Many Business Owners compare their company each year’s performance with their last year’s performance, such as increased sales, higher productivity, larger profit, and so on. There are several problems with the using the past as critical benchmark. Firstly, it is an inward looking measure, rather than comparing with your competitors outside. Beating your own performance is not same as beating your competitors. To provide a true measure of performance and right focus of attention, it needs to be externally based measures. Secondly, it is a lousy way to motivate employees. Business Owners should understand that employees do not come to work to enrich Owner’s profit. They come to work to express their talent, to earn a living, to socialize with colleagues, to participate in exciting projects and perhaps to make a difference to the world.
Takeaway: Beating your own last year result is not very heroic. Best benchmark is your competition. (www.missionmeans.com)