Capital market orientation in innovation management
by Tom Sommerlatte
International Journal of Product Development (IJPD), Vol. 1, No. 1, 2004

Abstract: There is a positive correlation between total shareholder return over a period of five to ten years and sustainable innovation performance of companies. ''Outperformers'' in innovation management are likely to achieve higher growth and price-earnings-ratios based on five thrusts of sustainable innovativeness: (1) a corporate strategy giving top priority to innovation and to building a competency platform; (2) a comprehensive innovation process; (3) a flexible organisation favouring innovation behaviour; (4) multiple innovation partnerships; (5) an innovation culture characterised by effective organisational learning and knowledge management. High productivity will typically also be a result of these. Companies can assess, monitor and communicate their innovation performance with the help of an innovation scorecard. Investors, analysts and bankers will be able to use the innovativeness indicators of the scorecard to gauge better the future growth and profitability potential of companies.

Online publication date: Wed, 14-Jul-2004

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