Benchmarking: A Practitioner’s Guide

Do you have people reporting to you that need to perform a benchmarking project? Or perhaps you want to consider a career in benchmarking? Or freshen up your benchmarking knowledge?

In this post we will explore:

What is benchmarking?

Benchmarking is an in-depth critical examination of an organization, product, or process to determine how it compares with other organizations, products, or processes that may be considered as being ‘best in class.

What are the main advantages of benchmarking?

The main advantages of benchmarking are:

  • Increased competitiveness.
  • Improved standards.
  • Improved efficiency.
  • Increased customer focus.
  • Reduced risk.
  • A culture of continuous improvement develops.
  • Areas of improvement are highlighted.
  • Key activities are identified.
  • A focus on quality.
  • Increased performance.
  • Greater performance expectations.

What are the main disadvantages of benchmarking?

In contrast, the main disadvantages are:

  • It’s open to bias.
  • Can create dependencies.
  • May be impacted by a lack of information.
  • Can be costly.
  • Can create inaccurate comparisons.
  • May hinder understanding.
  • Can create stagnation.
  • May reduce customer satisfaction.

The 7 main types of benchmarking that are used in companies

Become effective at running a benchmarking project, ready to face the opportunities that can emerge requires a solid understanding of the main types of benchmarking available. These are:

  1. Internal benchmarking: This form of benchmarking happens within and across a company. The benchmarking project will seek to compare across different departments, functions, and areas within the company. This form of benchmarking is relatively easy to complete as there should be fewer challenges in accessing the right data and personnel.
  2. External benchmarking: This form of benchmarking seeks to compare the metrics and practices of one company against one or more other companies. Not only does this allow the company to see where they fit within the wider industry they can also acquire best practices that will make them more successful.
  3. Performance benchmarking: This benchmarking seeks to collect and compare key performance indicators so as to both identify and meet performance gaps.
  4. Practice benchmarking: This type of benchmarking focuses on collating and comparing data on how work practices are undertaken so as to identify best practices and areas for improvement.
  5. Process benchmarking: This type of benchmarking involves collecting and comparing data on processes both across and generally outside the company are undertaken so as to identify best practices and areas for improvement.
  6. Strategic benchmarking: This type of benchmarking seeks to compare and understand how companies become successful. The benchmarking project will focus on what strategies companies utilized to make them successful.
  7. Competitive benchmarking: This specifically involves collating and comparing data on what competitors are doing so as to highlight best practices and areas for improvement.

Successful benchmarking projects

All benchmarking initiatives must be undertaken and structured as a project. This means that benchmarking activity must be:

  • Planned with clear objectives and timelines.
  • Resourced appropriately.
  • Shown to be of benefit and not for blame.
  • Communicated in an open manner.
  • Involve whatever personnel is relevant to it.

Each of these requirements must be attended to in order to ensure that the project will have a high probability of success.

In fact, the impact of failing to provide these necessary prerequisites for a project will be evident as damage to the outcome, by either preventing any success at all or by reducing the level of success to below the full potential.

Building the project team

People are a vital component in any project.

When building a project team, it is important to have the characteristics outlined below so as to maximize the opportunity for running a successful project.

The success of the project will be dependent upon a number of factors but primarily on the characteristics of the team assigned to the project.

Successful team members are generally:

  • Open-minded.
  • Analytical
  • Knowledgeable (re: business and process).
  • Availability.
  • Authority.
  • Credibility and respect.
  • Communication skills.
  • Planning skills.
  • Action-oriented.

Team success will be related to the clarity of the:

  • Roles.
  • Responsibilities.
  • Objectives.

To a large extent, team effectiveness will be due to the level and quality of the communication that exists.

Roles within the benchmarking project team

The project leader will always play a critical role in the overall function of the team in terms of:

  • Coordinating processes.
  • Interface management.
  • Provision of direction.
  • Decision-making.

In particular, the project leader has to be knowledgeable regarding the process, people, and products involved in the project. They must also possess all of the characteristics outlined in the last section if they are to lead the project team to success.

  • The recorder in the team will:
  • Manage all relevant documentation.
  • Record all minutes.
  • Link activity with the project plan.
  • Provide the leader with information relevant to the decision-making process.

The recorder needs to ensure that the information generated by the project is maintained in a secure and safe location as there is usually a high degree of cross-referencing between the different information sets both during and after the project.

Finally, the team members are responsible for:

  • Carrying out tasks as assigned to them by the team leader.
  • Ensuring all relevant documentation gets to the recorder.
  • Understanding clearly the scope and activities of the benchmarking project.

The team members must work closely with each other and the project leader so as to ensure that all activities are co-coordinated and any problems are highlighted and dealt with as they arise.

What are the key steps involved in a benchmarking project?

Understanding and implementing the right stages of a project is often cited as the number one concern of companies. It seems we are all keen to be the best and need some nudges in the right direction.

In a nutshell, the key stages to effectively complete a project are:

  1. Select the most appropriate approach to use.
  2. Set the objectives of a project.
  3. Prepare and plan activities.
  4. Review project findings.
  5. Focus on implementing improvements.
  6. Evaluate the project.

Why do benchmarking projects fail?

Not all projects are guaranteed success.

In some cases, the failure is complete with no gains being made. In other cases, failure is seen as the project not delivering to its maximum potential.

In general, projects fail due to:

  • Lack of clarity of purpose or focus.
  • Poor level of involvement.
  • Communication problems.
  • No follow-through of implementation.
  • Lack of resources.
  • Lack of an understanding of the benefits to be gained.
  • Lack of clarity on the improvements that are required for survival.

Who Needs Effective Benchmarking Skills?

  • Senior management that wants to strengthen their relationships with staff.
  • Managers, supervisors, and team leaders need skills to lead, manage and motivate their teams.
  • Administrative, support staff, and line staff that needs benchmarking skills to maximize their engagement and participation within the organization.
  • HR professionals need skills to meet the needs of the departments that they support.
  • Project managers need skills to create more engagement and collaboration with their teams.
  • Organizational development professionals need skills to secure relationships and participation from all functions within the organization.
  • Consultants and independent contractors who are being asked to play a role in organizational initiatives.

Get training material to deliver your own training courses on 360-degree feedback skills

You can download and use this off-the-shelf and customizable training material to instruct your learners about benchmarking.

Anyone involved with quality initiatives – on their own or within teams and who wants to introduce best practices more effectively will benefit from attending this training course. In particular, this training will help learners to successfully identify and introduce improvements that are needed to deliver success.

Through hands-on exercises and examples, learners will explore why some projects fail and the components of a benchmarking system. Designed to be accessible for all categories of employees, learners will discover how employees influence the success of projects. Throughout the training course, learners will learn how to develop a project. And, from the slide deck and learner manual, they will learn how to identify the role of benchmarking within companies.

At the end of this training, participants will be able to:

  • Understand the importance of benchmarking.
  • Identify the components of a benchmarking system.
  • Describe why some benchmarking projects fail.
  • Understand how employees influence benchmarking projects.
  • Develop a benchmarking project.
  • Identify the role of benchmarking.

What You Get

  • A 72 Page Instructor Guide
  • A 67 Page Participant Manual
  • 82 Customizable PowerPoint Slides
  • Training Games And Training Icebreakers
  • A Course Advertorial
  • Eight Pre-written Expert Training Guides
  • Customizable Exercises And Tests
  • Further Reading Lists

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