Glossary
Benchmark
A benchmark is a figure from outside your company used to judge whether your own number is any good: an industry median for churn or win rate. Benchmarks are worth a sanity check at the start and very little afterwards, because definitions differ between companies and almost nobody publishes theirs. Set the goal from your own trailing thirteen weeks instead.
01
Why your own history beats an industry average
Scorecard goals should come from your own trailing thirteen weeks rather than from a benchmark. Your customer mix, your definition of an on-time delivery and your accounting choices are all different from the survey's. Use an outside figure once, to find out whether you are in a different order of magnitude from everybody else, then set the goal from your data.
Benchmarks fail quietly, because the definition travels less well than the number. A published average sales cycle of forty-two days means nothing until you know whether the clock starts at first contact or at qualification. Teams chasing a benchmark tend to change the measurement rather than the business, and the board improves while nothing else has.
Worked example: A small managed services provider read that good gross margin in its sector was around fifty percent, saw its own at thirty-eight, and spent a quarter cutting engineer hours. The published figure counted only recurring contract revenue. Once hardware resale came out of the calculation, their recurring margin was fifty-two percent and the real problem was mix.
Sources: klipfolio.com/resources/kpi-examples; nist.gov/baldrige/self-assessing/baldrige-key-terms
Target
A target is the number written beside a measure that says what a good week looks like: twelve proposals, ninety-five percent on time, cash collected.
02Trailing 13-week view
A trailing thirteen-week view keeps a quarter of history beside the current number, so one bad week reads as noise and a repeated miss reads as a pattern.
03Gross margin
Gross margin is revenue minus the direct cost of delivering it, as a percentage: a ten thousand dollar job costing six thousand runs at forty percent.
04KPIs: what they are, how many to track, and which matter
A practical guide to key performance indicators for small companies: definitions, leading vs lagging measures, examples by department, and how many to track.
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