Innovation is a difficult phenomenon to evaluate. Innovation impacts the firm in a variety of ways. It is difficult to analyze the full impact of innovation because there is no single set of metrics that can capture its full significance. The metrics that have been traditionally used only capture a fraction of the true benefit derived by the firm. In addition, since the circumstances, values, structure and strategies vary greatly between industries and firms within industries, the efficacy of specific metrics fluctuates from application to application. An unmeasured and often neglected area of innovation deals with the ideas that, for a variety of reasons, fall by the wayside. This paper examines the uncounted valuation aspects of innovation that occur independent of the market success or failure of the innovation product. These are benefits to the organization that may accrue from discarded or abandoned ideas or innovation products that failed in the marketplace. The sources of innovation valuation error are discussed as well as strategies for maximizing the value of failure and reevaluation.
