Friday, May 1, 2009

Breakthrough Performance

I’m going to start this article by noting that I’ve never been a huge fan of the practice of benchmarking, particularly within one’s own industry. As a personal belief, I think that this practice establishes false performance standards that ultimately limit the performance of an organization, rather than to promote its on-going development. While some companies may initially benefit from this exercise, benchmarking places emphasis and value on another’s accomplishments rather than on promoting an internal culture where truly breakthrough performance is a regular occurrence.

In order to realize breakthrough performance, we need to re-calibrate the way we rate our performance and move away from a relative scale (ourselves vs. our competition) to an absolute scale (perfection). Average businesses are those that meet customer expectations, while better-than-average businesses make every effort possible to exceed these expectations. In contrast, businesses that are truly noteworthy have learned to shatter these expectations by performing at a level that the customer had yet to even consider. This level of performance doesn’t come from benchmarking; it doesn’t even acknowledge that the competition exists.

The competition is irrelevant. If you’re referencing your performance against that of a competitor, you may be performing better or worse or even equal to, however this also means that you’re still comparable. Assuming that you and the rest of your competition are doing things the same way, using the same performance standard, you’re not a true industry leader - you’re still just a follower, albeit you may be on the upper-to-high side of mediocrity. To coin a phrase, think “a league of their own” – not only should you be better than the competition, you shouldn’t even playing in the same ball-park. There’s a reason Hyundai’s and Ferrari’s don’t race together.

Perfection should be the goal. Industry best-practices should only serve to identify the minimum level of performance that should be tolerated; these practices shouldn’t ever be considered as a basis for goal-setting. To survive in a competitive business environment, we shouldn’t be focusing on best practices, but rather, we should be constantly looking to develop even better practices. To have the “least” amount of rework, repair or returns, or to have the “most” on-time deliveries is the point from where your continuous improvement journey truly begins, rather than being the end. The real goal is an absolute one - to never have any bad product, never have any returns and to always deliver on time. While I acknowledge that such a level of performance is nearly impossible to attain and its achievement is subject to an endless list of constraints, perfection should always be the target that we’re aiming for.

The past is history. I can't discount the importance of "lessons learned" or the value of celebrating past accomplishments, however I will say that the only time that really matters is now and tomorrow. Success doesn't consider where we started, where we’ve been or how far along we’ve come; there isn’t any award given to the organization that’s the "most improved". The most important measure of performance is not the one that's behind us, or in the case of our competition, around us - it's always the one that's in front of us. Going forward, the goal is more than merely replicating the incremental gains of the past - its about finding new ways to exponentially improve our performance.

Breakthrough performance has nothing to do with your competition. It is about where you are now, and where you are going; it is about your future state and how far (or how close) you are to a state of perfection. Just because you are as good as your competition doesn't mean that your competition is any good.

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