How to Measure Innovation in Your Company: ROI, ROI2, EBITDA, NPV, IRR and More

Corporate innovation programs often lack measures to control and assess the return on investment. Different indicators are used to consider the profitability of innovation projects, such as EBITDA margin, rate of renewal, ROI or NPV. There is a need to separate the value of the idea portfolio from the cost to incubate and generate those same ideas. The right KPI and indicators must be chosen to evaluate an innovation portfolio. Value should be placed in ideas regardless of their stage, with a distinction between ideas and investment. ROI2 needs to be measured to track the efficiency and quality of the innovation management process.