3 Key Takeaways When Benchmarking
I am a runner. As a runner, I think don’t think the majority of us run in order to win, but as a way to better ourselves. To set goals and continuously get better than where we started. For example, when I run, I look at my split times so I know what my average pace per mile is. Then, when I go out, I track whether my pace has improved or if I have stagnated, and I use that information to push myself to do better.
In relationship to business, I think most organizations have this mentality as well. “Let’s be the best.” “Let’s do better.” Whether that be the best restaurant, IT company, and so on, organizations want to be the best in their industry. Here, benchmarking becomes crucial because it helps organizations track their progress. How do you stack up compared to the competition?
Typically, organization use this data to compare themselves to others in the industry. After all, who doesn’t want to be the best?
A Model for Organizational Success
Let’s look at some of those names in Fortune Magazine. In 2017 Fortune 500, which compiles the names of the largest corporations in the United States, Digital Editor, Andrew Nusca describes these organizations as “the bedrocks of the American economy.” Nicholas Varcharver, Assistant Managing Editor, even goes on to say that “[Fortune 500] is the testament of business success.”
Sounds pretty great, doesn’t it? If these organizations are the pillar of business success, we should be more like them. Because of this, we find ourselves trying to model our organization after them. We read about these companies — the culture, leadership style and tips from the CEO — trying to create the 10-step model for business success. We use our benchmark data to compare ourselves to these Fortune 500 organizations because we, too, want to be seen as the best.
But while it’s great to strive for the best, when you’re always shooting for the stars, you miss the small opportunities before you. This can be anything from a missed opportunity to collaborate with someone or to rejecting a proposal that could launch you beyond the stars with time.
Being the Best of the Best
If you’re simply looking for a direction for your organization to move in, then looking at those Fortune 500 companies is a good start. It can help you formulate a direction. The same thing can be applied when looking within your industry to see who’s the best. However, be careful when it comes to comparing yourself to other businesses for these reasons:
Typically, when we see what makes another organization successful, we want to replicate it. After all, if that aspect makes the competition successful, perhaps integrating it will push us ahead of the competition.
But this is where the misconception lies. A business is successful due to its culture, and you cannot copy culture. You can develop a culture that is similar to another organization, but it cannot be copied. Similar to personalities, culture is personally created by an organization. Your culture becomes your formula for success, and, typically, copying someone else’s formula will not drive the same results in your business. You can learn tips from other organizations, but every organization has its own growth path to follow; its own challenges to overcome. Just because two personalities are similar, it doesn’t mean that they will see the same results.
And if you’re taking on a culture that doesn’t resonate with you or your people, in the end, it will do more harm than good .
Where you Are & Where You’re Heading
Earlier, I touched on people’s purpose for running. Someone who is running to simply improve themselves will approach training differently than someone who aims to win the race. This same concept can be applied when looking to organizations in your industry to benchmark against. Depending on their purpose, their approach can be completely different from yours, and thus, their definition of success is also different. If you are aiming to win the race, benchmarking gives you important analytics, but it isn’t what delivers results. I compare it to the time on the stopwatch. It’s a measurement. However, what kind of training do you need to do to impact the time on the clock? What is your nutritional plan? How does that effort impact your wellbeing, mood and outlook on your ability to hit your target? You get the picture. If you know where you are and what you are moving toward, you can then discover the unique drivers of success for your business. Are you measuring what’s important, which, in turn, will guide your organization to achieve those objectives?
Neglecting the Little Guy
While you’re busy comparing and competing with the big competitor in California, a fellow Wisconsin organization is surpassing you. This organization doesn’t even have to be in your industry, but perhaps they are partnered with a local competitor of yours. While you’re struggling for one big deal, local businesses have gathered enough experience under their belt that bigger organizations are more willing to take a chance with them — allowing them to grow. Not only that, but they may have an easier time recruiting and retaining talent because their people are committed to their growth.
There’s a fine balance that is needed when you benchmark your progress. Benchmarking your progress and comparing it to others can help you determine goals towards self-improvement, but there are things to be mindful of. Because there are so many factors to consider, just remember that:
- Replicating someone else’s culture doesn’t mean success.
- It’s important to not only focus on the large opportunities, but also the little ones as well.
- Success means something different to everyone. Every organization has its own formula for success. What’s yours?