentiated strategies such as product superiority and product development correlate directly with an organization s ability to innovate. Product development and R&D activities are key drivers for maintaining a continuous flow of new ideas and concepts. Project evaluation is also covered.

Product Development Lead Time The lead time for product development is very similar to production lead time and represents the amount of time required to develop new products from conception to final design. A second component for this metric is the amount of time required to take the newly developed product from final design to introduction to the market. The measurements here might be weeks or months.

Production Innovation This can be measured by tracking the number of saleable new products that have been introduced. A typical time period might be annually and would be determined using the price list or product catalog. In addition to first mover advantage to gain market penetration, new introductions provide pricing leverage, which will provide higher margins in the early stages. This in effect provides double gain higher sales volume as well as higher profit margin.

Amount of R& D Expense This ratio is determined by dividing a company s total expenditures for creating new products and processes by total annual sales. Higher percentages are indicative of the amount of commitment a firm devotes to product innovation.

Product Life Cycle Products have a limited life and they pass through distinct...