Hello Innovator!

This week, we're diving into the concept of the Innovation Premium. We'll explore how to quantify this often-overlooked metric and why it matters for your organization's future. Understanding and measuring your Innovation Premium can provide valuable insights into how the market views your company's future potential.

Here’s what you’ll find:

• This Week’s Article: What Is Innovation Premium and Why Should You Care?

• Share This: Try out our FREE Innovation Premium Calculator

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What Is Innovation Premium and Why Should You Care?

Investors don't just bet on products.
They gamble on the future.

Every corporate innovation leader talks about growth. But public market analysts, institutional shareholders, and equity strategists are placing bets on something more specific: how the market perceives a company’s future innovation potential.

That’s where the concept of Innovation Premium comes in.

At its core, Innovation Premium is the portion of a company’s market value that cannot be explained by its current cash flows, products, or services. Instead, it reflects market belief that the company will continue to create high-value products, services, or markets in the future.

How It’s Measured

Firms like HOLT (UBS) compare your market cap to the value of your existing operations. The difference? That’s your premium. 

It’s how much runway the market thinks your innovation engine can generate.

This premium reflects how much future value the market attributes to a company’s current innovation trajectory. It’s not a belief in innovation for its own sake,  it’s a valuation of what that innovation is likely to yield.

Capital markets are judging. They're asking, "based on your current trajectory, how much more value are you likely to create before you sputter out?"

It’s not numbers, it’s narrative.

Markets don’t wait for results. They move on stories. If the world at large believes you’re building what’s next, they reward you. If they think you’re stalling? Your stock price plummets.

This is where innovation leaders come in. You’re not just building new things, you’re shaping how the market values the company itself. 

That’s a heavy responsibility.
But it’s also power.
And it’s measurable.

The market’s expectations set the tempo for your entire org. Your innovation strategy shapes board decisions, partner alignment, and employee confidence. 

Innovation Leaders Own the Clock

You’re not here to ship features. You’re here to shape the future. You’re not just responsible for execution. You’re responsible for helping the company outlive its current success.

Your job is to build the infrastructure — and the conviction — that something beyond the current business model is not only possible, but both necessary and inevitable. Your job is to create the conditions for future growth to exist, long before the rest of the organization sees the need.

That's both an opportunity and a huge responsibility, especially in organizations that don't already have a strong culture of innovation. Innovation leadership is one of the few roles in the enterprise with permission,  and a mandate, to build the future.

You’re the hinge between what the company is and what it still could become.
That’s leverage.
If you want more influence, this is where it starts.

Show how your work defends longevity. Show how it drives valuation. And fight for the strategic seat that reflects the value you’re already creating.

A strong innovation premium gives you credibility and space to operate.
A falling one triggers scrutiny.
And if it disappears, so does your runway.

This is what real innovation leadership demands:

• Making the future tangible enough that the market starts pricing it in.

• Giving the company a credible second act, before the first one runs dry.

• Defending relevance through execution, not inspiration.