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Innovation Metrics Essay

989 words - 4 pages

Comcast Corporation (Nasdaq: CMCSA), number 46 on the Fortune 500 list (Cacace, 2013), has a broad innovation program that would and likely does benefit from many of the metrics listed in Table 6.2 of Making innovation work (Davila, Epstein, & Shelton, Making innovation work: How to manage it, measure it and profit from it, 2013, p. 173). As a public company, stock price measures and sales and income are important measures of overall success. However, more important for measuring innovation success are the metrics that gauge the increase in customers, revenue, or profits from specific innovation products, or customer retention and loyalty engendered by such innovations. Comcast’s ...view middle of the document...

• Value capture: Number of new product and service lines introduced; profitability of innovation operations; revenues generated through innovation efforts (total revenue, innovation revenue, revenue per innovation customer). (p. 173).
A key metric for a company like Comcast is how many new customers are acquired due to new products (innovation) that also buy existing products or services vs. how many existing customers buy the new products to increase revenue per customer. Both measures of revenue acquisition are key to innovation.
Comcast also has an extensive external portfolio of venture capital investments through its Comcast Ventures (Comcast Ventures, 2014) venture capital arm, which has invested in 75 startups since its inception in 2003 (CrunchBase, 2013). Davila, Epstein, and Shelton’s (2013) portfolio metrics would apply to Comcast Ventures:
• Percentage of innovation efforts devoted to radical, semiradical, and incremental innovation.
• Portfolio balanced over time, risk, and technologies.
• Alignment between innovation strategy and resource allocation. (p. 174).
The innovation portfolio must also be balanced between internal and external resources:
• Level of innovation integration across business units and functions.
• Mix of innovation sources.
• Percentage of innovation projects outsourced.
• Number of strategic alliances. (Davila, Epstein, & Shelton, Making innovation work: How to manage it, measure it and profit from it, 2013, p. 174).
O'Raghallaigh, Sammon, and Murphy (2012) suggest that proper use of metrics in innovation ensures that “corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives” (p. 244).
Key to any innovation effort is the rewards structure within the company in support of innovation. Metrics here would include:
• Performance-based compensation linked to innovation success.
• Budget percent allocated to innovation efforts.
• Investment in training.
• Objectives for innovation clearly communicated to senior managers and employees.
• Percentage of performance measures and rewards aligned and linked to innovation activities.
• Free time allowances for R&D employees.
• Level of empowerment to the strategic business unit (SBU) and functional managers. (Davila, Epstein, & Shelton, 2013, pp. 174-175).
All of Comcast’s senior management has innovation as...

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