Benchmarks

Wasting Your Useful Internal Benchmarks

It seems that the argument is over: most companies have embraced the false promises of external benchmarks. They will annoy their employees and customers with irrelevant questions and lengthy surveys, spend enormous sums of money, and waste irretrievable time in order to learn whether they finished 7th or 9th this year compared to other companies in the same industry. Often the organization cannot use these results to determine WHY they fell short in certain areas or WHAT they can do differently to improve.

What a waste. “But Doc, bench marking and comparisons are important!” Yes, INTERNAL benchmarks have been repeatedly demonstrated to yield enormous insight and improvement. The most useful benchmarks are:

  1. Compare your performance at Time 1 with your performance at Time 2.
  2. Compare performance of one employee to another or one department to another.
  3. Compare your performance against pre-set goals.

Unfortunately, many organizations choose #4: “Ignore all our easily accessible internal numbers that we should be monitoring anyway and instead pay some vendor who can tell us 6 months from now where we rank on irrelevant criteria today.”

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Is there truly an organization exactly like yours? You may find two identical snowflakes before you find two identical organizations. So why do executives crave comparisons against other unique organizations within the same market when they can easily (and far less expensively) gather data on the three most useful internal benchmarks?

A story: Years ago, my University provided us faculty with overall ratings given by our students compared to those of the “national average” (benchmark). It did not matter that my ratings had improved from the prior term teaching the same course or that my scores were the second highest within my department. No, the benchmarks showed that 23% of professors participating in the vendor’s sample had higher scores and the conclusion was my annual performance was “average”.

But but but… I sputtered, are these professors teaching their courses for the first time or the 5th time? Are their students primarily non-majors like mine? Are they teaching to 10 students or 200 students in this course? Do they have access to the Internet and efficient teaching gadgets in the classroom? It did not matter. Even though my students, teaching methods, content, and classroom technology made my course unique, my student scores were rolled up and compared to all professors at the 60 other colleges in the vendor’s sample.

So how do I improve compared to my “peers?” Who knows. That insight was not provided. The university was pleased that their huge financial investment yielded comparison data to determine our salaries but it did nothing to improve a single aspect of teaching or student learning term after term after term.

Does that sound like your organization? At the individual level none of us wants to be compared to some ambiguous group of people “similar” to us on a couple of characteristics. So why do executives insist on comparing their many individuals (i.e., their organization) with others? It is wasteful and counter-productive. Unless, of course, your business is selling canned surveys with benchmarking reports. /Doc