The ROI of Innovation


How to identify and justify the ROI of innovation

Aaron Eden | Moves the Needle | February 26, 2016


This post came out of an interview on the Return on Investment (ROI) of Innovation with David Binetti, Founder of Innovation Options, and Brant Cooper, Co-Founder. To see the interview in it’s entirety check out the original Moves the Needle Post.


One question kills more innovation initiatives than any other:

 What’s the ROI for this innovation project?


In early-stage projects with a product that’s not in the market, projections are fiction. In the words of Mike Tyson, everyone has a plan until they get punched in the face, or as Steve Blank likes to say, “no business plan survives first contact with a customer.”


A better question to ask is: 

How can we measure the return for an idea that does not yet exist?


Most large organisations don’t ask this question. It requires thinking beyond the quarterly profit cycle. As a result, many are caught in a catch 22. Without a quantifiable return a project gets no funding; and vice versa.


This puts product managers in an awkward position.

If they answer there is no foreseeable ROI, there is no funding.

If they, more accurately, show lots of up front expenses and no clear ROI, their competency and mental stability come into question.

None of this is favourable. The current model is so ill-equipped to account for innovation that the result is often no innovation at all.

This is what David Binetti, a six-time entrepreneur and pioneer of the Innovation Options framework, calls “a race to ridiculousness.” A cooperative, delusional mindset ending in failure and frustration for all involved. One that puts your innovation efforts at a dead end before they begin (and jeopardising the company’s future).

Like many problems, the issue rests on how we approach and understand the role of innovation within large organisations...

...continue reading on Moves the Needle

Lauren Scalora