The Value of Benchmarking
If you learn to creatively benchmark there is no limit to how much you might improve your performance.
It allows you to identify and adapt best practices from other organizations to improve yourself and your business. Benchmarking is a key management tool you don’t want to be without.
The term benchmark originated as a surveying term. It is a distinguishable mark placed on a wall, building or rock that is used as a reference point to determine elevation and position in topography surveys.
In business today we use a benchmark in much the same way - to select a reference point to make measurements. It becomes a standard that we measure ourselves, our companies, our products, and our services too.
Before you benchmark your business activities, take twenty minutes to benchmark yourself. This is a guaranteed fun and enlightening task. How would you bench mark yourself as a husband or wife, parent or child, friend, entrepreneur, or professional? What would be important for you to measure and what would you do to improve your score? Are you enthusiastic, generous, kind, grateful, competitive or....?
Now back to business, Benchmarking is the process of not just identifying, but understanding and implementing “best practices" in specific areas of your business. It is used extensively in the health field to measure doctor and hospital performance and procedures but can be effectively used in almost any field where activities can be measured.
Help you understand where you may have a competitive opportunity, challenge or threat
Lead you to new revenue using existing skills and infrastructure
Increase your productivity, reduce cycle time, or improve your return on assets employed
Give you a powerful new marketing claim
Reduce costs by changing systems, lowering errors and wastage or eliminating re-work
Reduce inventory levels while increasing customer satisfaction
Better manage insurance costs
Create a new pride and a renewed level of employee engagement.
Or it can be another bureaucratic project, laden with frustrations. The choice is yours.
The search for "best practices" can take place both within and outside a particular industry, country or region. Quite often the best results of Benchmarking are when you look at your competition, but then the information is often limited without the equivalent of corporate espionage. So a common strategy is to either agree as a community to work together within an industry for the common good such as in the transportation of dangerous chemicals or outside a particular industry to discover whether there are lessons to be learned from other industries.
The objective of Benchmarking is to understand and evaluate the current position of a business or organisation in relation to "best practice" and to identify areas and means of performance improvement.
It involves looking outward (outside a particular business, organisation, industry, region or country) to examine how others achieve their performance levels and to understand the processes they use. In this way Benchmarking helps explain the processes behind excellent performance.
The process includes:
- Understanding in detail existing business processes
- Analyzing the processes and measured performance of others
- Comparing the two performance levels
- Implementing the steps necessary to close any performance gap or take advantage of others processes to improve your existing performance even when it is already superior.
ISO, The International Standards Association is the recognized world leader in benchmarking with a standard measurement system that eases comparisons between industries and countries. They work on the principle of Plan – Do – Check – Act (PDCA)
Plan – establish objectives and make plans (analyze your organization's situation, establish your overall objectives and set your interim targets, and develop plans to achieve them).
Do – implement your plans (do what you planned to).
Check – measure your results (measure/monitor how far your actual achievements meet your planned objectives).
Act – correct and improve your plans and how you put them into practice (correct and learn from your mistakes to improve your plans in order to achieve better results next time).
We believe benchmarking is a valuable exercise with a tremendous return on investment potential regardless of the size of a company you are in.
We are only one set of minds and if we enrol your brainpower, experiences and knowledge we may learn more quickly how to capitalize on the strategy of benchmarking both personally and corporately.
or email your thoughts and questions to email@example.com
to continue the conversation!