16 Metrics for Managing Innovation: Lessons From Growth Leaders ^Top We found four innovation drivers (and their associated behaviors) strongly associated with the relative rate of organic growth in our sample of 192 companies.16 • Investing in innovation talent: The leadership team signals a strong commitment to innovation through investments of resources and time to recruit, develop and retain innovation talent. • Encouraging prudent risk-taking: Innovative firms foster a tolerance for risk throughout the organization by encouraging learning from innovation disappointments. • Adopting an outside-in innovation process: Growth leaders start with deep insights into customers to anticipate emergent needs and likely responses to innovation. • Aligning metrics and incentives with innovation activity: An innova- tion dashboard creates a credible and transparent link to rewards and recognition for innovation accomplishments. The four bi-polar scales shown in Figure One, measure the extent to which each of the 192 companies applied the corresponding innovation driver to illustrate the differences between organic growth leaders, growth laggards or average performers. (These three groups were identified with a cluster anal- ysis of the measures of organic growth performance.) What is notable about the fourth scale on the alignment of metrics and incentives is the degree to 16 The data from the 192 respondents to the survey were first analyzed using bi-variate correlations to assess the ability of each of the 18 hypothesized variables to explain the variance in a dependent vari- able measuring the organic growth rate of each company, relative to their industry peers. This depen- dent variable was estimated as the optimum linear correlation of three measures: (1) Past performance as measured by the average annual rate of organic growth of revenues in the past five years, relative to competitors, (2) Present spending on innovation relative to competitors, and (3) Confidence of the management team that the organic growth targets in the coming three years could be achieved. There was some ecological correlation among the 18 hypothesized drivers due to the halo effect that besets all surveys, and we judged that combining the innovation drivers in multivariate regressions would obscure specific tests of our 18 hypotheses.