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Why External Benchmarking Fails HR Teams · The Science of Leading

• 0:00
  Welcome to the show everybody!
• 0:01
  I'm Claire Monroe, here with Edwin Carrington.
• 0:04
  And Edwin, I want to start with a concept that almost every HR department treats
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  like holy scripture: external benchmarking.
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  We constantly ask, "How do our people metrics compare to the rest of the industry?"
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  But I recently read a scathing critique by Craig Starbuck that basically says this
• 0:22
  is a giant trap.
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  He argues external benchmarking just breeds mediocrity and groupthink.
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  Craig Starbuck is spot on, Claire.
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  When you benchmark externally, you're essentially looking at your competitors,
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  averaging out their behaviors, and saying, "Let's be exactly like that."
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  But why would you want to copy the average?
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  You're ignoring the unique DNA of your own high-performing teams to chase an
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  industry baseline that might be totally dysfunctional.
• 0:49
  Right, like aiming for a C-plus just because everyone else is getting a C-plus.
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  And the financial cost of getting this wrong is staggering.
• 0:56
  I was looking at McKinsey's 2023 State of Organizations report,
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  and they found that companies in the top quartile for organizational health see
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  three times higher total shareholder returns than those in the bottom.
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  Three times!
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  Yet, they also found that seventy-two percent of organizational transformations
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  fail.
• 1:14
  Seventy-two percent, Edwin.
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  That is a massive failure rate.
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  Seventy-two percent is a tragedy of alignment.
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  It means nearly three-quarters of these massive, expensive initiatives are falling
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  apart because leaders are trying to force-fit a generic, external playbook onto
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  their unique internal structures.
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  If you don't understand the behavioral makeup of the teams actually executing the
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  work, you are flying blind.
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  So instead of looking outward, we need to turn the camera inward.
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  But how do we do internal benchmarking without making classic mistakes?
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  Like, you can't just compare a software engineer's behavioral profile to a
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  salesperson's and expect them to look the same.
• 1:52
  Exactly.
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  Comparing non-comparable roles is a fast track to disaster.
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  You need to standardize your definitions first.
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  Internal benchmarking isn't about hitting some arbitrary, universal number.
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  It's about diagnosing the "how" and the "why."
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  Why is Team A in your sales department outperforming Team B by forty percent,
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  even though they have the same resources?
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  That's the question you want to answer.
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  That shift from "what is the number" to "why is this happening" is huge.
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  But actually putting this into practice feels like it could get incredibly complex,
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  fast.
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  How do you roll out behavioral analytics without getting bogged down in endless
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  data?
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  You keep it simple.
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  Gartner actually has some brilliant advice on strategic workforce planning here.
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  They suggest scoping narrow to reduce complexity.
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  Instead of building these massive, multi-million dollar vanity dashboards that try
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  to measure everything and end up measuring nothing, you build flexible,
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  adaptive plans.
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  Start with one critical business unit.
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  One unit.
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  I love that.
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  So instead of a massive corporate rollout, you run a pilot.
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  What does that actually look like on a timeline?
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  Let's say a thirty-to-ninety-day blueprint.
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  In the first thirty days, you establish your baseline.
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  You use behavioral data to map the natural wiring of your current people in that
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  specific unit.
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  What are their communication styles?
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  How do they handle pressure?
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  You aren't judging them; you're just capturing the reality.
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  And crucially, Claire, you are not creating a rigid "ideal personality" template.
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  That's another trap.
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  You don't want a team of identical clones.
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  Yeah, a team of ten identical, highly assertive drivers sounds like an absolute
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  nightmare.
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  You'd have constant turf wars.
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  So the baseline is about cognitive and behavioral diversity,
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  but mapped to actual performance outcomes.
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  Precisely.
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  It's about finding the behavioral patterns that correlate with success in different
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  roles.
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  Then, by day sixty, you start identifying the gaps -- where is the friction
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  happening?
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  And by day ninety, you're executing targeted, flexible adjustments.
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  You're coaching managers based on their team's actual behavioral friction points,
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  not some generic management textbook.
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  Ninety days to go from guessing to actually knowing the behavioral dynamics driving
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  your top teams.
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  That is incredibly actionable.
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  And honestly, if you're listening and want to stop relying on flawed external
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  benchmarks, you should check out OAD's platform.
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  They specialize in this exact kind of behavioral analytics.
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  You can get a free demo of their platform right now by going to O-A-D dot A-I.
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  That's O-A-D dot A-I.
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  It's well worth the look, Claire.
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  When you understand the behavioral data of your own people,
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  you stop chasing the competition and start mastering your own organization.
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  Perfect place to leave it.
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  Thanks for the wisdom, Edwin.
• 4:44
  Always a pleasure, Claire.