The benefits of benchmarking your company data
You are back in the classroom at secondary school with your test result. You got 88% and wow you are feeling good! What is it you did next? More often than not you would have leant over to your friend and asked them their score. Right?
From here it could have gone one of two ways. Either your score is higher or lower and that glorious feeling of triumph stays or is replaced with a less than positive feeling.
Benchmarking was recognized by the corporate world in the 1970s – but we all did it at school before we even knew it had a name, because it is instinctive.
So, you didn’t get the highest score and the teacher reminds you as you sulk out of the classroom that ‘mistakes are your friend’. You disagree, yet your teacher was right. As you mull over your test, later on that day, you get a much better idea of what you understand and what you don’t. What questions you should have answered quicker so you had more time on the more complicated ones, therefore reducing the risk of making silly mistakes and losing precious marks. You then, secretly, make a promise to yourself to get a better score than your friend next time! Your friend, on the other hand, who got top marks, has gone home feeling smug and decides to treat themselves to a chocolate bar and watch both home and away AND neighbours!
Within these joyful memories of school life lies the positives and negatives of modern day benchmarking within business.
The negatives can be when a company outperforms a benchmark and becomes complacent regardless of possible improvements. However, thankfully benchmarking is not just a score of how you are doing against your competitors, it allows your company to identify the opportunities that lie within your business based on real data. It gives a strong visual representation of what is working and helps to promote discussions regarding new ideas as well as to create enthusiasm to ‘do better next time’ by enabling realistic and achievable targets. But most importantly as your competitors learn new efficient practices creating leaner businesses, benchmarking can promote a mindset within your business of continuous improvement which is needed to prosper with those ever changing goals posts.
It must be said that perhaps this memory of school is just my own and when you got your test result you didn’t bother to see where about you came in your class and just ran out as quickly as you could read here. Interestingly if that is so, you are not alone, research by LNS1 showed that well over half of the companies that participated in their study have yet to carry out any benchmarking. Seems silly though, after all if you don’t measure it you can’t manage it and so if you measure it why not benchmark it!
Happy benchmarking
