I. BENCHMARKING.
In simple management terms, benchmarking is the best and arguably the easiest
method to initiate change to improve organisational performance. It consists in using the experience, of other organisations. Why re-invent the wheel? Why not seek ideas and practice of others which may help improve productivity or quality? By comparing one’s organisation al methods with those of the most performing in a sector of activity, using similar working processes. The benchmarker can identify practice which leads to better results and adapt them to his own needs.
This concept is probably the oldest. Indeed it has long found a place in common language. It consists in measurement, measurement to prepare working to size or to a standard. Measurement of the task to be performed, be it cutting a material to size where the tradesman marks the required size on the work-bench or in a wider sense, measurement of performance to be improved, both from internal organisation practice and importantly against relevant external performance such as that of competitors activities. So it is certainly the easiest concept to understand. communicate and find adhesion within a performance improvement (change) project.
A quick glance at the table of qualities valued in benchmarking reflects as expected the predominance of percentage the objective qualities: logic and information, (almost total implication-effort rated 90% each) The subjective quality: communication is next in call for resources (50% implication) . Of secondary importance are Ingenuity: introspection and reorganisation and Values: conviction and motivation (30% each) (admit that improvement is necessary and possible objectively and conviction and motivation are of course necessary for any successful project outcome.
Today benchmarking has evolved. Once the precise measurement technique described above, it has evolved into a strategic management method and approach. Rather than or building upon the stricter narrower approach of adoption and imitation now the accent is given to the wider values of adaptation and innovation. The process of development (durable-sustainable) and holistic learning are privileged over the earlier constrained vision of products and markets. Benchmarking is no longer a short-term problem oriented project but a continuous process. In the past, the benchmarks, here, the effective measurements of comparative performance were the most important. Today focus is given to the key factors, processes and activities which lead to optimum performance and achievement. Benchmarking is no longer a punctual project but has become an integral part of the long-term commercial strategy.
Benchmarking is often associated with industrial companies but has now shown itself to be equally useful in non-industrial organisations. The following example is taken from the experience of First Chicago Bank, at the time, the biggest bank in Midwest USA. First Chicago Direction wished to improve their human resources management.
The direction identified ten important areas which could help the bank progress and decided to launch a benchmarking project. During the initial phase, two critical factors to ensure the banks success, were identifie.
2 Critical Factors:
1. Responsibilisation.
2. Autonomous Team Working.
A project team was formed to study all publications on theses two themes.
After intense discussion between team members a list of critical questions, relative to benchmarking, was drawn-up. It included measurement of the team-work in practice and of progress in responsibilisation as well as the results likely to be achieved.
The team rapidly understood that there was little to be learned from the First Chicago itself nor from the rest of the banking industry. Therefore it did not orient it’s research on it’s competitors but instead, turned towards partners who have more to offer in these two fields.
Fourteen companies of which only one was a bank were chosen as benchmarking targets. These partners were contacted individually in order to set-up the indispensable co-operation required for all benchmarking.
Data was gathered from the partners during visits, meetings and telephone conversations. The methods and performances were studied and documented on the basis of the previously determined benchmarking questions. The final analysis was presented to the board in a written report underlining the role of the board in the two critical areas of responsibilisation and team work. The report also treated other points such as; training and support, the key elements for implementation, the importance of compensation and recognition and of the results and risks associated with diverse activities.
Many important lessons were learned from the exercise and several interesting methods were discovered from benchmarking partners. However the First Chicago studies were complex and did not allow the team to find an optimal practice to use within the bank in order to attain the two principle aims: 1. responsibilisation and 2. The setting-up of team practice. On the other hand, 1st Chicago benefited from the experience of it’s benchmark partners in order to choose diverse concepts and techniques amenable for adoption in the context of the commercial objectives and the company culture of the bank.
Good benchmarking follows a point by point approach and names a benchmarking project team which assumes the direction and management of the project. The team is put in charge of; drawing up the outline of the study, finding benchmark partners, observation and documentation of partners work-flow and processes, identification of dysfunctions and of their fundamental causes and of choosing the optimal practices which may be adopted and put into practice within the organisation.
3 points to be remembered in undertaking a benchmark project.
1. Construct a programme which justifies benchmarking as seen from the viewpoint of the board and the principle shareholders, one which meets the overall aims and objectives of the organisation.
2.Guarantee the support of the benchmark study by choosing powerful sponsors, by building a competent team and by ensuring proper training.
3. Support the project throughout it’s duration by presenting it’s successes and it’s evolutions, by maintaining the benchmarking operation’s visibility within the organisation and by recognising and compensating the best efforts of benchmarking.
Six Benchmarking Check-list Questions:
1. Do we know how to draw up the list of products and processes, set them side by side and compare them in a fair and equitable manner?
