How Management-Driven Companies Use Benchmarks to Beat Mediocrity

In my last post, I wrote about the dif­fer­ence between mar­ket-dri­ven and man­age­ment-dri­ven com­pa­nies. Mar­ket-dri­ven com­pa­nies ride the waves. Man­age­ment-dri­ven com­pa­nies set their own course.

One of the biggest dif­fer­ences? How they use benchmarks.

Two Ways to Use Bench­mark Data

Almost every com­pa­ny has access to bench­mark­ing these days — pub­lic fil­ings, indus­try reports, even AI-dri­ven tools. The ques­tion isn’t whether you have the data. The ques­tion is: what do you do with it?

We see two com­mon approaches:

1. Bench for Aver­age – Some lead­ers breathe a sigh of relief when they see they’re ​“in the healthy range.” If they’re near the mid­dle of the pack, they feel com­fort­able. For them, aver­age is the aspiration.
2. Bench for Best – Oth­ers zero in on the top per­form­ers. They ask: ​“Who’s set­ting the pace? What’s pos­si­ble? And how do we aim for that lev­el ourselves?”

Turn­ing Bench­marks Into Breakthroughs

One of our clients has been bench­mark­ing for more than a decade. Instead of set­tling for aver­age, they con­sis­tent­ly com­pared them­selves to the best-in-class — on rev­enue growth, mar­gins, EBIT­DA con­ver­sion, over­head ratios, and more.

At one point, their gross mar­gin sat in the low 20s. A com­peti­tor was achiev­ing over 40%. Instead of ratio­nal­iz­ing why they couldn’t match it, they asked: ​“If they can do it, why can’t we?”

That mind­set shift sparked inno­va­tion. They reimag­ined their busi­ness mod­el, launched new prod­ucts, and brought in exper­tise to make it real. With­in a few years, they too hit 40%+ mar­gins in some new lines of busi­nees — trans­form­ing profitability.

More recent­ly, a small bench­mark insight from a finan­cial part­ner inspired them to push a key met­ric up by four points. Every one of those points dropped straight to the bot­tom line.

Bench­mark­ing as a Mindset

The les­son is sim­ple: bench­marks can either jus­ti­fy medi­oc­rity or inspire greatness.

• Mar­ket-dri­ven com­pa­nies use bench­marks to con­firm they’re ​“okay.”
• Man­age­ment-dri­ven com­pa­nies use them as fuel — to stretch, inno­vate, and chase excellence.

It reminds me of a T‑shirt I saw: ​“Defeat the fear of being mediocre.”

Chal­lenge 

If you look at how your lead­er­ship team uses bench­mark data today, would you say you’re:

• Using it to val­i­date com­fort with the mid­dle or using it to set chal­lenges that push you toward greatness?

Because in a com­pet­i­tive world, ​“aver­age” is rarely safe. The best lead­ers set the bar high — and then inspire their teams to clear it.

Resources

• Does Your Strate­gic Plan Real­ly Dri­ve Growth – or Just Improvement?
• Think You Know It All? True Pro­fes­sion­als Learn Like Amateurs
• How Do You Know You Have the Right Core Val­ues?