As firms face growing competition for customers, they naturally seek to compare themselves with their peers and competitors, but there is a trap: Leaders don’t compare themselves.
In the past, it was common to benchmark organizational performance against “industry averages,” and being “above average” was considered good. Today, “above average” is no longer good enough; fickle customers demand exceptional experiences. Delivering those experiences requires exceptional performance; anything less means that another company may steal your customers.
When we talk with leading modern application delivery organizations, we find that new benchmarking trends are emerging, making traditional benchmarking less attractive. Why?
- Benchmarking is for followers, not leaders. Organizations want to be “unicorns,” like the Etsys, Netflixes, Googles, and Salesforces of the world. They don’t want to be losing “horses.”
- Most benchmarking approaches target the IT of the past, not BT. Benchmark methodologies and data were created and heavily used when software delivery capability was considered a cost, not a differentiator. In business technology, software is a key differentiator, and BT leaders want to be the best and continuously improve.
- Agile, continuous delivery is less about standards and more about creativity and adaptation. Agile and CD have no set standards; 65% of expert firms using Agile mix and match various practices from various frameworks like Scrum, Kanban, SAFe, and XP. One size does not fit all in terms of metrics; with no standard process, organizationstructure, or technology, it’s even harder to compare data between companies.
So what do leading organizations do instead of benchmarking themselves against external organizations? They:
- Compare where their company is to where their customers need them to be. Customer needs and satisfaction drive the comparison.
- Analyze and use data in new ways. New metrics for AD&D, such as post-production metrics, are used in conjunction with more traditional preproduction metrics to drive the analysis. Talent metrics are used to decide how to assemble teams in the most efficient way.
- Prioritize and improve performance. By analyzing value streams, teams uncover their most pressing improvement needs — not whether they are better or worse than external competitors. This drives much better alignment.
with competitors anymore. Instead, they compare their current performance with where they need to be as a leader, and that’s what the business expects.