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Importance of Metrics
Customer satisfaction, and hence retention, is always high whenever companies
deliver on quality. However, firms need to understand how efficient their operations are in
achieving the desired objectives. Managers need to have accurate information about their
business performance, and they accomplish this via the development and application of
effective metrics ("What are Metrics and Why are they Important?", 2017). These measures
allow the business to improve while focusing the resources on the most critical aspects.
Companies can employ a broad range of metrics including the mandatory ones and those
meant to track and improve efficiency and profits while reducing savings.
Effective metrics must be readily understood by the employees since vagueness
makes them ineffective in driving the growth strategy. Metrics are a critical part of the
control function since they give an accurate representation of daily measurements ("What are
Metrics and Why are they Important?", 2017). It is easy to manage what is measurable, and
these measures allow managers to determine whether to interfere with a process or not. They
also indicate when a particular process is going according to customer recommendations. The
concrete figures bring an element of objectivity since they alleviate any vagueness that may
cloud the judgment of managers. Metrics also act as a scoreboard for the employees to
compare their performance against the target figures in all critical areas of an organization.
Five Metrics to Measure Innovation
Empirical results have often reported negative, positive, or zero effects that
innovation has on the performance of a firm while most literature understands the importance
of technological advancement (Cruz-Cázares et al., 2013). Innovation is often measured by
considering the inputs and outputs with different variations in every company. The effect of
innovations inputs and the long-term results of the outputs are some conventional approaches.
