Written by Andrew Gadomski, CEO and Founder of Aspen Advisors
Benchmarking has been around as a business process a LONG time. You knowing how much somebody else spent, or how long something took is informative. When you “beat that number” you feel good. Your boss feels good. The CEO feels good. #winning
Meanwhile, how you beat those numbers is either 1) you understand a process so well and have it so tuned that you can nail the outcome every time OR 2) you are hedging so you can hit a lower number OR 3) you got lucky. Let’s admit that.
For those who don’t know, Three Card Monte is a confidence game where the player has to pick usually a Queen from three cards shuffled in front of them. Its a game designed to cheat the player out of a bet, without making them feel bad – as the dealer is typically using slight of hand in order to deal the cards. Typically, the dealer always shows you the Queen, before shifting the cards around. So you know its there.
That Queen…that is your “benchmark” number.
OK – I am slamming “benchmarking” a bit. Don’t get sensitive and start talking about how you use it, it’s valuable, and you do it each year, etc. You determine value, and I’m not going to argue your assessment. We justify resources all the time that are valuable one day, and useless the next. If I had a nickel for every time somebody thought a tool, process, or system was a silver bullet…lots of nickels.
What I have learned (and wow did it take a while) is that getting and cleaning the numbers is actually straightforward. If you are hearing that is hard to get to data or normalize it or make it standard – question it. The real players in the space are already there, and can normalize data quickly and cleanly. They present the numbers quickly and cleanly – and they are also the first to admit that the actual number is not the most important thing. Knowing how to get to the number consistently is the most important thing.
That’s where comparative analysis comes in. You have to understand the resources, spend, processes, team and training of one or more organizations, and how those combine to get to what was hopefully a predictable and prescribed outcome. Now if you want to win at Three Card Monte, that might be watching the dealer really closely and betting heavy at the right time. However, if you want to win a game…maybe go to the other side of the park and play chess.
Comparative analysis is hard work, and its takes time. Now in many cases, your analysis will stop short. You learn that the process at an organization is not wildly replicable or scaleable, or that not enough data is present to actually justify investment or change – aka they are hedging or got lucky.
However, there are companies that NAIL it each time. They do the work. They track their activities, their spend, and they experiment. These are the ones to hunt down. You want to sit with these businesses – at a conference, a private meeting, or just a dinner and really get into HOW they did something. They are on the other side of the park, playing chess. They are talking strategy, how to make moves, and enjoy themselves while doing it – and in many cases, it’s basically free. I am seeing more of this type of sharing, and its great. It’s key. There is a conference every single week regarding Recruiting and Talent Acquisition, and lots of people willing to share. Get involved.
I remember my uncle, a wildly successful business owner, telling me how many years ago he worked with several other CEOs to normalize and compare data regarding engineering, construction, and financial data regularly. This is pre-internet. When I asked him what he learned, he said that he learned from other CEOs about how to lead and make change. He said the numbers helped ground him a bit, but his goals were his. He admitted it was never really about the numbers, it’s was about figuring out processes on how to change the numbers. Sound advice.
Back to Three Card Monte. Its a fun game, and its been a while since you can see it played in Times Square in NYC – but I do see it from time to time in my travels. If you want to win at a game, maybe you want to play one that is based on thinking ahead, using strategies, and reacting a bit on the fly in a smart way, and using processes that you know work.
It’s Spring in NYC. Washington Square or Union Square are some of the best places to setup a chess board. See you there 😉