Sample Business Paper on Evaluate Performance Metrics

Evaluate Performance Metrics


Modern business environment is performance-based, and managers need performance metrics to assist in evaluating progress against the goals of the organization, and measure business efficiency and effectiveness. Most organizations utilize workload measures when assigning and managing resources. Measures and metrics are important to a business because they enhance credibility and can have a positive impact on staffing, decision-making, budget, program activities, and priorities (Cruz-Cázares, Bayona-Sáez, & García-Marco, 2013).

The Importance of Metrics

One of the importance of metrics is that it improves profits by lowering process costs and enhancing productivity and goal achievement. For example, performance metrics such as the Balance Scorecard enable organizations to match their strategic processes with the strategic plan (Balance Scorecard Institute , 2017). Performance metrics enable organizations to measure the efficiency of their processes, and provide a concrete basis for identifying the business processes that need improvement. In addition, performance metrics allow executives to identify the most effective practices in an organization and implement them in other areas (Balance Scorecard Institute , 2017).

Performance metrics can lower risks by providing clarity that enables faster and better decision-making in budget and control processes. Metrics promote accountability and offer incentives based on concrete data as opposed to narratives and subjective decisions (Balance Scorecard Institute , 2017). Metrics are important in driving improvements and assist organizations is focusing on resources and people. Other benefits of metrics to a business include directing strategy in an organization, assisting organizations to focus on what is important, and enabling good in-house and external public relations (Balance Scorecard Institute , 2017).

The Five Metrics to Measure Innovation

One of the key metrics to measure innovation is the return on investment (ROI). This metrics deals with two measures and they include financial returns and resource investment costs. It enables innovation managers to exercise fiscal discipline and assist in the recognition and justification of the importance of strategic programs, activities, and the entire investment in innovation (Kaplan, 2017). The key inputs in ROI include the percentage of capital used in innovation programs; for example, examining ideas for new services and products. The proportion of internal vs. external inputs used in the innovation process are measured as well using this metric. The last key input is the proportion of new services, products and businesses that have been introduced in the new markets in the previous year. The key output metrics in measuring RIO include the proportion of revenue generated from services or products. Real vs. targeted profits; as well income from license or royalty from intellectual property/patents are also evaluated into comprehensive ROI estimations (Kaplan, 2017).

The second metrics used to measure innovation is organizational capability metrics. It concentrates on infrastructure and innovation activities meant for creating continuous and sustainable methods of invention and re-invention. The inputs used to measure organizational capability metrics include the percentage of employees who have been given training and tools to assist them to innovate; for example, guidelines on how to estimate market potential (Kaplan, 2017). The establishment of formal processes and infrastructure to help in innovation as well as the proportion of new skills and competencies that come up because of innovation can also be included into estimations. The output metrics include the proportion of innovations that play apart in advancing the existing business and the number of new opportunities in the market available to the company (Kaplan, 2017).

The third metrics used to measure innovation is leadership metrics. This metrics deals with the type of behavior that executives should engage in to encourage innovation within the company. The input metrics used to measure the role of leadership in innovation include resources, investments, and behaviors that are key to achieving the desired results (Kaplan, 2017). The key inputs include the proportion of time leaders spend on strategic innovation activities compared to day-to-day operationsand the proportion of managers who have been trained on concepts and tools used in innovation. In addition, it estimates the percentage of services, products, or strategic innovation projects that have been assigned to executive sponsors. The output metrics refer to the desired results; for example, the proportion of managers that assume leadership of new business categories (Kaplan, 2017).

The fourth metrics used to measure innovation is the scope of ideas generated. Senior leaders in an organization do not have exclusive rights to come up with excellent ideas. In most cases, the best ideas come from people who are close to consumers such as sales representatives (Anthony, Johnson, & Sinfield, 2008). For instance, Starbucks motivates its baristas to convey the ideas that customers have on new products to the company’s headquarters. Lastly, the number of patents an organization files can also be used to measure innovation. This approach of measuring innovation may not be effective for companies that do not deal in technology, but when combined with other approaches, it can be an effective measure that encourages companies to constantly develop technology (Anthony, Johnson, & Sinfield, 2008).

