How might we define it?
You may be surprised to know that benchmarking is not:
- simply comparing performance results between one company and another
- visiting other companies to see ‘what they’re up to’
- copying others
- a one-off initiative
However it is suggested that benchmarking is:
- a structured, analytical, logical process of measuring a company’s products/processes/service against accepted ‘best practice’
- a way of identifying, adapting and adopting the best practices
- a potentially rigorous and objective feedback tool
- avoiding the mistakes others have already made
- no need to reinvent the wheel others have already invented
- improving further what others have already improved
- increased awareness of new techniques/approaches to producing an end result
There is a well recognised 12-step benchmarking process, first proposed by Robert Camp.
Whilst this could be the Rolls Royce version of the process it is resource intensive and could be seen as somewhat self serving.
So while we set out the possible steps below, you might just consider using a readymade system that has been applied by other organisations, that is based on a maturity model developed through extensive research. It may not be a one 2 one match for all components of your organisation but it will provide a solid frame of reference, the baseline or the benchmark by which you can evaluate you performance.
Dare we suggest the PeopleMAX index would be a good place start?
If you’re not going to use the readymade version the 12 step model tends to include these stages:
- check commitment; e.g. from managers with authority to provide the necessary resources
- identify activity; focus on the business needs; areas to be benchmarked should be selected based on contribution to business objectives
- plan the programme; document the WHAT, WHERE, WHY, WHEN, HOW WHO AND HOW MUCH
- select the team; typically should comprise 3-6 people who have knowledge and experience of the activity selected in step 2
- self-analyse; unless you know in detail how well you are performing before you benchmark, it will be difficult to know which particular areas you need to benchmark or how to measure any improvements
- select partners; you don’t have to stick to your field or industry; companies in other industries may have perfected the art of a particular process, or of part of a process
- establish bargaining potential; remember benchmarking is a process involving partners; so you need to think about what you can offer any potential partner and not just what you can receive
- GO for it; now you can visit the benchmark partner for data collection
- exchange info; specifically WHAT results the benchmark organisation has achieved and HOW it has achieved them; maintain confidentiality; the actual process of sharing is a valuable learning process -; as it causes you to reflect on what you have done
- evaluate the information; now you need to convert the collected info into useful information to establish trends, capabilities and gap between your process and the way the benchmark partner approaches theirs
- plan and implement change; unless something is done with the info received, the previous steps will have been for nothing
- review progress and re-benchmark; to make sure the benchmark benefits are brought through to the bottom line; to maintain market leadership, you’ll need to set new targets to reflect the changes and new demands from your market
The four most common cases of ‘benchmarking blues’:
- missing the point: seeing benchmarking as a competition, i.e. purely in terms of league table results; so you’ll learn what needs to be improved, but not how to improve it
- staying too close to home: the more alike the two firms are, eg from the same industry, the less likely they will be to trust each other; the current view is that firms and industries have flogged best practice in their own industry enough, so for ‘really new’ you must start looking outside your industry
- comparing apples with pears: i.e. failing to benchmark like with like; need to watch here how they measure the process you are looking to benchmark
- using scissors to cut grass: e.g. dedicating insufficient time, effort, brainpower and resources to the benchmarking process i.e. not enough people, so the process takes forever
However you might tackle the process, what is clear is that benchmarking is there to add value, to help identify areas strength and those of weakness.
If you use a maturity model as the benchmarking tool it will also help signpost the remedial action.