16% of organisations use revenue growth from new products or services as a lag innovation metric

McKinsey Quarterly October 2008

Although some organisations use revenue growth from new products or services as a lag innovation metric, this is not always the best approach. For one thing, it can take a long time for new products or services to generate revenue, so this metric may not provide an accurate picture of an organisation's innovation efforts. Additionally, revenue growth from new products or services can vary greatly from one organisation to another, making it difficult to compare results. Finally, this metric does not necessarily reflect the quality or usefulness of the new product or service. In other words, a new product or service may generate a lot of revenue but be of poor quality or be of little use to consumers. For these reasons, organisations should be careful when using revenue growth from new products or services as a lag innovation metric.