Is Your Company Better Than the Competition? Here's How to Find Out. To become a market leader, your business needs to set bold goalposts far better than the industry average.
By Melissa Powell Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Turn a profit; grow; become a great place to work -- all are important goals that entrepreneurs should strive to achieve. And though you might be surprised how many companies fail to meet them, to some extent these goals go without saying.
But when seeking to create a successful company you (and others) can be proud of, there's more than just the obvious goals to keep in mind. One that I've found fruitful to focus on is this: Be nowhere near the national average. Whether in regards to one thing or everything, executives and entrepreneurs have the opportunity to put processes in place to blow the national average out of the water.
As a COO in the healthcare industry, I've been on the ground floor for years building company operations from scratch. As such, I'm keenly aware of the challenges that come with creating something new by solving deep-seated problems. Setting my goalposts far above, or below, what I knew the national average to be has been one way to make impressive strides and become a market leader.
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What's the national average?
So, what do I mean by national average, and more importantly, which national average? It's a fair question, and you'll need to ask yourself more about your company's priorities to settle on what numbers you want to beat. At my company, we care about health, safety, and well-being of our patients, residents, and employees. But where does the national average fit in?
Well, this is where we turn to our competitors, and not just here in New York but around the country. What's the average bed vacancy in a comparable rehabilitation facility? The average rate of readmission? The average star rating, by either patients or staff?
Whatever industry you're part of, there are one or more national averages to best. If you're in consumer electronics you may want to beat the national average in phone sales; if you're a teacher, you may want your students to beat the national average SAT score. It's not easy, because the country is so populated with businesses like yours, or similar. But it's worthwhile for your bottom line and your value proposition to dig into the data and set goalposts around it.
Which brings us to…
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The power of big data
Research can help uncover the numbers you're looking for. It may seem trite to say, but Google is your friend, as are trade associations and publications that report on industry standards. If there are organizations that give out awards for this type of thing, they are measuring it somehow. Look into their methodology and find out who is performing the best, and why.
The real opportunity, though, comes with data science (in-house, if possible), without which you'll only be able to guess how you stack up. I recommend hiring a data analyst or similar to help identify trends and areas for improvement.
At my company, we're fortunate to have an RN who is also a data analyst. He drills down data so we can figure out why certain numbers are a certain way and which factors to avoid or replicate using what strategy. This gives us an enormous advantage because it allows us to quantify our successes and failures and improve upon them in real-time.
Big data is making a monumental difference in healthcare, but that's far from the only industry reaping the benefits, especially when it comes to measuring performance and driving efficiency. The key is knowing how to use it. Without a way to process and analyze data, it's virtually meaningless.
Related: Think Your Company Needs a Data Scientist? You're Probably Wrong.
How to set your goals
Once you've picked which national averages to beat and figured out how to measure and record your company's efforts, it's a good time to reevaluate and reset your company's goals. When I say "be nowhere near" the national average, I mean it: if you don't shoot for the stars, you can hardly expect to outperform others in your industry.
So, if the national average for turnover in your industry is 16.8 percent, it might be worthwhile to aim to cut it in half. Sure, 10 percent is a good figure to aim for, but why not make it 8 percent? Having this goal is just step #1; a goal is nothing without plans in place to meet it. To improve employee retention, for instance, you might improve benefits and other perks to improve associate loyalty. You'll also want to carefully track how happy your employees are and address their concerns as they come up to keep them on board for longer.
Beating the national average is as much about setting concrete targets as it is creating the arrows and arming and training your people to hit them. In theory, the higher you aim, the higher you'll land.
Related: Data Reveal the 7 Factors for Optimal Employee Retention
The benefits (and limits) of high standards
Why aim high? Setting and maintaining high standards for your business is key not just to success, but survival. In business, there's never a guarantee that your company will avoid bankruptcy or a dried out market, especially with external economic factors in play that you're unable to control.
It's important to note that high standards are not the same as impossible standards. Setting impossible goals will only bring stress to you and your team, which is bad for morale, not to mention health, and will all but guarantee failure.
Instead, set realistically high goals that with the understanding that coming up short is still a win. To do so, you'll have to have a good understanding of what is realistic and what is pie-in-the-sky. Don't underestimate your team but don't overestimate them too much, either. If you are fully aware of their capabilities and encourage them to defy expectations, you've found your sweet spot.
Once you find that sweet spot, it's a good idea to build in wiggle room (expect something to go wrong) and incentivise big returns instead of penalizing shortcomings. This way, your team is empowered to excel instead of pushed beyond their limits by the fear of failure.
With good leadership, an empowered team, and the power of big data on your side, there's no reason you can't beat the national average and set a new standard for greatness in your industry. It's easier said than done, of course, but the results will be well-worth the effort.
