Benchmarking for Performance Improvement
There are two good reasons for organisations to benchmark themselves. First, it will help them stay in business by offering opportunities to become better than other similar organisations, competitors or not. Second, it ensures that an organisation is continually striving to improve its performance through learning. Benchmarking opens minds to new ideas from sources either within the same industry or from many other unrelated industries, identifying how those who have demonstrated performance leadership work.
Yet many organisations benchmark simply to be able to demonstrate to stakeholders, be they customers, shareholders, lenders, regulators, etc., that the organisation is performing to
an acceptable level. Of course this is a perfectly legitimate reason for benchmarking, although the real value of the benchmarking exercise is missed by narrowing the focus in this way.
Benchmarking also provides a very effective input to an organization’s strategic planning processes by establishing credible goals and realistic targets based upon external references. We will focus on strategic planning in the next whitepaper in our series.
To really grasp the intent of benchmarking, an organization should be benchmarking not only to demonstrate good performance but also to identify ways in which it can change its practice to significantly improve its performance. Those organizations with a strong performance improvement culture will be benchmarking continuously as this provides them with objective evidence of where to focus improvement activities, how much they should be improving, and what changes to their working practices they might consider to realize improvements.
What You’ll Learn
- The seven objectives of benchmarking
- The nine key factors of any successful benchmarking program
- The seven-step benchmarking process
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