2. Have we defined the aspects to be compared?
This concept is probably the oldest. Indeed it has long found a place in common language. It consists in measurement, measurement to prepare working to size or to a standard. Measurement of the task to be performed, be it cutting a material to size where the tradesman marks the required size on the work-bench or in a wider sense, measurement of performance to be improved, both from internal organisation practice and importantly against relevant external performance such as that of competitors activities. So it is certainly the easiest concept to understand. communicate and find adhesion within a performance improvement (change) project.
A quick glance at the table of qualities valued in benchmarking reflects as expected the predominance of percentage the objective qualities: logic and information, (almost total implication-effort rated 90% each) The subjective quality: communication is next in call for resources (50% implication) . Of secondary importance are Ingenuity: introspection and reorganisation and Values: conviction and motivation (30% each) (admit that improvement is necessary and possible objectively and conviction and motivation are of course necessary for any successful project outcome.
Today benchmarking has evolved. Once the precise measurement technique described above, it has evolved into a strategic management method and approach. Rather than or building upon the stricter narrower approach of adoption and imitation now the accent is given to the wider values of adaptation and innovation. The process of development (durable-sustainable) and holistic learning are privileged over the earlier constrained vision of products and markets. Benchmarking is no longer a short-term problem oriented project but a continuous process. In the past, the benchmarks, here, the effective measurements of comparative performance were the most important. Today focus is given to the key factors, processes and activities which lead to optimum performance and achievement. Benchmarking is no longer a punctual project but has become an integral part of the long-term commercial strategy.
Benchmarking is often associated with industrial companies but has now shown itself to be equally useful in non-industrial organisations. The following example is taken from the experience of First Chicago Bank, at the time, the biggest bank in Midwest USA. First Chicago Direction wished to improve their human resources management.
The direction identified ten important areas which could help the bank progress and decided to launch a benchmarking project. During the initial phase, two critical factors to ensure the banks success, were identifie.
2 Critical Factors:
1. Responsibilisation.
2. Autonomous Team Working.
A project team was formed to study all publications on theses two themes.
After intense discussion between team members a list of critical questions, relative to benchmarking, was drawn-up. It included measurement of the team-work in practice and of progress in responsibilisation as well as the results likely to be achieved.
The team rapidly understood that there was little to be learned from the First Chicago itself nor from the rest of the banking industry. Therefore it did not orient it’s research on it’s competitors but instead, turned towards partners who have more to offer in these two fields.
Fourteen companies of which only one was a bank were chosen as benchmarking targets. These partners were contacted individually in order to set-up the indispensable co-operation required for all benchmarking.
Data was gathered from the partners during visits, meetings and telephone conversations. The methods and performances were studied and documented on the basis of the previously determined benchmarking questions. The final analysis was presented to the board in a written report underlining the role of the board in the two critical areas of responsibilisation and team work. The report also treated other points such as; training and support, the key elements for implementation, the importance of compensation and recognition and of the results and risks associated with diverse activities.
Many important lessons were learned from the exercise and several interesting methods were discovered from benchmarking partners. However the First Chicago studies were complex and did not allow the team to find an optimal practice to use within the bank in order to attain the two principle aims: 1. responsibilisation and 2. The setting-up of team practice. On the other hand, 1st Chicago benefited from the experience of it’s benchmark partners in order to choose diverse concepts and techniques amenable for adoption in the context of the commercial objectives and the company culture of the bank.
Good benchmarking follows a point by point approach and names a benchmarking project team which assumes the direction and management of the project. The team is put in charge of; drawing up the outline of the study, finding benchmark partners, observation and documentation of partners work-flow and processes, identification of dysfunctions and of their fundamental causes and of choosing the optimal practices which may be adopted and put into practice within the organisation.
3 points to be remembered in undertaking a benchmark project.
1. Construct a programme which justifies benchmarking as seen from the viewpoint of the board and the principle shareholders, one which meets the overall aims and objectives of the organisation.
2.Guarantee the support of the benchmark study by choosing powerful sponsors, by building a competent team and by ensuring proper training.
3. Support the project throughout it’s duration by presenting it’s successes and it’s evolutions, by maintaining the benchmarking operation’s visibility within the organisation and by recognising and compensating the best efforts of benchmarking.
Six Benchmarking Check-list Questions:
1. Do we know how to draw up the list of products and processes, set them side by side and compare them in a fair and equitable manner?
2. Have we defined the aspects to be compared?
3. Are we certain that we are carrying out comparisons at equivalent and adequate levels?
4. Do we know how to and where to find the critical information which we require that is
capable of distinguishing that which is specific and essential in other organisations and of applying it to our own case.
6. Have we examined each optimal practice identified in order to check if it truly is applicable to our case.
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