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Return on innovation investment (ROI2)
Helps managers answer: To what extent are our investments in innovation generating a return?
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Return on innovation investment (ROI2) vs Return on investment (ROI)
These models cover closely related ground. Compare their purpose, scope, practical guidance, and supporting resources to choose the better fit.
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Return on investment (ROI)
Helps managers answer: How well are we generating sustainable profits?
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Use this when.
Answer the key performance question: “To what extent are our investments in innovation generating a return?”
Answer the key performance question: “How well are we generating sustainable profits?”
Extracted signals
Strengths, limits, and pitfalls.
Return on innovation investment (ROI2)
- Publish a metric dictionary with cost boundaries, benefit attribution, time horizon and treatment of failed experiments.
Watch for
- Do not optimise the pipeline for retrospective ROI2 alone. It can encourage teams to underinvest in uncertain discovery, attribute all launch profit to the latest project, hide failures and ignore learning, cannibalisation or long dated platform value.
Return on investment (ROI)
- Make every ROI auditable: publish the counterfactual, costs, benefits, timing and attribution owner. Distinguish an annual period such as 1 January to 31 December from annualisation. Under a simple convention, 1% for a month becomes 12%, while 10% over two years becomes 5%; a compound annual rate is more appropriate when returns accumulate.
Watch for
- Do not compare marketer, project and investor ROI labels without reconciling definitions. One may use gross profit over campaign cost and another net income over all capital employed. Also avoid confusing annual with annualised return or ignoring risk, cash flow timing and benefits displaced from elsewhere.
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Application bridge
Related templates.
Benefits Realization ReportBenefits Realization Report Purpose. Use this report to show which programme benefits were realised during a defined period, which expected benefits were delayed or missed, and which new benefits have emerged. Each entry should trace to the business case and benefits-realisation plan so decision-makers can distinguish delivered value from completed activity. Application. Benefits become meaningfulContracts Management PlanContracts Management Plan Purpose. Use this plan to define how programme-level contracts will be administered from award through closure. Its purpose is to ensure that contracted deliverables and services meet cost, schedule, benefit and quality requirements while both buyer and seller fulfil their obligations. Application. The plan builds on the procurement management plan and may be maintained aKnowledge Management PlanKnowledge Management Plan Purpose. Use this plan to connect programme participants with useful knowledge, subject-matter expertise and the information created across components. Effective knowledge management reduces reinvention and duplicate work, helps people find proven answers quickly and reserves scarce expert attention for problems that genuinely require new thinking. Application. Prepare thChange Request FormChange Request Form Purpose. Use this form to capture a proposed programme-level change before evaluation and decision. Application. Submit one form for each distinct request, assign a unique identifier and connect it with the change request log. Component teams should follow their own control process and escalate changes whose effects extend to programme strategy, benefits, scope, schedule, cost,