Look Beyond Your Industry When Benchmarking for Success Make sure your business thrives by jumping outside of your industry.
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Building, supporting and scaling a sustainable business with sound policies is no easy feat, regardless of industry. Some fields may be more competitive than others, and businesses that break the mold have something in common -- they look outside their industry for inspiration on best practices. I believe this kind of external benchmarking is key for any company that hopes to not only survive, but flourish, in today's market.
At our company, Pacesetter, this has been something I've been militant about since starting as CEO years ago. The steel industry, like many subsets of manufacturing, has done things a certain way for a long time. It's useful to study the competition to see what works and doesn't work. I've also had success looking outside of steel to identify, not just the best industry practices, rather the best practices, period.
Here's how business leaders can think outside the box in order to really push the envelope, innovate, and get ahead of the competition.
1. Putting the "best" in best practice.
What's best in your industry is not necessarily the model for the absolute best. This is especially true because there are plenty overlaps between industries, jobs, culture and policy that we tend to ignore when siloed in our own fields. What doesn't work for one may very well work for another and yield surprising results.
It all depends on what it is you are trying to create, improve or solve. Are you a shoe store that wants to achieve excellence in customer service? If so, you would be limiting yourself just to turn to Payless and DSW. Find out which companies, regardless of industry, really are the best of the best in customer service, and see how you can emulate or adopt their practices.
As Craig Richardville of Carolinas Healthcare System wrote, "We tend to look outside of health care to other industries ...In the digital world, health care has more in common with other industries than we used to, so I spend a lot of time talking with non-health care CIOs." These have included diverse businesses from energy companies to pillow manufacturers.
2. Drawing on different knowledge pools.
It's no wonder Richardville looks outside of health care for solutions. Sometimes, the best ideas come when you introduce an entirely new pool of knowledge into the equation. For instance, an experiment by Harvard Business Review recruited roofers, carpenters and inline skaters to "contribute their insights to the problem of workers' reluctance to use safety gear because of discomfort." The study found that "each group was significantly better at thinking of novel solutions for the other fields than for its own."
Outside minds, then, can help business leaders improve their companies by offering insight they lack the experience and perspective to provide. By being insiders, we can all lose objectivity and face a lot of creative blockage. Shaking up the status quo by introducing new pools of knowledge is a productive way to solve old problems with untapped insights. People in "analogous fields," HBR concludes, are well-suited to bring novel ideas to the table untethered by procedural biases.
Related: The Power of Innovation
3. Innovation and problem solving.
When it comes to creative problem solving, looking to other industries can be especially fruitful, as HBR's study suggested. The study cites other examples, including when 3M developed a "breakthrough concept for preventing infections associated with surgery after getting input from a theatrical-makeup specialist who was knowledgeable about preventing facial skin infections."
Innovation can come from anywhere, and creativity is fueled by a healthy flow of new information -- like the knowledge pools mentioned above. How exactly does this solve problems? It takes the right type of brainstorm -- one that mixes depth and context with freshness. In other words, if you simply ask someone in an analogous field for ideas, without your expertise in the mix, they won't have the familiarity to be useful.
That's why looking beyond your industry must be strategic, specific and collaborative. Pair insiders with outsiders to identify best practices that address specific areas or concern. Otherwise, you may just be in for an interesting conversation without much business potential.
4. Knowing where to look.
One reason business leaders fail to look outside their industry may be the uncertainty of where exactly to look. It's easy to stay inside a box because you know what's in it and what to do with it. Once you step outside, there are dozens or more boxes you could explore. How on earth is one to choose, especially if the entire point is to examine unexpected correlations?
According to Upsize, a magazine for small business owners, a cross-industry review can help leaders identify best practices outside of their own industries. Wendy Ruyle, co-owner of 5 by 5, suggests a six-step approach: identifying goals, identifying best practice industries, discovery, reporting back, implementing, and testing and refining.
With this logic, the first place to look is, in fact, inward. By realizing your own limitations and issues, you can set goals and begin to search for exemplary analogous fields and businesses.
The authors of the HBR study suggest a similar process. "Clear away the details and ask yourself: What is the essence of the problem? Then describe it in such a way that potential solvers from analogous markets can connect their knowledge to it."
You might take Richardville's approach and set up a conversation, executive to executive. Or you might task trusted members of your team with research and exploration. Or you might sponsor a mutually-beneficial ideation session during which respective industry insiders put aside what's plaguing their own fields and apply their insights elsewhere.However you go about it, it is important that you never settle for "best" in your industry when there are countless other great examples to draw from. Even better, emulating companies outside your industry may allow you to disrupt your field through profound and thoughtful change.