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To calculate the success rate of traditional innovation processes, the study averaged the success rates cited in 12 sources, including the Harvard Business Review, the consulting firm Frost & Sullivan, the professional services firm PricewaterhouseCoopers, the Product Development Management Association (PDMA) and the Corporate Strategy Board. The average innovation success rate across all 12 sources was calculated at 17 percent.
As part of the study, representatives from 43 companies were interviewed, resulting in the identification of 21 launched products that were created using ODI. The launched products were classified as a new product or service, an enhancement to an existing product or service, or an operational enhancement.
The success rate for products launched using ODI was 86 percent, while traditional innovation methods yielded an average success rate of 17 percent.
The companies were then asked if these launches were successful in improving revenue, market share, customer satisfaction or return on investment (ROI). Companies indicated that 18 of the 21 products (or 86 percent) were successful based on one of these four metrics.
Commentary from study participants during the research process revealed the companies also felt that Strategyn’s jobs-based approach offers distinct advantages – from better product development, to creating a more cohesive organization across engineering and marketing, to being able to dispose of unprofitable ideas quickly. ODI helped the companies that participated in the study focus their resources on the most profitable activities.
As the name implies, ODI begins with an understanding of all the customers’ needs and which of those needs are unmet. Having this insight in advance of idea generation, companies can eliminate the guesswork and risk when generating new ideas. Strategyn gathers and processes information on customer needs through qualitative and quantitative research coupled with its proprietary processes.
Specifically, the study:
For more details, readers may reference the Innovation Track Record Study, which outlines the research goals, methodology, success metrics, and results.
By Janet Bumpas