HumanMarkets

It’s old news to say that benchmarking to best practices is not always such a great idea. The old question of “best for who?” is a good one. But what does make sense? How do you know how to evalute your practice against that of others? No doubt there are also many good answers for this question – here is just one small one -

A guy trying to build his HR consulting business asked me to breakfast a bit back. He asked me how to develop relationships with stature in the HR community. My answer was to ask good questions (not original advice). It became clear from the silence in his eyes, that I needed to suggest one or two. Here is the suggestion – restructured for in-house HR.

Have a clear understanding of your business model as it relates to people. A basic question is: “are people, the drivers of value of your business, or is something else?”

A different way to ask the question is: “how much of the change in the value of your business is driven by the difference in ‘pretty good’, versus ‘really excellent’ employees”?

It’s OK to say that your business model is not people driven. It might be driven by product, legal necessity, monopoly or utility.

If you have a people-driven business – be the best at giving them what they want – then you win.

If you do not have a people-business driven business, acquire the calibrated talent that you need at as low a cost as possible.

Answer this question correctly, either on a total enterprise basis, or a function-by-function basis and you probably win the first round in the HR olympics. Know how to give people what they want the “best” on an all-in basis for them, the company, its shareholders, customers and neighbors,  and your are in the medal stage.

[By the by, if you are selling to corporate HR types; the way to use the Q&A is: if it is not a people-driven business sell "low-cost" solutions; if it is a people-driven business, sell fierce competitive advantage in the market for labor.]

Only consider benchmarking once you know what your fundamental, directional economic goal needs to be. Benchmarking prior to knowing that answer make HR people look trite and disconnected to the business.