I’ve long joked that parents should take their children to church so kids will have something to rebel against when they grow up. Without a foundation, there’s nothing to question or embrace. In business, you do the same by comparing your performance to benchmarks. And, like a child, as you age you may find yourself questioning those benchmarks. I did recently with two recent reports.
The first can be found in a story where we give performance data for this and past Big50 classes. Those reports show that the latest Big50 group posted average gross margins of about 33% and net profits of roughly 9% in 2012. The numbers for this high-performing group are markedly higher than those reported in other, more democratic surveys, and they’ve been remarkably consistent for all Big50 groups since 2006. Because of this work, I’ve now set these numbers as my new benchmark for judging which remodelers among you rank among the elite.
My second lesson on benchmarks stems from a letter to the editor by Scott Foley of Foley Construction, in Livermore, Calif., regarding a story in our May issue. The article said that the Centers for Disease Control had cut in half the amount of micrograms of lead per deciliter of child’s blood that it regards as a “level of concern.”
“This is not the first time they have lowered the blood levels,” Foley said. “The original measurement was 20 micrograms per deciliter. I believe they keep lowering the standard because there are no cases of actual lead poisoning in the remodeling industry. I think it is time to realize the threat of lead poisoning is not worth the billions of dollars, additional time, and regulations that are being heaved upon the U.S. citizenry.”
Actually, the CDC keeps dropping its “level of concern” because it believes there’s no level above zero that can be considered safe. So it uses an arbitrary number — one that takes in just 2.5% of the measured population — and says that’s where its concern begins.
Of course, as Foley argues, getting to zero might cost more than the effort is worth, but we can discuss that another time. My point here is that the CDC was just following common business practices when it set tougher goals after the nation has done so well meeting an old standard. Whether the concern is lead paint or your company’s performance, once the old benchmark gets easy to achieve, it’s time to move the goal posts.
—Craig Webb is editor-in-chief of REMODELING. Find him on Twitter at @RemodelingMag.