Performance Benchmarking
Comparing internal business processes and performance metrics to industry bests to identify gaps and improve efficiency.
What Is It
Performance benchmarking is the practice of comparing business performance against internal goals, historical results, or external peers. It answers a simple question: How well are we actually doing? Benchmarks can include financial metrics, operational efficiency, customer satisfaction, or employee productivity.
Why It’s Important
Without benchmarks, businesses operate on assumptions and anecdotes. Leaders may feel things are “going well” while competitors quietly outperform them. Benchmarking creates context as it shows whether results are good, average, or falling behind. It’s also critical for setting realistic goals and identifying improvement opportunities.
Best Practices
Choose relevant benchmarks, not vanity metrics
Compare apples to apples aka size, industry, and stage matter
Track trends over time since one data point is misleading
Combine internal and external benchmarks
Use benchmarks to inform action, not assign blame
Key Insights
You can’t improve what you don’t measure
Context matters more than raw numbers
Benchmarking is about learning, not ego