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The Problem With Traditional Business Benchmarks

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 of 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 by 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, and
year-over-year changes, 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.

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