A recent article in the Harvard Business Review proposes a new framework for evaluating potential new innovations that goes far beyond the typical criteria of novelty, feasibility and market potential. Instead, when performing a cost-benefit analysis, organizations should look not at the objective size of the benefits, but at how those benefits compare to the initial investment.
Essentially, per HBR, “A concept that offers only incremental benefit but requires little investment might be more profitable than a fantastic idea that requires a lot of investment.” Shifting the focus to efficiency in this way will not only give the organization a better idea of how implementing an idea will affect the bottom line, but also demonstrates how the innovation will actually convert cost into benefits.
More articles on innovation:
Physician viewpoint: Our current healthcare system discourages all innovation
Northwestern receives $46M to advance digital, informatics research
Johns Hopkins wins $633K grant to launch regional digital health exchange
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