How Astute is Your Company at Benchmarking?
How many annual reports (of other companies) have you read and used to inspire strategic thinking and innovation in your business?"
At this time of the year, strategic planning cycles reach a phase where we naturally shift our attention from day-to-day business to the broader landscapes of markets, trends and competitors.
In his book “The Infinite Game”, Simon Sinek writes about the need for a worthy rival. It’s not about obsessing over a competitor or winning at any cost. Sinek’s principle is about being present and having a keen eye open for what’s going on around you. We encourage our clients to utilise these “worthy rivals” in the spirit of inspiring your organisation to progress towards your big, hairy, audacious goal (BHAG), deliver on your purpose and become an incredible company.
Worthy rivals could be either direct competitors or companies you respect from totally different industries. Any company report has some insights and learnings that can be used by you and your leadership team. Utilising the public access company annual reports and reviewing them for strategic and innovative insights is a simple yet super-powerful tactic that is not utilised widely at all.
So how do we harness wisdom from a worthy rival?
Pick a publicly listed company with an admirable performance that you’d like to replicate. This may be a direct competitor or a company you respect from outside your industry. You can find their annual reports listed online.
Read through their Annual Report, highlighting key points you could leverage to enhance the way you strategise and run your business. Here are some great insights on what to look for in an annual report by Warren Buffett.
Have your executive team read the same annual report in preparation for a dedicated 90 minute discussion aimed to collectively unpack key themes and points that may be applicable to your business. NOTE: this could be a discussion that is incorporated into your business’ Annual Strategic Planning session.
Discuss how you can apply these ideas to your business, and lock in accountabilities for bringing these tasks to life.
Create a rhythm for this task – i.e.. Reviewing Annual Reports. It may be once a year, once a quarter, or once a month. Whatever you choose, simply ensure it is executed.
Keep in mind that obtaining worthy benchmarking information is no easy feat. As mentioned earlier, the object of analysis does not necessarily need to be your competition or even from your field. A lot of inspiration can come from companies outside of your industry. It can be any company you respect or an innovative company you wish to learn from.
For example, CSL dominates the global market of biotechnology. They are also listed on the ASX, so all their annual reports and other information regarding strategy and finances can be easily obtained. Here’s what you can learn by skimming through their 2021/22 report:
They are driven by their core purpose, making good on their promise to save lives. CSL employees are motivated by more than financial profit.
They define company culture as the bedrock and precursor to their success. An inclusive culture allows people to engage with their business regardless of societal norms and market conditions.
Science AND people together give CSL a competitive edge over their competition. They have an “and” strategy, not an “or” strategy.
As you can see, the value-based strategic themes of even a biotech business can be implemented into any company, regardless of the industry you’re in.
We are very interested to hear which company you decide to tackle for this exercise, and how you plan to integrate the learnings into your strategy!
Reflect on your team dynamics and consider how well-aligned everyone is with your core values. Are there areas where egos are taking precedence over collective goals? Discuss these insights with your leadership team and work together to reinforce a culture that prioritises the greater good of the organisation.
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