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Peerview Data Insights

CEO School: What will your board do if you're wrong?

How’s business?

It’s a question that gets asked every day, but what does the answer really mean? For most companies, “doing well” means sales are better than last year while “doing okay” means sales are about the same.

The problem is that nobody is an industry of one. Everybody competes for customers and clients.  

You might think you're doing well but what if you're not?


CEO: Turns out we suck.

BOARD: But you told use we were leading our industry.

CEO: Uh... I guess I was wrong.

BOARD: Uh.... guess we were wrong, too — about you.

As University of Wisconsin professor Jordan Ellenberg noted in this Wall Street Journal article about using data to make good decisions, "A number by itself is often meaningless; it is the comparison between numbers that carries the force."

One thing we’ve learned since launching our small business management tool it’s that a company that only compares itself to itself isn’t getting the outside perspective it needs to stay competitive.


Three reasons:

  • 1. Performance is relative.
Double-digit growth is great unless everybody else in your category is hitting triple digits. If you don’t know why — Is it your prices? Your marketing pitch? Your products/services? Or are you just profitable where others are sacrificing margins for sales?— you don’t know how to react.
  • 2. Everybody sucks at something.
It doesn’t matter if you’re a “Best Company to Work For” or a “Top 10,” every company has at least one thing it could be doing better. That might not matter in good times, but nobody stays on top forever. Whether you think of a company as an engine, a team or an ecosystem, any part that’s not performing the way it should is holding you back.
  • 3. Nobody expects the Spanish Inquisition.
Or, to put it a way non-Monty Python fans can understand, disruption is unpredictable. While radical shifts do sometimes happen overnight, most of the time there warning signs. The best way to keep from getting blindsided? Keep your eyes on your competitors and constantly analyze your performance so don't have to stop and fix something when you should be moving.

The challenge for most small- to medium-size businesses (i.e. $1m to $50m in revenue) is that as much as they know they need to benchmark their performance this way, they don’t have the resources to do it themselves — even those with dedicated CFOs, COOs, CPOs and CMOs find that the process of aggregating and analyzing all that industry, trend and competitive data is not only time consuming and difficult, but expensive.

What can they do?

We think our Strategic Management & Planning tool is a great resources, of course, but government agencies like the SBA, peer groups like Vistage or CEO Roundtable, industry newsletters and business-specific bloggers can provide valuable competitive data, too.

The point is not where you get your information but why you need to, because if you're not comparing, you're not competing, and if you're not competing, you're not gonna be in business for too long.


(For more on alternative sources of competitive data and business intelligence, check out “CEO School: Compare or Die.”)


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Topics: Money People Customers Planning & Forecasting Competitive Analytics KPIs Business Performance Small Business