KPIs (Key Performance Indicators) are everywhere… Although they are sometimes criticized for their approximations or the poor quality of the message they give out, KPIs have become a widely used measurement tool of which companies now make intensive use to assess the performance of a service, a department or a corporate policy.
When it is appropriately parameterized and targeted, a KPI is also and primarily a formidable communication tool.
However, prevention in this context is better than blind submission... And prevention first requires that you create your own KPIs yourself.
We shall not at this point revisit the interest of assessing the performance of one's actions, and all the associated beneficial consequences, i.e.: identifying and sharing successful achievements, examining possible avenues for improvements and anticipating possible risks.
But this approach is rather unusual in the legal arena, where performance measurement is not easy to demonstrate, as bare figures do not always suffice to reflect the quality of intellectual endeavors.
IP departments are particularly targeted, as the industrial property trade has very close links with the Marketing departments, through their common work on trademarks, and with the IT departments, owing to the domain names.
Intangible rights are estimated in millions of dollars (the latest Interbrand ranking estimated the Leroy trademark at 1,999 M$ and the Darty trademark at 673 M$) and intellectual property is identified as a growth driver which remains insufficiently exploited by French companies - http://www.lefigaro.fr/vie-bureau/2013/10/29/09008-20131029ARTFIG00458-la-propriete-intellectuelle-un-levier-essentiel-de-la-competitivite.php#!
Selecting the right IP KPIs
As should first be recalled, KPIs are used, based on sophisticated calculations (ratios, averages, percentages), to:
- Deliver a simple and accurate message
- Trigger appropriate actions to maintain, or rather improve performance
- Monitor and compare one's efficiency over time
So, obtaining a clear picture of a situation is not so much a question of bare figures (number of files handled; number of cases settled, etc.) but rather of calculated figures (success rate in claims, average claim settlement time).
Considering the foregoing, it is clear that KPIs must be carefully selected; otherwise you won't get the right message across.
There are a number of key questions to be asked to identify the relevant KPIs that deserve to be explored.
- What is the target group? Is it the Legal department? Or the Marketing department? Or the General Management?
- What is/are the message(s) you want to pass out to the Management: performance levels effectively reached; gains achieved; operational efficiency; interaction between the IP department and the Marketing department, etc.
The message to get across and the way the information will be treated will depend on the target group.
What is important to keep in mind is that KPIs should:
- Be readily comprehensible, so that focus should be placed on simple and strong graphic tools such as barometers or diagrams
- Lead to actions
- Be read and commented upon against a reference matrix.
The reference matrix is particularly critical as the target group - especially when external to the area of interest - should have the means to fully understand and analyze the implications of the KPIs.
A leadership team is generally not capable of determining whether the rate of transformation of French trademarks into Community trademarks of 20% is a good or a poor rate! On the other hand, it is fully capable of assessing whether a marketing budget is consistent with the trademark value.
It is therefore necessary, in addition to carefully selecting the KPIs, to build a strong baseline to be used to make the obtained results both comprehensible and actionable.
Our experience shows that such an efficient baseline should be a mix, including:
- A tool for reference over time: key information covering the last two years
- Business information concerning the company: revenues generated by the trademarks; bottom line figures, targets, etc.
- Lastly, and above all, the expertise of your trademark attorney, who has full knowledge of the performance indices to be used and leveraged according to the area concerned, the type of company and the size and nature of the trademark portfolio.
Finally, KPIs may have multiple applications in the area of intellectual property. In particular, and depending on the assigned objective, KPIs may come as particularly efficient tools to assess the price of IP assets in the following cases:
- Assignment of a trademark or a trademark portfolio
- Change in the organizational structure of an IP department
- Limitation or optimization of a corporate IP budget
When it comes to making year-end assessments and preparing new budgets, KPis can be used advantageously to fine tune one's IP policy and communicate on success stories.