A compass is arguably the most important tool an explorer can have. Its dependable magnetic alignment reveals the right path even if astronomical indicators like the North Star are obscured by weather. Just as it guides the plight of the adventurer, a dependable directional cue is also invaluable in business. These “True North metrics” can help an organization determine where they are and how to get where they’d like to be. The value of True North metrics lies in their objective nature. They are ascertained using research and data that provide an unclouded view of an organization’s standing.
Helpful metrics such as these can be determined through benchmarking. Strategic advisor Bernard Marr defines the practice as follows:
“Benchmarks are reference points that you use to compare your performance against the performance of others. These benchmarks can be comparing processes, products or operations, and the comparisons can be against other parts of the business, external companies (such as competitors) or industry best practices. Benchmarking is commonly used to compare customer satisfaction, costs and quality.”
Benchmarks are not to be confused with key performance indicators (KPIs), which track performance as it pertains to the achievement of goals and strategies. Marr goes on to describe three specific varieties of benchmarking which can be utilized to varying effects.
- Process benchmarking
This form of benchmarking helps improve your organization’s processes by examining how others approach and complete tasks. You may glean insights that can save time, resources or effort – or you may find that your methods are superior and focus your efforts elsewhere.
- Strategic benchmarking
This can give you a competitive edge by helping you evaluate your organization’s business model. How does a successful competitor’s marketing strategy compare to yours? Is their content more robust or do their social media pages have more engagement? This can help you reverse-engineer your approach.
- Performance benchmarking
This form of benchmarking pertains to performance in terms of results. You can benchmark your performance against that of others with metrics like customer satisfaction, revenue growth or market share. By identifying your shortcomings, you can decide where to shift your focus.
Benchmarking may sound abstract, but there are plenty of tools that can provide the data you need to measure your own performance. For example, MGMA DataDive is one of healthcare’s most robust datasets, with metrics from organizations of every size and variety nationwide. Let the data help you find your way.