28 Metrics for Managing Innovation: Lessons From Growth Leaders ^Top insights, have a demonstrable impact on business results, can be influenced by management action, and will be trusted by the organization? The reality for Merck, as with all pharmaceutical companies, is that they need to evaluate 10,000 new compounds a year, with six to 12 years per drug launched spent in development, and 92 percent of their development bud- get is spent on failures. Their best metrics were: time spent in each development phase (compared with competition), mean time to failure and the full economic value of the drug pipeline. Henkel, the German packaged goods giant sees a very different market reality. Many small and new products are launched each year, failure rates after launch are very high, development times are short and compet- itors match successful moves quickly. Their choices of innovation metrics were strongly influenced by an internal study of 2,237 new products launched by themselves and four competitors over three and a half years. There were striking differences between companies in the returns from their new product efforts as revealed by measures of new product share, relative number of launches (actually an indicator of activity, but not necessarily progress), new product launches that gained more than 1 percent market share, and average brand share change, which showed whether new products were building share or just replacing their existing products. The innovation metrics dashboard is also a part of a firm’s overall dashboard of performance metrics, reflecting their strategic priorities and organizational imperatives. For example, Mack Institute partner JPMorgan Chase has HR metrics to assess their ability to attract and retain talent and promote an innovative mindset. One is JPMorgan Chase’s App Store rating, which is among the highest of all banks. Another metric is the extent to which senior They need to evaluate 10,000 new compounds a year … and 92 percent of their development budget is spent on failures.