WHAT’S THE VALUE OF BENCHMARKING IN ORGANISATION DESIGN?
“Do you provide benchmarking data?”
A question I’m often asked by clients. While I sometimes work with benchmark data provided by firms I collaborate with, my answer is usually no, because I’ve generally not considered benchmarking valuable in helping clients achieve meaningful outcomes.
Finding better ways to organise—whatever your definition of ‘better’ is—is a complex challenge with no one-size-fits-all solution. If a universally effective model existed, every organisation would already be using it. While there may be similarities between organisations, every context is unique, and what works in one setting may not translate to another.
That said, I’ve recently been questioning my rigidity on this. Here’s where I’ve landed.
What is Benchmarking?
Benchmarking is the process of comparing an organisation’s practices, processes, or performance metrics against industry standards or ‘best-in-class’ companies. In organisation design, clients typically seek benchmarking insights on:
Full-time equivalents (FTEs) to sales ratios and percentage costs to sales ratios.
Example operating models and organisational structures.
The Espoused Value of Benchmarking in Organisation Design
Fans of benchmarking will usually claim the following benefits:
It supports the process of strategic alignment: Organisation design is about aligning internal efforts with strategic goals. Whether aiming for growth, innovation, or improved customer satisfaction, benchmarking provides insights into how others have structured themselves for similar goals.
It provides a quick route through to areas for improvement: Comparing an organisation to high-performing peers can highlight inefficiencies, skill gaps, or suboptimal team structures that hinder performance. For instance, if a sales team struggles to meet targets, examining how other successful organisations design their sales teams may reveal overlooked solutions.
It reveals ‘best practice’: Studying other organisations exposes teams to innovative practices and proven methods. For example, If leading companies prioritise cross-functional teams for problem-solving, this could inspire a rethink on how teams are organised to enhance collaboration and agility.
It helps build the case for change: Organisational redesign is more likely to create anxiety and resistance than excitement. Benchmarking provides evidence to explain why certain shifts are beneficial and where others have already made the transition successfully, in service of building support for the change.
All of this sounds great, right? So, what’s the issue?
The Problems with Benchmarking
In my experience, these claimed benefits are overstated. The ‘perils’ of benchmarking that I observe fall into four main categories:
Ignoring Context, Intent, and Uniqueness: Every organisation has a unique purpose, strategy, and culture. Differences in commercial imperatives, lifecycle stage, customer expectations, shareholder pressures, and resources make direct comparisons problematic. Benchmarking can sometimes encourage quick fixes rather than deeper, context-driven thinking. I’ve seen functional leaders misuse benchmarking data to shift the burden of change onto others rather than working collaboratively to address their organisation’s unique challenges.
Lagging Instead of Leading: Benchmarking focuses on what has been done, not what could be done. It assumes data is accurate and reflective of the current state, which is rarely the case. Relying too much on benchmarking can lead organisations to follow rather than innovate, keeping them perpetually in catch-up mode rather than exploring solutions tailored to their unique context.
Stifling Creativity and Differentiation: Overuse of benchmarking can lead organisations to mimic competitors rather than cultivate their own strengths. This ‘cookie-cutter’ approach can dilute differentiation in the marketplace and contribute to stagnation and decline.
Underestimating what it takes to build internal engagement and alignment: While benchmarking can inspire, simply presenting data on what other successful organisations are doing is rarely enough to foster genuine engagement and ownership of change. Engagement and alignment come from a process that involves people in building a shared understanding of the challenges, sparks fresh thinking, and creates space for meaningful conversations. As Myron’s maxims remind us:
People own what they help create.
Real change happens in real work.
Those who do the work, do the change.
So, is using benchmarking in organisation design a waste of time?
Generally, I’m still sceptical. I find over-reliance on benchmarking tends to lead to lazy thinking and outcomes that few feel good about and rarely lead to sustainable improvements. However, my reflections have led me to see that benchmarking can bring value to the work when viewed through the following lenses:
A Source of Questions, Not Answers: If we reframe benchmarking as a tool for generating questions rather than providing ready-made solutions, it can expand perspectives and inspire fresh thinking. The key is resisting the urge to jump to conclusions too quickly—something that is easier said than done.
A Means to Contain Anxiety: Containment is a psychological process related to anxiety. When there is enough containment, levels of anxiety are tolerable - we can function well, collaborate with others, access our thinking, and bring the best of ourselves to the task at hand. Organisation design inherently creates uncertainty, which can lead to heightened anxiety to the point where effective thinking and collaboration is compromised. Benchmarking can support containment – not by offering definitive solutions but by giving people a sense of what’s possible, preventing them from feeling overwhelmed by a blank page.
In Summary
Mention organisation design and most people shudder. We’ve all seen it done poorly, with damaging consequences. I understand the temptation to use benchmarking to find quick answers and minimise disruption but, in my experience, this approach rarely leads to sustainable outcomes and often serves to aggravate and prolong uncertainty and anxiety.
Organisation design can be a stimulating and generative process that builds capability, clarity, and optimism, even when difficult decisions lead to role eliminations and painful changes. When benchmarking is used as a reference point rather than a rigid blueprint—when it serves as a source of questions rather than prescriptive solutions—it has value. But ultimately, successful outcomes emerge when organisations do the hard work of understanding their unique context and designing for what they truly need.