Why External Benchmarking Fails HR Teams

Claire Monroe

Welcome to the show everybody! I'm Claire Monroe, here with Edwin Carrington. And Edwin, I want to start with a concept that almost every HR department treats like holy scripture: external benchmarking. We constantly ask, "How do our people metrics compare to the rest of the industry?" But I recently read a scathing critique by Craig Starbuck that basically says this is a giant trap. He argues external benchmarking just breeds mediocrity and groupthink.

Edwin Carrington

Craig Starbuck is spot on, Claire. When you benchmark externally, you're essentially looking at your competitors, averaging out their behaviors, and saying, "Let's be exactly like that." But why would you want to copy the average? You're ignoring the unique DNA of your own high-performing teams to chase an industry baseline that might be totally dysfunctional.

Claire Monroe

Right, like aiming for a C-plus just because everyone else is getting a C-plus. And the financial cost of getting this wrong is staggering. I was looking at McKinsey's 2023 State of Organizations report, and they found that companies in the top quartile for organizational health see three times higher total shareholder returns than those in the bottom. Three times! Yet, they also found that seventy-two percent of organizational transformations fail. Seventy-two percent, Edwin. That is a massive failure rate.

Edwin Carrington

Seventy-two percent is a tragedy of alignment. It means nearly three-quarters of these massive, expensive initiatives are falling apart because leaders are trying to force-fit a generic, external playbook onto their unique internal structures. If you don't understand the behavioral makeup of the teams actually executing the work, you are flying blind.

Claire Monroe

So instead of looking outward, we need to turn the camera inward. But how do we do internal benchmarking without making classic mistakes? Like, you can't just compare a software engineer's behavioral profile to a salesperson's and expect them to look the same.

Edwin Carrington

Exactly. Comparing non-comparable roles is a fast track to disaster. You need to standardize your definitions first. Internal benchmarking isn't about hitting some arbitrary, universal number. It's about diagnosing the "how" and the "why." Why is Team A in your sales department outperforming Team B by forty percent, even though they have the same resources? That's the question you want to answer.

Claire Monroe

That shift from "what is the number" to "why is this happening" is huge. But actually putting this into practice feels like it could get incredibly complex, fast. How do you roll out behavioral analytics without getting bogged down in endless data?

Edwin Carrington

You keep it simple. Gartner actually has some brilliant advice on strategic workforce planning here. They suggest scoping narrow to reduce complexity. Instead of building these massive, multi-million dollar vanity dashboards that try to measure everything and end up measuring nothing, you build flexible, adaptive plans. Start with one critical business unit.

Claire Monroe

One unit. I love that. So instead of a massive corporate rollout, you run a pilot. What does that actually look like on a timeline? Let's say a thirty-to-ninety-day blueprint.

Edwin Carrington

In the first thirty days, you establish your baseline. You use behavioral data to map the natural wiring of your current people in that specific unit. What are their communication styles? How do they handle pressure? You aren't judging them; you're just capturing the reality. And crucially, Claire, you are not creating a rigid "ideal personality" template. That's another trap. You don't want a team of identical clones.

Claire Monroe

Yeah, a team of ten identical, highly assertive drivers sounds like an absolute nightmare. You'd have constant turf wars. So the baseline is about cognitive and behavioral diversity, but mapped to actual performance outcomes.

Edwin Carrington

Precisely. It's about finding the behavioral patterns that correlate with success in different roles. Then, by day sixty, you start identifying the gaps -- where is the friction happening? And by day ninety, you're executing targeted, flexible adjustments. You're coaching managers based on their team's actual behavioral friction points, not some generic management textbook.

Claire Monroe

Ninety days to go from guessing to actually knowing the behavioral dynamics driving your top teams. That is incredibly actionable. And honestly, if you're listening and want to stop relying on flawed external benchmarks, you should check out OAD's platform. They specialize in this exact kind of behavioral analytics. You can get a free demo of their platform right now by going to O-A-D dot A-I. That's O-A-D dot A-I.

Edwin Carrington

It's well worth the look, Claire. When you understand the behavioral data of your own people, you stop chasing the competition and start mastering your own organization.

Claire Monroe

Perfect place to leave it. Thanks for the wisdom, Edwin.

Edwin Carrington

Always a pleasure, Claire.