IBM Corporation

Developing a Framework to Evaluate Innovation


  • Delineate the key elements of innovation
  • Identify market opportunities
  • Create benchmarks to distinguish success


  • Empirical data to determine what works


  • Innovation Maturity Model

In 1999, IBM's then-CEO Lou Gerstner called his executives to task. Why, he wanted to know, was IBM missing market opportunities on which other companies were capitalizing? That question revved up IBM's Emerging Business Opportunities (EBO) initiatives and jump-started the activities of the company's integrated product development team.

Through IBM's work with its (EBO) initiative, the company realized it couldn't treat the development of completely new products and technologies the same way it treated ongoing product development. The EBO initiative introduced a different set of rules. For example, it's impossible to do a clear business case or an accurate market projection before the breadth and depth of any technology's potential use is known. So, best practices in the EBO phase supplement traditional business analysis and market projections with efforts like technology diffusion studies. One of the goals of IBM's EBO phase was to grow revenue by finding the potential breadth and depth of a new technology's application. That information, combined with the current market size of the potential applications, gives insights into the relative value of an emerging opportunity.

But even with a clear vision of the path toward pursuing opportunities, IBM had no objective way to measure the many processes involved. That's when the IBM corporate EBO process architects contacted PDC. With 14 years of client work and a database of innovation best practices, we were able to provide the hard data to help IBM sort out what works and what doesn't. What are the key elements of innovation? What differentiates success from failure?

Companies whose bottom lines are driven by innovation are good targets for applying an innovation framework such as the one developed by IBM and PDC.