Benchmarking is all the rage these days. I cannot remember when we first started talking about this idea and I struggle to understand its popularity.
I am sure the idea is that you aim to keep up with, or even beat, your competitors. Study the management styles, emulate the philosophy, target the ratios, copy the strategy and hey presto: business success.
If benchmarking is supposed to be challenging and motivational then maybe the equivalent of keeping up with the fastest-growing, most well-known, most-profitable businesses is having a pacemaker in athletics. It worked most notably and obviously for Mo Farah.
But let us dig deeper into the analogy. Mr Farah’s pacemaker had trained with him for years, they knew each other well and they had trained as the athletic equivalent of Siamese twins. The pacemaker’s purpose in life was to lead the race, to bring out the best in the ultimate winner. Galen Rupp had trained to bring out the best in Mr Farah, and his prize was silver, not gold.
But for pacemaking to work there has to be a realistic chance of keeping pace. I am running the Race for Life on 21 July and would benefit from a pacemaker to help me actually run all 5000 metres. For me that would represent a real triumph.
Olympic 5000m runners could complete four races in the time it will take me to complete just one distance so Mr Rupp is unlikely to be my ideal pacemaker.
In the same way businesses looking for a pacemaker, or benchmark, against which they will compete, need to find a training partner who will motivate them incrementally to achieve ever-greater results, instead of merely demonstrating the impossibility of even trying to keep up.
We may learn lessons from other businesses, in financial services or elsewhere, but for benchmarking to be successful you cannot expect two wildly different businesses with different strategies, different propositions, even in different parts of the country, to set themselves against one another and expect the comparisons to be useful and constructive.
If companies are too different, any comparisons will be so divergent that they serve to depress and demotivate, instead of bringing out the best. Interestingly, too, pacemaking seems to me to be interactive: two people working together to create the best result with one getting gold and the other ultimately sacrificing their own chances of winning.
Businesses on the other hand will not have that interactive relationship, nor is there a need to decide between who gets gold and who does not. Corporate leaders follow their own path regardless of who is watching or following or benchmarking their performance.
Businesses, regardless of how small, apparently need to include the functions of management, sales and marketing, operations, human resources, risk management and IT – no surprise there. But it has also been stated that the smallest firm would have three people in management, eight in advice or paraplanning, and two in administration.
A fine ideal, but like me targeting 5000m in under 15 minutes, utterly unrealistic.
Gill Cardy is managing director of IFA Centre
