The importance of business benchmarking
What I love about benchmarking is that you can compare your performance against others. But what I hate about benchmarking is that you can compare you performance against others..!
You see, that’s the point. Benchmarking is a double edged sword. The very thing that you love about benchmarking can be the very thing that will drive you crazy about it..!
At the core of it, benchmarking is about comparing one performance against another. It has been used by many business owners to improve the performance of their business.
But it’s been used in many other areas as well. And this may be the better way to highlight one of the key issues with benchmarking.
Take cricket, for instance. It’s a long standing record that Don Bradman’s test batting average is 99.94. That’s phenomenal..! But how does it help me?
My batting average was 12. So how does this make me feel? I stand in amazement! But unless I can use his benchmark to help my performance, all I feel is a lesser sportsman, and unworthy.
And that’s the danger with benchmarking in business. A benchmark is a standard of performance, and certainly gives us all something to aim for. However, it can be dangerous to simply state the benchmark without giving any tips, or guidance on how to improve performance.
Having something to aim for is powerful, but it can be debilitating if we are not also shown the way to achieve it.
Effective benchmarking is about establishing a starting point for improvement and then learning from others who are prepared to show the way.
Benchmarking involves sharing information, learning, and adopting best practices to bring about improvements in performance.
With benchmarking, you must compare “like against like”, for instance, large against large, smaller operations against smaller ones, regional against regional. Otherwise the comparisons become meaningless.
So, for business improvement, benchmarking can be very helpful. There is a great saying, “What you can measure you can manage”. Work with this, then take the steps to identify what to do about it.
Peter Knight will be presenting a session on Best Practice Benchmarking at Reckon Group Conference on Friday, 22 August. Get the details and register here