Benchmark: “Something that serves as a standard by which others may be measured or judged,” according to Merriam-Webster.
As necessary as benchmarks are, in my opinion, the modern business world has become entirely too fascinated with them. Don’t get me wrong—all businesses need to monitor success, failures and progress. Benchmarks can absolutely help you do that. But where you’ll find yourself up to your eyeballs in data that doesn’t effectively inform your next steps is when you spend all your energy benchmarking your business against another that may or may not have needs remotely similar to yours.
Take my organization as an example. I have served as the CEO for Eye Centers of Tennessee for more than 20 years. During that time, we grew our business from a small, one-physician office to its current status as a leader across our area in the Upper Cumberland region of East/Middle Tennessee. We operate out of eight locations and employ 15 doctors and more than 125 support staff members. Just last year, we finished construction on a brand new, state-of-the-art facility. We are proud of this growth, but we’d never have gotten here if we were comparing ourselves—your hometown eye doctors, many of whom serve very rural areas—to facilities in markets like Chicago or Los Angeles. Instead, we compared ourselves against our own previous wins and losses, and amended our course as necessary over the years.
How to Make Benchmarking Work for You
Healthcare is particularly captivated with benchmarks. After all, it’s a data-driven field powered by lots of high-performing people. But as I mentioned above, some types of benchmarking—even in healthcare—won’t yield actionable data, no matter how long you spend trying to extract it.
We used to spend hours upon hours filling out surveys to be included in benchmarking studies. There are so many of these opportunities out there that we could employ a full-time person whose only job would be to work on these projects. And if we felt like that was valuable to our practice, we absolutely would. But it’s not. At the end of the day, all we got from these surveys were blanket comparisons. If we came out “above average” in certain areas, great. If we came out behind—say we were seeing fewer patients per hour than the study said was “average”—okay. What did any of this really matter if we were operating efficiently, at a profit, in a way that our patients, physicians and support staff found appropriate and comfortable?
Instead of feeling compelled to constantly compare yourself to your competitors, I’d encourage you to compare yourself to yourself. Focus on things like:
• Your mission. Any well-functioning business should have a final decision-maker whose job it is to understand and deliver on your organization’s mission. Are you achieving what you set out to accomplish? If you are, is it time for your mission to change or evolve? If you can’t answer these questions definitively, you can be sure your employees are not operating at max capacity. Review your mission regularly, and compare it to the reality of the work you are doing at the organizational level.
• Profit. As a CEO, it’s your job to return a profit on the products or services you provide. Keep track of seasonal fluctuations, year-over-year change, and plan for challenging times. We’ve all been through a global pandemic at this point—we have no excuse for not having a crisis plan.
• Efficiency. Your efficiency measurements will vary from business to business. Service providers may measure efficiency in hours to complete a project. A fast food restaurant may measure how long it takes from the time a customer places an order in the drive-thru until their food is handed to them in their car. In my ophthalmic business, we monitor how many patients each of our offices can see each day, how many phone calls we field, and other business operations details. Identify what efficiencies matter to your organization, document them, and monitor change over time.
• Mistakes/failures. Benchmarking does not mean overlooking mistakes. Just as I’ve noticed an inclination toward benchmarking for benchmarking’s sake, I’ve noticed an inclination toward skewing data to look “good.” As far as I am concerned, mistakes are where the magic happens—and they’re just as worthy of documentation and tracking as numbers trending toward the positive.
Win or Lose, You’re Responsible
I am a former Marine Corps Officer, and the lessons I learned during my time in the service are still the guiding principles I use in business to this day. In the Marine Corps, you have a commanding officer. It’s that person’s job to make the final call about what you do, and it’s the most critical role in the most critical situations. That’s your job as the CEO.
As you’re benchmarking your business, you may find yourself pointing fingers or casting blame. If you see an area of your business that’s not performing as efficiently as it should or that your profit margins aren’t growing at the pace you’d projected, you may be looking for someone to blame—but as the CEO, that responsibility is ultimately your own.
Instead of using benchmarks to determine whether you’re better than average or not, use benchmarks to find areas of opportunity for your organization. At the end of the day, the success or failure of your business is within your control. When you’re benchmarking appropriately, that statement will feel empowering. If it feels daunting, it’s time to rethink what you’re monitoring.