Innovate or Perish: Managing the Enduring Technology Company in the Global Market

Operational and Financial Metrics

SBC Knowledge Ventures has divided operational and financial metrics into three distinct categories: business value metrics, portfolio metrics, and asset opportunity metrics. Business value metrics aim to assess performance in securing and creating value through the active commercialization of the IP portfolio. In particular, these metrics include assessment of average licensing rates, overall revenue per transaction and cumulatively over the active portfolio, and valuation to price ratio noted earlier. Business value metrics also assess cost coverage ratio of the unit. This provides a basis for understanding how well the primary resources (human capital, in the case of IP management) are being employed to achieve the revenue results of the organization. A related metric under the asset opportunity category tracks the cost coverage ratio against valuation on an IP asset group basis. This metric provides an important guidepost regarding which transactions and assets merit further pursuit, or conversely, how much value must be returned to exceed the cost of the transaction. This is particularly important in ensuring that smaller transactions are managed to limit complexity and time to close.

The business value metrics provide valuable insight to the profitability of the IP operation and its contribution of value to the overall firm. In particular, these measures focus on the heart of the “market and commercialize”–oriented strategy by signaling how ...