I remember being trained on the Baldrige Model quite some years back and quite liking the concept that a metric did not mean anything unless it had a trend, a comparative, and a benchmark or goal. the statistic (e.g. 15% gross margin) could mean anything, or its opposite, depending on the trend, comparisons and the goals.
That brings me to an interesting discussion on choosing your benchmarks. Since that has such a huge role in defining your story, and since one has such a huge flex on deciding benchmarks, wouldn't that be the Achilles' Heel of determining your future actions, and your success? Example - if my headcount is 100, and a competitor is at 200 at the same business value, I could be at double employee-productivity. But then maybe another country in my company is operating at twice that productivity already. Maybe I can look at a benchmark in a different but similar industry and find another story there.
Truth be told, a company is a group of people. People try to maximize utility (in theory, don't get me all behavioral here), and they will pick benchmarks that make them look good. I have rarely seen benchmarks being questioned, leave alone audited, in a company. Herein lies the loophole.
But hang on, I am not even saying this is all bad intent - it could just be lack of thought, or information, or knowledge, or just legacy, that makes us pick the wrong benchmarks, set the wrong targets and get the wrong feeling about our market success.
I like asking people for alternate benchmarks - give me one that makes you look good, one that makes you look ok / bad and one that makes you look pathetic. Then pick two - yes, two. One for the external world when you want to justify your performance and ask for your raise (make sure this one is logical and defensible though), and one that you use to push yourself and your team.
What are your thoughts?
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