Three Benchmarking Techniques That Lead To Greater Results…

Excerpted from the INSIDE Public Accounting newsletter, 2009

We all love numbers. We can measure, quantify, analyze, rank, correlate, compare and chart numbers better than any other group or profession. We look at numbers, deal in ratios and can help clients figure out where they stand. Looking inward, we look forward to benchmarking our firms to see how we stack up against our peers. But how can benchmarking historical data lead to improved results for the future?

There are three basic ways to benchmark your firm. All three are tools to help identify your situation, and all three can lead your firm to behavioral changes that will improve future performance.

Comparing Your Numbers to Peers – Knowing how we stack up economically and operationally against our peers has forever been one of the truisms of American business. Ranking ourselves against others permeates our culture. It starts early in our educational system and continues through our first job, then carries on for decades throughout our careers. It’s a mainstay of corporate culture.

Comparing Your Numbers to the IPA Best of the Best – If you want to emulate success, why not see how you stack up against the best in the country? How far does your firm need to stretch to achieve the success enjoyed by the most elite firms in the industry? What can you learn from what they do? Comparing your firm to the Best of the Best offers you the ability to understand the key metrics that make successful firms shine and allows you to build your firm around those key operational areas.

Comparing Your Numbers Against Your Own Progress – True growth from year to year can best be measured against yourself. Remember when you were in third grade and your parents made a pencil mark in the doorway to mark your height? It didn’t matter what the average height of other third-graders was, or that you weren’t as tall as the biggest kid in class, the satisfaction came from seeing that bar being raised – literally – each and every time you stood up and got measured.