Reinventing wheels is a curse that most managers are afflicted with. Therefore, you probably like the idea of finding out what other managers are doing to solve similar problems. But you have not been able to find articles in your favorite trade journals that have helped. Your competitors are not going to help you. You have struggled along on your own or have hired expensive consultants.
So, what else can you do?
You may have heard or read about "benchmarking," which can help you compare your processes to those of "best in class" organizations and set world class performance targets. Like many popular management tools of the past, benchmarking is not a panacea. But, it may help you solve those nagging problems, help you develop superior performance, and achieve quantum leap improvements in your processes.
Benchmarking is the process of employee teams identifying and investigating organizations who perform similar activities that you do, but are not necessarily in the same business, or even in the same industry. Benchmarkers compare data, discover enablers of superior performance, and help adopt or adapt some of the partners’ best processes, practices, techniques, and technology breakthroughs.
If benchmarking works well for you, it can even develop into a corporate lifestyle of "partnering" with other organizations to avoid spending a lot of time and money testing different process technologies and approaches. Benchmarking can help you understand how other organizations have used them to their advantage. Most importantly, it can help you improve your probability of success through better understanding of your customer needs and industry or competitor practices.
This article should help you decide if benchmarking is a tool you want to try. It outlines its investments, risks, pitfalls, and potential benefits.
The Benchmarking Process Steps are:
(1) Decide what to benchmark.
(2) Select and train your team.
(3) Define team responsibilities & ground rules.
(4) Study your process.
(5) Prepare a questionnaire & performance indicator requirements to provide answers about your organization.
(6) Research, identify, and visit best in class partners.
(7) Analyze their information.
(8) Develop a plan to improve.
(9) Implement and monitor the change plan.
(10) Activate continuous improvement procedures & publicize the results.
In successful benchmarking, you select projects by considering business conditions, market drivers, relationships to other projects, and to potential effects on your organization. You must select the right mix of team personnel, sponsors, advisors, reviewers, approvers, project managers, business function representatives, facilitators, analysts, and technical and administrative support. You must also provide teams with needed resources, including the best tools, facilities, methods, and continued and proactive interest, encouragement, recognition and other needed support. If you skimp on or ignore many of these investments, your chances for quantum improvements will greatly diminish.
Benchmarking can develop best productivity measures, define the best customer requirements, take a reality check on long-range plans and strategies, and make improvement strategy recommendations which can be leveraged across the entire organization to multiply the benefits. It can also help overcome resistance to change or the feeling of "we’re different because.. or we can’t do that because.. or we tried that.. or the boss won’t buy that..."
Benchmarking can alter practices that otherwise only change by edict. Immediate benefits can be achieved before project conclusion, such as: cross-pollinating ideas, expanding resource networks, improving morale, and helping to change corporate focus. Benchmarking can even help justify existing practices and resources; proving to management that a really good job is being done.
Now that you have a basic idea of what benchmarking is, you also need to understand what it is not. Benchmarking is not "industrial tourism" where you visit other places without specific purpose. It is not a cookbook that just takes reading and mixing in a few success ingredients; but it does provide structures to follow to ensure thorough and accurate investigation -- with a common language for customer-focused implementation. It is not a fad that is done once and then set aside to collect dust. Nor is it a technique that dismisses creativity. It is a stimulus to already creative employees. Benchmarking can be successful if "not invented here" and empire building barriers are replaced by "legal stealing" of ideas and practices.
Like everything else, benchmarking has its downsides. It takes a lot of time, energy, resources, and risk. It takes your most valued employees away from their normal duties. It forces exposure of inefficiencies which should result in major corporate changes and upheavals. Even if a study does not yield tangible improvements, which is possible, at least you know where you stand against your competition so you can take appropriate actions. Initial studies may take a while to get going and studies may take many months. But, if you do it right and keep on doing it right, the benefits can vastly exceed your expectations.
Benchmarking Personnel Selection and Roles
When initiating a benchmarking project, you should identify and involve all of the key functional and informational "process owners" who may be affected by a study or its changes. They should have process knowledge, power to act on the process and leadership roles, and understand the corporate strategic plan. Your challenge is to set the tone of impatience for the status quo of your most important processes.
Next, select a Benchmarking Steering Committee and a "Benchmarking Champion" from the Process Owners. The Champion’s role is to launch benchmarking teams, assure top-level support and enterprise-wide acceptance of process redesign, share the progress and results, energize the organization, and be a sounding board for the team. Bold changes may eliminate processes and create new ones, so they have to be well orchestrated. Otherwise, other employees and managers may interfere with the proposed plan. In order to change your corporate culture to embrace a partnering lifestyle, executive leadership is essential.
Team leaders should have good verbal and writing skills, know how to facilitate meetings, be able to work well with mid-level and senior managers, and have commitment, enthusiasm and training in the process. This individual should also have the knowledge and confidence to lead the team through uncharted waters. The team leader does not have to be a current supervisor. Team leaders are usually responsible for making work assignments, planning meeting agendas, scheduling and conducting meetings. They should maintain communication with members and their supervisors, the benchmarking champion and other top managers to keep them advised on progress and on situations that need resolution. Leaders must evaluate actions of other internal and external organizations, as well as personal agendas of those involved. They must form, tailor, and revise team composition to reduce conflict with other activities and situations. They might also be asked to schedule trips and budget for partner visits.
