Emerson Electric's Innovation Metrics

Large companies, where data-driven decision-making rules the roost, have long sought ways to measure innovation. Emerson Electric thinks it has the answer

BusinessWeek, June 5, 2008 — Emerson Electric (EMR) is a company that embraces numbers. If something can be measured, the fast-growing industrial conglomerate doesn't hesitate to do so. On a wall at its St. Louis headquarters, photos of 2,000 Emerson managers hang in ranked order—from Chief Executive David Farr on down.

So as the company has sought to improve its innovation efforts, it has turned to—what else?—a new metric. With 140,000 employees and 52% of its $22.5 billion in sales coming from outside the U.S., the company, like many others its size, had set an arbitrary goal for its 60 far-flung business units: make a third of sales from products released in the past five years. Now Emerson is taking a different approach to tracking new-product sales—one it considers more insightful, revealing, and effective.