DeSai's "Innovation Performance Index (IPI)"
Financial Performance and Innovation
Many organizations believe that innovating is a risky endeavor and it is inevitable that additional resources will be allocated to innovation activities. Our research shows, when innovation is supported at the executive level and driven successfully throughout an organization on a continual basis, it will increase an organization's competitive strength and improve market results.
"The key to innovation success has nothing to do with how much money you spend. It is directly related to the effort expended to align innovation with business strategy and customer insights, while managing people and the entire process with discipline and transparency."
- Jatin Desai, CEO.
Innovation Performance Index(IPI)
DeSai has developed our own financial index for innovation. We looked at over 270 internationally publicly traded organizations across all major sectors. We then developed our "Innovation Success" criteria and categorized these companies by their financial performance and innovation attributes to help identify the very best as the world-class innovators.
As an example criteria, a company must demonstrate innovation that produces at least 5% of company's total revenue within 3 years after commercialization, and grows to at least 15% (with equal or better margin) within 7 years. Other IPI Criteria (but not limited to) were:
• Company must be $1B+ in Revenue
• Company must be in business for 10+ years
• 75% of revenue must be from products & services created from within.
• Must demonstrate positive top-line and net-earnings for last 3 years continuously
• At least 15% of total revenue must be from products created in last 5 years
Currently, DeSai's Innovation Performance Index(IPI) included 23 global companies("23 Innov" below).
The IPI Index provided 134% increase in stock performance while DOW, NASDAQ, S&P, CACC40, and NIKKEI all provided either negative or less then 6.5% return over the same period from December 2003 to June 2009 (see below). Even during the toughest economic period of 2008-2009, the IPI Companies recovered with much faster pace then others - demonstrating agility, nimbleness, and resilience in the culture of these companies.