Benchmark Philosophy

Author: Chandramouli C S, Director – Globalization Advisory

We recently launched our benchmarking services in the areas of R&D, FA, HR, M&S functions.  The focus of the benchmarks is to help companies understand what is the optimal level of investments, globalization leverage, SLA’s to be measured, best practices etc.  In the last few weeks we have found good traction for this study and we are all excited about this.

We conceptualized the service offering post Confluence 2010 and I happened to meet Vijay Swaminathan, Co-founder Zinnov in Sanfrancisco to discuss the finer aspects of service offering.  Though our discussions started with the business model, operations plan etc. we quickly moved on to talk about the need for benchmarking services in real life scenario.  The following blog is an excerpt of our discussion.  At a philosophical level the idea was to identify the underlying need for benchmarks/baselines among humans and also to build a conviction in our mind about the huge untapped opportunity this underlying need presents in business.

Flight Experience:

This is a flight experience which i witnessed few days ago.  I don’t think this is any different from what you have experienced during long travels.  Half way through the flight take-off, there was lot of turbulence in mid air and all the passengers started panicking on the flight.  Some of the less frequent travelers started relating this scenario to the worst that’s happened in the past.  Few of them started talking about instances where they lost their dear ones in flight accidents.  This triggered the thought process of many others about the worst that is looming on them.  Few of the elder passengers start praying and helplessly search for courage within themselves.  While few others start thinking about how the world for them is coming to an end.  Amidst these moments of uncertainty and panic there is one voice in the cabin which made a difference.  And the best of all the comfort word is from a benchmark.  He mentioned that “There are more deaths due to road accidents in US than in the air.  We will be alright”

Suddenly there was a positive energy in the cabin.  This one line was enough to console us that we are safe.  We compared the worst that happens on road and felt we are better off.  The statistics behind this benchmark helped but the guidance which we got was timely.  It helped us understand how vulnerable we are on roads and this is relatively safer.  I would emphasize on the word relative later on.

Just few minutes later there was an announcement in the cabin by the pilot.  He said “This is not the worst of the turbulences we have faced in our experience.  We will sail through it safely, we would request you all to sit back and relax (Or something in these lines)”.  This again provided the comfort we were seeking for.  Just the fact that this is not the worst helped us build the confidence and courage.

Again the power of baselines and benchmarks was proven.

Moral: Human’s by nature are fragile and cruel, we tend to seek the baselines of the past to predict the future.  When the baselines are worse than the situation, we find comfort in it.  Contrary we identify our status is worse compared to the stimulus we panic further.  In either ways we need baselines and benchmarks.  We like it or hate it this is reality of life.

Doctors doctrine:

This is an example of very caring parents.  You can relate to this if you are parent.  The parents I am talking about are blessed with a healthy child and based on what I know this kid is definitely privileged with good health, moral values and IQ.  In one of those routine check-ups the parents take the child to a doctor.  Doctor examines the kid on the regular parameters and then declares the kid is healthy and doing fine.

However, As usual the parents are worried if the kid is under-weight, is he eating growing normally.  The point is parents are expecting to hear some words of wisdom which can soothe their anxiety (In other words they are seeking for benchmarks).  This is where the doctor/physicians expertise comes into picture.  The doctor I am talking about is a smart cookie.  He says “Your son is doing great, your son is among the top 75%ile of the kids I have examined in the last few years”.  The point is that the doctor is statistically right.  He may have all the data and experience to prove this.  But the comfort which he is able to generate to the parents is unbelievable.  That one statement gave the parents months of sleepful nights.

Moral: Humans want to know their position in relation to the world.  And the frequency of it is regular.  It is not a onetime phenomenon/data with which you can quench your thirst for relativity.

There are many more business analogies we can derive.  The point is that we need baselines/benchmarks to know how well/bad we are doing and we need this dose frequently.

After this conversation I was thrilled about the opportunity.  An opportunity which is based on the fundamental premise of existence.  Numbers don’t matter, all I know is that there is money to be made.

P.S: Nassim Nicholas Taleb may disagree with this philosophy, If he does thus proves the Black swan theory

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