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Benchmarking: It’s the Process, Not the Data That Matters September 20, 2012

Posted by Tim Rodgers in Management & leadership, Process engineering, strategy.
Tags: , , , , ,

It seems not that long ago that benchmarking was another “next big thing,” touted as an invaluable tool for strategic planning and operational improvement. I remember attending several training seminars that cited examples from clever firms that used publicly-available information or found benchmarking partners who were willing to share details about some industry-leading or “best in class” process. Whatever the source, these firms were able to make dramatic improvements in their process by leveraging these best practices, typically after some customizing for their own local ecosystem.

Or at least that’s how it’s supposed to work.

I think one big reason why we don’t hear much about benchmarking any more is that many organizations either misunderstood the concept, or discovered that it’s harder than they expected. I’ve seen a lot of presentations that included “benchmarking data” that showed the performance of our competitors in some key area. Obviously it’s good to know how your competition is doing, but benchmarking isn’t about compiling a table of numbers comparing your business to theirs.

What’s often lost is the reason to do this in the first place. It’s supposed to start with a prioritized need to improve some key process or function, learning how to do it better, and then committing to a change management program to implement best practices. Because it’s pretty unlikely that your competitors are going to help you, benchmarking requires identifying companies (or possibly even other organizations within your own business) who perform that process or function well, regardless of their industry. In addition, the breakthrough ideas are more likely to come from outside your industry, and those folks are much more likely to cooperate with your investigation.

It’s easy to say “that can’t work here,” particularly if there are significant changes required to implement the lessons. This is when it’s important to go back to the start to re-visit the business need and why it was a good idea to try benchmarking in the first place. That’s no different from any other change management initiative that requires high-level support and perseverance.



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