Benchmarks: A Sign You’ve Been Sitting Too Long

Benchmarks might seem useful, but they often promote complacency rather than genuine progress. Constant comparisons can mislead companies into inaction, making them reliant on outdated data that lacks context. Ultimately, true success should focus on unique strengths and market performance, rather than merely measuring up against competitors.

We’ve used them or quoted them, but should you really be a fan of benchmarks? Personally, I would rather pass than play, at least most of the time. I guess if you are using them to compare something you’ve never done, or lack confidence in doing, then maybe it helps taking a peek at what your neighbor is doing? Maybe?

Wait. So how is this different from a 5th grader struggling on their math test? I’m thinking that if kids need to “check” their answer against what their classmate’s answer, then maybe they didn’t pay attention, study hard enough, or seek the help they needed in time. 

Some say that benchmarks are a way to see what’s changing in an industry, thereby gaining insights into how to stay on top of the game. But if you are having to check-in every year, then maybe you aren’t winning. I mean, I’m no sports professional, but I’m thinking winning teams aren’t practicing to beat their opponent by one point, they’re looking to score the most points possible. They put in the time, blood, sweat and tears during practice and they see the fruits of that preparation reflected in the score, win, lose or draw.

How does this translate into business? Well, I think it’s very similar. You could argue that reacting to benchmarks is one way to decide to take action, but another way could be hiring and keeping top talent, taking calculated risks when innovating, and leveraging the right partnerships. Market-leading companies aren’t looking at second or third place to measure how they are doing, they are looking ahead.

I get this opinion may be a fairly unpopular but allow me to explain 10 reasons why I’m generally not a fan of emphasizing benchmarks in corporate settings.

1. Not Broadly Applicable. I’ll admit that there may be some use cases for benchmarks, for example, comparing base salaries for similar job roles. However, when benchmarking employee satisfaction, inclusion, safety, onboarding, etc., we’re not talking about apples and oranges, it’s more like apples and iPods. All of those things and more, vary greatly by company industry, culture, location and business processes. At that point, it’s better to create an internal baseline, and then seek improvement from there. Which brings me to the next point.
   
2. Scores need goals (and investments). Scoring a 72% favorability rating may be on par with a benchmark, but what does that mean? Without setting goals first, the comparison doesn’t mean much. By measuring something, you are implying it’s important.
   
   Company action translates to direct or indirect costs, so how much does it cost to move a percentage point? Now we need ROI calculators and pseudo-math equations to try to quantify/monetize intangibles. Even that analysis itself takes time and money, money that may be better invested in other parts of a business. Suddenly, being off a point or two (or three or 10) doesn’t sound that bad. It’s not surprisingly then, that so little action comes out of surveys.
   
3. The “curve” is a poor way to measure excellence. Doing just a bit better than average shouldn’t be a barometer for success or that “everything is alright”. Even with average results, there may be more happening below the surface; therefore, companies should rely on other feedback methods to capture areas for improvement. Just doing it slightly better than average won’t make your company market-leading.
   
4. Apathy is a warm blanket. Well, in a best case, you’re a top scoring company and that will make your executives feel great (queue all the self-patting on shoulders). But, if you’re not growing, you’re stagnating and that eventually leads to mediocrity. Sometimes we get so excited about good results that all the hard work, and the work that is needed to keep us there, gets washed over. So, while it may feel good to beat the competition, beware of being lulled into complacency.
   
5. Employee results may (should) vary. For comparisons to be useful, there would have to be an overwhelming number of similarities with the companies you are measuring yourself against. And if you do have an overwhelming number of similarities with your peers, then it’s possible you have gloriously failed at having a distinguishable Mission, Vision or Employee Value Proposition. For employee surveys, satisfaction or favorability ratings are intimately tied to corporate culture and no two cultures are the same since the people and leaders influencing them can be wildly different. Tesla and Toyota both make cars, but that’s probably as similar as they get from a cultural perspective. Unfortunately, many of us have been convinced that using employee satisfaction benchmarks are valid when comparing them against unique employee-bases.
   
6. They have no expiration date or context. People who tout the use of benchmarks also hit on the value of historical data. What they mostly don’t do, is have an asterisk or disclaimer for every year. Take the clearest example: pre- and post-pandemic data. Temporal bumps in market conditions, geo-politics, economic policies (see “tariffs” for example) or regulations, influence how people respond to surveys. Unfortunately, without the proper context, much of the data loses value when compared year over year.
   
   Also, are we really saying that business practices have remained unchanged in the last 25 years? Do we really expect them to be the same in the next 25 in an AI world, “gig” economies or the new “future of work”? Just looking back to the year 2000, I can already come up with a laundry list of things that have changed in terms of work expectations, technology, social behaviors, business models, etc.
   
7. Not innovation friendly. Benchmarks, by definition, are comparative scores, therefore, they’re most useful when it’s the same survey questions asked over time, across all companies. What if you aim to be a disruptive company or have disruptive processes (do things differently)? How do you imagine this worked or Uber or Netflix when they first came about? Sadly, the “let’s do it like everyone else is doing it” risk-averse mentality is already common in a lot of companies. By focusing too much on benchmarking, we’re just reinforcing that mindset.
   
8. Actions are an unknown long game. Even if you chose to act upon an area to improve, when do you expect to see results? Changes could easily take years to be reflected in results and even so, how confident are you that it’s due to the changes you’ve made versus some other external or underlying factor? Rather than relying on external results that may be impacting all companies, it may be better to internally define leading and lagging indicators to see if you are heading in the direction that is right for you.
   
9. Market performance is the only measure that matters. I hope it’s not too cynical of me to say this, but ultimately, companies are evaluated on how well they are financially performing for their stakeholders. Since every company is unique, the only way to account for the variable effects of corporate culture, business processes, management styles, etc. are the results being produced. This means that ultimately, market performance is the only measure needed for comparison.
   
10. It’s probably business, not personal. Ever wonder why survey vendors strongly discourage you from changing their questions? Well, if you change it, you can’t use their benchmarks since the adjusted questions won’t match one for one to their research-based, PhD created, divinely approved, curated question set. I would say that’s very thoughtful of them to care so much, if it wasn’t for the fact that they can’t use your data either.
    
    Interestingly, I’ve recently seen more companies offer paid access to their data for benchmarking and analysis – data, mind you, that they likely collected freely through your paid participation in their survey platform. It’s like a “not-for-profit” organization that takes your free donations and then sells them back, for, well, “not profit”. Sadly, all this makes most surveying providers reluctant to change, edit or introduce new questions.

So, there you have it. In addition to all the typical disclaimers, I’m not saying that benchmarks are wholly without purpose or value. I’m just saying that instead of sitting around waiting to see how everyone else is doing it, maybe think about getting off the bench and taking the field. If you are a benchmark evangelist, hope this at least provided a differing view, and if not, well, remember that this article received an 83% favorability rating by content writers, per a made-up benchmark somewhere.