Benchmarking: Tracking Your Impact
In addition to measuring a Venture Development Organization's impact across the four key metrics – jobs created, revenues earned, wages paid, and investments attracted – a VDO also should benchmark its activities. There are lots of approaches, many of them more detrimental than helpful.
Avoid Comparisons Pitting Organization Against Organization
There is a strong tendency in the innovation support field to benchmark by comparing one organization’s results to those achieved by other organizations. This approach is fraught with problems, mostly stemming from the difficulty establishing true "apples to apples" comparisons. VDOs rarely are positioned to be compared accurately against each other because of organizational and regional differences. There are simply too many variable factors that shape the design, resources, development and impact of venture development organizations to find two or more similar enough for comparisons.
A Better Approach: RIAN's Fifth Key Metric
RIAN suggests a better alternative that results in a more meaningful understanding of performance and progress: tracking performance in the four key metrics over time.
This is RIAN's fifth important metric: time in place – the change the VDO is affecting in its region over time. With this approach, benchmarking can be accomplished by comparing VDO client growth to more appropriate standards: national/state/regional averages, statistics for industry sector, control groups, or other normalized measures for the four impact metrics.
Better still, tracking performance over time also enables the VDO, and those wanting to ascertain its success, to create a baseline in these key metrics to allow benchmarking VDO performance against itself. Ideally, this is done at the outset of a VDO's operations, so that overall economic impact can be compared against a pre-VDO starting point across these metrics. However, this baseline can be established after the organization has started creating and capturing impacts.