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Benchmarking – A 'Must Do' Improvement Tool for Organisational Performance |
Coverage of brief presentation by Bruce Searles & Anton Benc, Managing Partners, Benchmarking PartnershipsPartnering to Improve Through Benchmarking we partner people in different organisations and different industries so that through shared learning and partnership networking they can rapidly improve their organisations. Benefits Benchmarking is an improvement tool that has continued to stand the test of time – it has been used successfully by leading organisations since the 1980s. Benchmarking is a focus for Business Excellence frameworks across the globe – in fact in over 80 different countries. In fact, benchmarking is the only improvement tool recommended by the various Business Excellence Frameworks in over 80 different countries. While not difficult, benchmarking must be done well to produce the large and sustainable benefits that can be achieved. That is why Benchmarking Partnerships have a two-day applied training course on how to do Benchmarking Well. The basic method for doing benchmarking well is shown below: The planning phase of benchmarking, linked to the strategic goals for the organisation is vital.
If value from the benchmarking process(stages 2,3 and 4) is seen above the ‘waterline’ in the Iceberg analogy below, then there is much to do in stage 1 (below the waterline) for this value to be realised. The benchmarking focus is therefore initially serving to get the Planning and Analysis done correctly.
When done well the benefits from benchmarking are substantial, as shown on the following examples of large changes sustained by organizations in various continents: The countries in red show the leverage through Benchmarking Partnerships.
Benchmarking is an improvement tool for the future. A recent survey by the Global Benchmarking Network of over 400 organisations across the globe showed that Benchmarking will be the most used improvement tool in future:
So you will need to know how to do benchmarking well in order have a chance of keeping ahead of your competitors and applying the latest customer service best practices. Benchmarking Partnerships has a seat on the Board of Management of the Global Benchmarking Network. Benchmarking Definition Benchmarking is much more than finding the ‘Benchmarks’ from numerical comparisons, it’s a structured discovery process. Benchmarking is about accelerating implementation of your organisations’ vision through your strategic plan. Benchmarking is about closing performance gaps from learning the very good and innovative practices from other organisations for your prioritised scope and project focus, and then adapting these innovative practices back into your business and area of work. Benchmarking is an improvement tool for finding, adapting and implementing outstanding practices so that you can achieve superior performance. Benchmarking comprises:
You learn the How’s (the Best Practices) from different industries to accelerate your improvement of your own Key Performance Indicator Results through engagement of your people. Re-measure tracks performance improvement. Use proven Code of Conduct to protect the confidentiality and privacy of knowledge exchanged and to ensure a two-way flow of best practices. Benchmarking Myths Not only do we want to guide organisations on how they can rapidly improve by not going through the pain of reinventing the wheel that someone else has already invented but we want to dispel some of the myths about what benchmarking is and what it isn’t. It’s not just about comparing performance results – it’s about closing performance gaps by looking outside the organization. You also learn from your benchmarking partners not only the innovations of how to do things much better how to avoid implementation pitfalls. Benchmarking is also about learning completely different ways of doing things much better from other industries – like the airline that halved its turnaround time (from landing to take-off) by benchmarking with a race car pit crew. A lot of people don’t believe that they can learn from other industries – but our experience is that this is the best form of learning to improve and we have methods that we will share for doing this. Don’t re-invent the wheel you need that someone else has already invented. Benchmarking Partnerships will teach you how to find the wheel you need, and how to build it.
What Benchmarking Is and is Not Benchmarking not just networking lunches or meetings – its needs to have a definite focus on the most important improvement needs for each organisation – the things that keep the boss awake at night. There are a number of fallacies about benchmarking that need to be put to bed so that we are all speaking a common language – and doing it. For example, a lot of organisations try to compare performance outputs with others eg abandoned telephone calls for a call centre, worker injuries, profitability, output per worker – these performance output comparisons are completely false as you are almost invariably comparing apples with oranges.
What we need to measure and compare is the processes within organisations that result in the desired outputs and then learn best practices to improve the processes. Benchmarking is a powerful performance management tool, which can be used to generate both incremental change and wide-ranging strategic reform for an organisation. It is a learning process in which information, knowledge and experience about leading practices is shared through partnerships between organisations. It allows an organisation to compare itself with others and, in the process, step back from itself and reflect. Comparative measurement through benchmarking helps to identify problems and opportunities and also test hypotheses and “gut feelings” about performance. Benchmarking offers an organisation an opportunity to change and to improve. The Benchmarking Process Benchmarking is not a single event. It is an ongoing process for finding improved ways of doing things. The basic steps are:
Benchmarking Vs Benchmarks There is an important distinction between benchmarking as a process and specific benchmarks. Many people regard the benchmarks as benchmarking, when this is only a small part of the benchmarking process. Benchmarking is the process that starts from identifying an area for improvement and ends in enhancing productivity and the quality of services. Benchmarks are data comparisons, such as performance output figures. They can be a pointer to what you should be improving and from whom you should be learning. Benchmarking does not mean simply collecting and comparing benchmarks or other performance figures (eg staff turnover or debtor days). Performance is invariably measured in different ways by different organisations and figures alone are not a reliable basis for comparison. However, it can be valuable to partner with other organisations on a regular basis to compare performance figures and discuss the merits of alternative management and operational practices and systems. Types of Benchmarking & Partners You can choose different kinds of partners for benchmarking. Sector benchmarking:
Industry or Functional benchmarking:
Generic benchmarking:
Internal benchmarking:
Competitive Benchmarking:
Organisations starting their first benchmarking project may test the water with sector benchmarking in a familiar environment and move on to other forms once the benefits of benchmarking are established and accepted. Generic benchmarking often produces the greatest benefits because it highlights ways of working outside existing paradigms. However, this demands a sound knowledge of the benchmarking process and organisations must be specific about where improvements are needed, to ensure that relevant benchmarking partners are selected. Partnerships can be at the internal, local, state, national or international level. Organisations need to determine the most appropriate choice for each situation. Contact us: Bruce Searles: phone: +61 418 267 794. Email Anton Benc: phone: +61 409 145 033. Email Close window |
