What is Your Organization’s ‘Innovation Premium?’

Forbes magazine's list of the World's Most Innovative Companies bases its ranking on a metric called the Innovation Premium. How does your company stand up using this measure of innovation success?

The second annual ranking of the World’s Most Innovative Companies from Forbes magazine is out – did your company make the top 100 list?

Salesforce.com, Alexion Pharmaceuticals, Amazon.com, Red Hat, and China’s Baidu lead the way as the top five. Maybe these aren’t the companies that come to mind when you read the headline - so how did Forbes make this mysterious calculation? The magazine ranked global innovators using the Innovation Premium, an interesting method of allowing the old school crowdsourced wisdom of investors and stock price to predict how an organization will increase its value with new products, services and markets.

“The Innovation Premium is a measure of how much investors have bid up the stock price of a company above the value of its existing business based on expectations of future innovative results (new products, services and markets).”

What is your Innovation Premium? Will the value of new and future offerings help your enterprise be worth more than the current valuations would suggest? If not, where is that pathway to get back on the growth track?

By Chuck Frey

About the author

Chuck Frey Senior Editor, founded InnovationTools.com and served as its publisher from its launch in 2002 until the partnership with Innovation Management in 2012. He is the publisher of The Mind Mapping Software Blog, the definitive souce for news, trends, tips and best practices for visual mapping tools. A journalist by trade, Chuck has over 14 years of experience in online marketing, and over 10 years experience in business-to-business public relations. His interests include creative problem solving, visual thinking, photography, business strategy and technology. His unique combination of experience and influences enables him to envision new possibilities and opportunities.