When you google the word “benchmark”, the very first definition that pops up is: a standard or point of reference against which things may be compared or assessed. And after it runs through all of the alternative definitions (which are not to be confused with alternative facts – they may be similar but I’m pretty sure they’re not the same thing exactly. I’ll have to ask Kellyanne Conway), this particular dictionary offers a list of synonyms: standard, point of reference, gauge, guide, guideline, guiding principle, norm, touchstone, yardstick, barometer, indicator, measure, model, exemplar, pattern, convention, specification.
Real World Applications
Benchmarking has all kinds of applications in the real world. Companies use benchmarking to measure the quality of their internal policies, products, programs strategies, etc. against a set of internally generated standards or similar measurements of their peers and competitors. Mutual funds managers use the DJIA or S&P to measure relative performance.
Benchmarking also has a valuable application in executive search. In fact, benchmarking can save you a lot of time, money and aggravation in any recruitment activity you may undertake.
Setting the Standard
When a company is recruiting a VP Finance (or any other executive for that matter), the hiring authority first needs to set a virtual benchmark – what they think the incoming VP Finance should look like in terms of technical chops, industry experience, cultural fit, etc. In some cases, when the hiring authority is replacing a much respected incumbent, the outgoing VP Finance often serves as the initial benchmark.
However, in the owner-managed / small and medium size enterprises (SME) market, most CEOs don’t have the luxury of benchmarking against a well-respected incumbent VP Finance. In this market, even if the CEO is replacing a someone who’s done a great job, in many cases the company’s future growth plans may predicate hiring someone with a different profile and skill set to be the incoming VP Finance.
Hiring Your First VP Finance
And if the hiring authority is replacing an under-performing VP Finance or if the company is hiring its first VP Finance, they have to start the benchmarking process from scratch. I won’t get into what that process looks like here, but interested parties can find out what is involved by downloading our free e-book, The Owner-Manager’s Guide to Hiring a CFO.
What Does the Ideal VP Finance Look Like?
Of course, this initial benchmark becomes the preferred candidate profile. And this is what the hiring authority and the headhunter conducting the search use as a basis for the search strategy. In a perfect world, the preferred candidate profile should be comprehensive and cover every aspect of what an ideal candidate should look like. However, inasmuch as the client and the headhunter may think they understand what they’re looking for when the search begins, the proof, as they say, is in the pudding.
The Benchmark VP Finance Candidate
And the pudding in this case is what I refer to as the benchmark candidate. Sometime relatively early in any search I undertake, I come up with a candidate who I think fits the technical, cultural and personality specifications that my client and I originally agreed upon when we came up with the preferred candidate profile. Obviously, I’m not going to present anyone who I don’t think is quite a strong fit. To use a baseball analogy, I’m not necessarily striving to deliver the perfect pitch to the client, but I am trying to get one into the strike zone. And to continue with this baseball analogy, once the client has interviewed the benchmark candidate, we can use that candidate as a gauge to more specifically delineate the strike zone for good candidates and really zero in on what a perfect pitch would look like.
Verify / Fine Tune Your Specs Early in the Search
By interviewing a benchmark candidate early in the search, the client has the assurance that I know what I’m doing and I have the comfort of knowing that the client knows what they’re looking for. Also, if there are any adjustments to be made in the preferred candidate profile, we can do it early on in the search so the assignment can proceed to a successful conclusion without a lot of wasted time or effort.