Five Metrics to Measure Marketing Strategy

            Marketing strategy is often measured using a variety of metrics that combine marketing and financial metrics. The general metrics used to measure marketing strategy include market share (units/dollars), satisfaction (brand or product), awareness (brand/product), preference (brand/product), loyalty, total customers, and perceived product quality among others (Mintz & Currim, 2013). The financial metrics that correspond to the aforementioned metrics include return on investment, net profit, net present value, return on sales, target volume, and stock prices among others. The financial metrics act as indicators of whether the targets of marketing metrics have been achieved (Mintz & Currim, 2013).

The second group of metrics used to measure marketing strategy combines traditional advertising with financial metrics. The metrics observed in traditional advertising include impressions, customer reach and recall. The corresponding financial metrics that indicates whether traditional advertising has achieved its marketing goal include cost per 1000 impression, lead generation, cost per customer acquired, and internal rate of return (Mintz & Currim, 2013). The third metrics used to measure marketing strategy is internet advertising with metrics such as click-through rate, hits/visits/page views, and impressions. The corresponding financial metrics include internal rate of return, conversion rate and cost per click (Mintz & Currim, 2013).

Reaching consumers directly is another common marketing strategy. The metrics used to measure this strategy include the rate of new customer retention, the number of responses elicited by the campaign, and customer reach. The financial metrics that indicate the success or failure of direct consumer reach include lead generation, conversion rate, and cost per customer acquired (Mintz & Currim, 2013). Social media is another popular marketing strategy. Some of the metrics used to measure social media campaigns include volume of coverage by media, the number of follower tags and page views/visits/hits. The financial metrics that are an indicator of the effectiveness of social media campaigns include total costs, cost per exposure and lead generation (Mintz & Currim, 2013).

Price promotion is also commonly used marketing strategy. Some of the metrics used to measure the effectiveness of price promotion include repeat ratio or volume as well as reach and impressions. Financial metrics that indicate the success or failure of this marketing strategy include internal rate of return, redemption rate, and promotional sales (Mintz & Currim, 2013). Pricing is a marketing strategy with metrics such as relative price, reservation price and premium price. The corresponding financial metrics that measure the effectiveness of this approach include optimal price, price elasticity and unit margin. New product development is another marketing strategy. The metrics developed to measure this marketing strategy include expected yearly growth rate, attitude towards a product, and the belief in new product. Financial metrics used as an indicator of the effectiveness of a new developed product include internal rate of return, expected margins, and level of cannibalization (Mintz & Currim, 2013).


            Return on investment is one of the key measures of innovation that I would use in my company because it captures the resources invested and financial returns. This variable metrics gives an accurate standing of a company in terms of innovation. Low return on investment implies that the innovative measure or the new product and services the company has developed are not selling. A high return on investment means that the products, services and the business procedures in an organization are effective. Concerning marketing strategy, the metrics I would use in my company is market share and the financial metrics that correspond to it such as return on investment, net profit, net present value, return on sales, and target.




Anthony, S. D., Johnson, M. W., & Sinfield, J. V. (2008). Innovation metrics. Retrieved from Havard Business :

Balance Scorecard Institute . (2017, May 9 ). Top ten reasons for a performance measurement system. Retrieved from

Cruz-Cázares, C., Bayona-Sáez, C., & García-Marco, T. (2013). You can’t manage right what you can’t measure well: Technological innovation efficiency. Research Policy, 42 , 1239–1250.

Kaplan, S. (2017). Measuring innovation to drive business growth. Innovation Metrics for Business Leadership and Growth, 1-11.

Mintz, O., & Currim, I. S. (2013). What drives managerial use of marketing and financial metrics and does metric use affect performance of marketing-mix activities? American Marketing Association