We don’t often use the term outright, but benchmarking is a widely used and very successful management technique. Think a bit about your own experiences and I’m sure you can come up with examples where you compare “your numbers” with “their numbers” and use the result to drive change. Some of our own Pathfinder episodes talk about benchmarks under their stealth aliases (index, model) where great success has come in many different ways.
In a simplified example let’s think about a benchmarking as defining a key metric, then comparing it to:
That same metric from other organizations
That same metric from our own organization over time
Let’s then extend the idea a bit by listing a bunch of factors that drive a metric so we have a checklist – the number of checks on our list compared to the total number of possible checks becomes a whole new benchmark! Isn’t this fun?
Setting a goal (benchmark) is a basic element of management success – “you can’t manage what you can’t count” and all that. Listing out steps to attain that goal is another important technique to break down what to do, understand what all needs doing, assign, track and so forth and so forth. I know I’ve done this many, many times and I’m sure you have also.
That’s all good, and perhaps even a bit obvious really when you think about these simple examples. But why does it work so well? What is it that makes this simple concept so incredibly powerful in the real world?
It’s all about people. Bring a team together and give it a goal. Next, most importantly, give the team motivation and dedication.
Set a goal
Benchmarks are goals, and we all love goals. Knowing what it is we need to achieve brings clarity and commitment and with that a sense of purpose. It’s hard to rally around some hazy notion of “customer satisfaction”, but put a few metrics around it (response times, in call fix ratios, survey results…) and suddenly the team knows exactly what to do.
Sometimes setting the goal takes a bit of work, sometimes a LOT of work. Putting measurable numbers to a goal isn’t always easy.
Not everything is easily measured. E.g. what exactly IS response time anyway and how do we record it?
Not every measure is provably the right measure. E.g. why is “in call fix ratio” important as long as the fix eventually arrives?
Not everyone will agree to the number. E.g. What IS the best level of satisfaction – customer friendly or cost friendly?
The goal setting process itself can be a healthy and productive experience as stakeholders come together to discuss and agree.
Worthy goals focus teams on getting done all those things that need doing and allow the team to legitimately NOT work on things that are therefore not a priority.
Goals define the win
We love to succeed, and attaining a goal gives us a sense of accomplishment and purpose. It is very fulfilling to know that the effort and emotion that goes into our job has a purpose and benchmarks make that connection.
People who believe in something and connect their effort to a goal just simply feel better and respond at a deeper emotional level than those without a connection. That emotion and self-generating good feeling from “winning” encourages higher performance from within. People who just want to do more and do better for their own personal satisfaction are what we call motivated.
The power of motivation, in my own opinion, the single most important thing in an organization. You can fuss and chip away at a million little day to day details and drive a 5% improvement. You can motivate your team and a 30% improvement will show up as if by magic. OK I made up the numbers a little bit but I’m pretty sure they make the point.
Teams that know the goal, where they stand (“the score”), and what needs doing to attain that goal will keep working and working even in the face of distractions and minor setbacks. They don’t need micro-managing; they will do it on their own. This is dedication.
The interesting thing about keeping score is that it is always a good thing. Some managers fear scorekeeping if their team is losing but (in my own experience anyway) this fear is slightly misplaced. The worry is that losing makes a team anxious, maybe confused and then disconnected or unmotivated. I suggest that it’s lack of clarity that generates those undesirable things. Teams that are confident in the goal and trusting in their management will work through the rough patches. In my own history I’ve seen this happen and the results are amazing and rewarding in many ways.
As with all things in the real world, it’s not all sunshine and light with benchmarking. Here are a few things to watch for, as they can get in the way of success.
Defensive reactions. Sometimes setting a goal makes people feel like they’re being criticized for not already being at that desirable state. Make sure you position the goal as “let’s just shoot for better”.
Irrelevant metrics. If the comparators aren’t relevant then the team won’t get behind them and you’ll waste a lot of time and energy. For example, how relevant are the customer satisfaction metrics for Walmart to those for your local hospital? If you leave the door open to arguments about relevance you can get quite distracted.
Endless data. Because there are so many possible things you can put on “the checklist” you can get to a point where more data doesn’t yield better results (or worse). Be thorough but not suffocating.
None of these are necessarily show stoppers but they can distract and make a great thing merely a good thing.
Done well, benchmarks give
For the win.
Ron Begg is the strategic vision and organizational spirit behind Pathfinders. His years of proven management experience, coupled with his open, honest, and productive style, have brought Pathfinders further and faster than we could have imagined. Ron embodies the Pathfinders values of being credible, humble, excellent, curious and kind.