How do you measure a company's ability to innovate? One metric that might seem logical, given their traditional association with invention, would be patents—the number of them that a company holds.
But patents are a tough metric to use for innovation. Adding up the number of patent holdings, for a variety of reasons, can be a flawed way to get a good picture of a company's innovation prowess. While they're helpful indicators in some industries, such as chemicals or pharmaceuticals, they don't offer a broad enough assessment of the pioneering business processes or unconventional strategies in less product-focused industries, such as retail.