Measuring results is the best way to improve what you are doing. This is the core of almost all quality management systems and benchmarking is a form of measurement – where you measure against something else to see where you are lagging, identify the areas and take corrective action.
Benchmarking should be a learning process, however, not just a measurement exercise. It’s a starting point for continuous improvement.
Pick Your Battles
You have limited time and energy, so focus your benchmarking initiative on key areas that will have a large impact rather than on everything you do. You can always go back to the other areas later.
You can also start with a quick exercise that covers most areas and use that to focus your efforts on more in-depth issues or areas of importance to your organization. You may already have an idea of where you are lagging and should simply focus on those to start.
Published benchmarking results are a good start to identify areas for furuther study, but even at a high-level, you need to use them carefully. Review the methodology and look at the sample size, number of participants, facility types and volumes if applicable. You will probably need to make adjustments to the information based on your specific situation, geography and other factors that are unique to you to ensure an equal comparison.
Many benchmarking results use averages, which can be very misleading, driving you to the wrong conclusion and decisions. That’s why you need to dig deep and fully understand what you are comparing. Averages can include a wide sampling of comparisons, not all of which will be relevant.
Be sure they include the same information you include and adjust as necessary. For costs, make sure they include the same type of sub accounts. For staffing levels, assess the functions and titles and be sure of the work activity, roles and responsibilities that are included.
Not comparing apples to oranges is important, but the bigger risk is the more subtle differences between apples. Accurate comparison is not as easy as it seems, and using averages provided in published benchmarks can result in wrong decisions. You don’t want to compare apples to oranges for sure, but you also don’t want to compare a Golden Delicious with a Macintosh. To get a proper comparison, assess each component and compare things that are the same, making adjustments as necessary to ensure an equal comparison.
If you do your own survey to gather information, whether internal or external, be clear about what information you are looking for and focus on data that will be meaningful. Ask the right questions and build-in the ability to identify unique issues that will affect your comparisons.
While you are at it, expand your survey beyond numbers and include information on process, systems and resourcing, which will tell you more than numbers, giving you more information to analyze and assess.
Benchmarking is just part of a longer process. Once you have gone through the traditional benchmarking exercise, you can move from comparing numbers to assessing procedures, systems and resources. This gives you real information about what needs to change to improve your results.
Traditional benchmarking simply compares numbers, which can be a good starting point if you are comparing the right things. You need to go beyond traditional benchmarking to look at resources, procedures and systems to find out why you are performing well – and should keep doing those things – and why you aren’t performing well – and must change those things.
Compare how you operate with processes, people and systems against other high performing organizations and understand what they do differently. Then, assess whether you can emulate what they do to be successful and implement it. No matter what you think you are doing well, and sometimes even if the benchmarking results indicate you are above average, it’s a mistake to assume you are doing everything you should be doing and doing it well.
There will always be someone else doing something better and you can learn from them – a change in resources, new training, revised proceedures, new initiatives and expertise, technology or systems can all help you improve your results. The key is to figure out what you should change. For this, use benchmarking information,reports, studies, surveys and your own networking to find out how others are doing things.
An important caveat is that the leading practices used by one organization may not be the best for yours. Your organization’s size, priorities, resources and other factors need to be taken into account and your initiative should be customized.
Be prepared to change
Your goal is to find things to improve or change that achieve better results, so expect to implement changes before you even begin. Prepare your organization for the possible outcome, which may include organization changes, business cases for new systems or developing / implementing new processes or activities. These changes often take resources to plan and implement properly, so be ready to develop a strong business case and sell your recommended changes. Your benchmarking and further analysis provide you with the evidence you need.
Benchmarking isn’t just an exercise you do once and forget about it. Continue to measure internally and compare your new results with the benchmark results as well as your own historical results to see how you are trending and to identify and take action if you start to slip.
Periodically re-assess your resources, processes and systems to make sure they are still delivering the best results. Drill down again to see what else to change that will improve results. As necessary, focus on a new area and repeat the process.