Maximising the effectiveness of your executive processes and board performance will make your business more competitive. Standing still is the same as going backwards in the modern commercial world, so you need to ensure your organisation leads by example from the top-down.
One of the easiest ways to assess how your company is faring is to look out for what the best in your market are doing and how these structures compare to what your executive team is doing. This is benchmarking – and our guide will help you to understand why this process is so pivotal for analysing your business‘ successes and opportunities for improvement.
What is executive benchmarking?
Over time, best practices in any industry emerge based on executives and managers determining what actions and processes led to successful outcomes. Determining these standards is useful for those at the head of an organisation, so that they can compare their own board-level processes and personnel. This helps to identify executive successes and assess why they were successful.
Executive benchmarking is also a chance to determine what processes can be streamlined, and set performance goals for the board and metrics for examining the capabilities of senior management.
Executive benchmarking helps you assess what enterprise strategies have worked for the best in your industry.
Using executive benchmarking to assess successes and failures
Some are critical of using benchmarking, as it encourages the market to repeat processes rather than driving new innovations. However, detractors of this business principle aren’t looking at it in the right way. No two organisations are alike, so copying a process to the letter is impossible anyway. Executive benchmarking is about analysing what has worked and what hasn’t for others across a given sector, helping your business to apply these lessons practically to your own unique governance and senior management structures.
Learning from the successes of others is reasonably simple. Take this as an example; a competitor’s new sales strategy doubles their revenue within a year. Ask yourself:
- How was this idea developed?
- Who was in charge of implementing it?
- Which processes worked to stimulate sales?
- Why did customers take to this new strategy?
- What can you apply in your own business?
This works the same when you consider internal changes within a business, such as setting up a new governance function to analyse the work of your board. Reflect on how your competitor’s executives led the change and adopted new ways of working to make the transition smoother, and consider how these lessons can be applied in your company.
However, only looking at the successes of your managerial team is a missed opportunity. Bill Gates once said ”It is fine to celebrate success, but it’s more important to heed the lessons of failure.” Even if your board seems in great shape, how do you know it’s working to its best? Looking for areas of improvement is key to remaining at the forefront of your industry. It can be confronting for your executive team to focus on things that may not have worked in the past. However, it’s important to focus the analysis on the team’s performance as a whole, rather than individuals’ efforts.
Applying the lessons you’ve learnt from executive benchmarking research is simple.
Applying these lessons to improving your board-level processes
Executive benchmarking is used by the most successful businesses – but how do you apply these lessons practically to improve your own board processes and performance?
- Conduct research. This may seem obvious, but put a budget behind researching what the most advanced organisations in your sector are doing. Subscriptions to relevant industry journals and market reports can provide compelling insight into competitors, and give you an idea about what you can change.
- Meet and reflect regularly. Annual general meetings are no longer fit-for-purpose – the business world is changing at an accelerated pace, so lessons learned may not be applicable a year or even a few months down the track. Increase the frequency of board meetings, and build in an element of self-reflection and criteria assessment to ensure your executive team has the personnel and expertise required to meet all challenges.
- Build the right board. Having a balance of individuals on your board goes beyond just having specialised business skills and experience. A diverse range of opinions from individuals with various commercial and personal backgrounds ensures your executives are prepared for any issues that arise. Innovation, courage and humility are also character traits each of your board members should have. This ensures all ideas – and criticisms – shared and discussed are given equal weighting, and helps you build the right business culture from the top-down.
A final point that helps with executive benchmarking is seeking outside advice from business specialists. Sometimes it can be hard to see inefficiencies in your executive processes from within your enterprise, and it often takes outside expertise to determine what you are capable of.
DFK Crosbie’s business services
DFK Crosbie’s team of business specialists analyse your executive processes to determine if the structures in place best suit your organisation. We can compile this information in detailed reports on board-level risks and opportunities. We can also easily develop an alternative executive framework that suits you, now and into the future, regardless of your industry. For more information, contact DFK Crosbie today to discuss your business’ needs.