You should keep team sizes small. Teams ideally consist of three or four broad based trades people or subject matter experts, one or two functional representatives or managers, and a facilitator or team leader. Initial planning meetings can involve many key people to identify problems, opportunities, and risks. Such participation builds the wide understanding, commitment and support needed by benchmarking.
Benchmarking is a "best of the best" operation, so pick your best team members. The right mix of skill, experience, and personal characteristics is critical. Assigning your best people sends a strong message about the importance of the project. Team members should be picked based on ability and motivation rather than operational convenience or availability, although you must weigh the resources which may be temporarily lost to the organization during project work times. To assure ongoing support and to facilitate recommended changes, you should include functional leaders on permanent teams.
Occasionally, specialists or other workers may be added to the team for short time periods to provide special expertise (e.g., computer, purchasing, shipping, or communications skills) or additional resources. Be careful here. These individuals sometimes lack their supervisor’s support and are often torn between team assignments and regular job workloads.
Volunteers are preferable, but if you must appoint team members, it is best that "drafted" individuals are really ready, willing and able to commit time, effort, and support for the project duration. They should also be enthusiastic and not likely to be too preoccupied or interrupted by normal work load requirements. Once assigned, try not to remove someone from the team without full team concurrence. Team members quickly come to rely on one another. Losing valued members may severely disrupt team progress or make teams feel that management is not interested enough in their project or creative talents.
Make sure you have both leaders and doers on your teams to share the workload. Do not assign all of the "hard parts" only to the team leader, facilitator, or key process owners. There is too much to be done. If only a few of the members shoulder all of the major duties outside of sitting in meetings, very little good will come from their participation. Team leaders who "expect" that team members cannot perform critical duties, such as preparing written definitions, flow charts, questionnaire sections, and researching and contacting prospective partners will have trouble achieving desired results. Team members must be given regular assignments, and must be expected to accomplish them by an agreed upon time. Replacing or fining team members should be considered for non-performers. Teams should adopt Benchmarking Meeting Ground Rules to make the best use of available time and resources.
Try to select Total Quality Management (TQM) oriented or experienced individuals to be team members. Benchmarking can be a new and exciting way of using TQM in your organization. You may have tried it before and failed, let it get stale, or did not structure it to measure progress. Benchmarking can offer TQM a new framework for cultural and process changes. It can be used to achieve new levels of employee involvement and empowerment by replacing antagonistic relationships with cooperation and partnership -- based on an intimate look at how other top organizations operate, and providing a new example for much higher levels of performance for your organization.
Benchmarking also allows workers to explore, offer, and try new methods -- based on observed and proven successes by your benchmarking partners. It also helps make exciting improvements in quality, cost, speed, and service. While TQM concentrates on making small but continual incremental improvements that leave basic structures in place, benchmarking helps to make quantum productivity gains by getting rid of old ideas and old ways of doing things, and replacing them with whole new technologies.
Support for the Benchmarking Process
In the preceding paragraphs, the word "support" has been used repeatedly for good reason. Teams made up of workers are not normally used to doing the kinds of things at work that benchmarking asks of them. Therefore, your involvement, oversight, and resources are extremely important for team success. This includes providing benchmarking books, quality journals, online data sources, conferences and financial information. Clerical, administrative, budgetary, travel, training, legal, and MIS support are needed, as are communications such as phone, fax, computer, and Internet. Teams also need dedicated or regularly available workspace for team meetings, including conference and breakout rooms and office equipment.
Strong team leadership and facilitation support is also needed. If journey level workers do not have the skills, a management analyst or a TQM coordinator or a professional facilitator could be made leader. If professional consulting and training is needed (recommended for benchmarking novices), you should find and select the best of the best consultants who are experienced benchmarkers. Not all management consultants are qualified to advise you in benchmarking, so be careful in checking references.
You should tailor training courses appropriate for your specific needs in benchmarking basics, team dynamics, paradigm shifting, change managing and other areas. Teams and managers should be provided intensive training courses and executive overviews. Teams should receive skills training and resource materials on a just-in-time basis to help them prepare for different duties as the study evolves.
Money and time will be needed for training, tools, facilitation, and freeing employees from their regular jobs. You may consider establishing separate accounting numbers to capture the labor and travel costs associated with each project. Over the course of a project, Project Allocations information may help supervisors better plan job accomplishment within their work center.
The supervisors of assigned team members may need to be continually reminded that their subordinates are on high priority projects. These projects should take precedence over the assignment of normal work load duties, including when team members have tasks to complete before the next meeting. Team leaders should schedule meetings at the same time, place, and frequency to ease supervisors’ work load planning burdens. Teams usually meet weekly, but may periodically have several short meetings per week or longer sessions. As projects near completion, teams visit partners in the local area or traveling to distant sites. This will keep workers away from their normal site for one or more days at a time over a period of several weeks. Team members should try to minimize time conflicts, but always keep their supervisors advised of team activities and changing schedules. You may later want to try some full-time teams.
One more support is your freeing teams from having to give fancy management briefs or weekly updates. Teams should keep managers informed informally, as they develop recommendations and realize results.
Benchmarking Project Selection
You should evaluate your proposed benchmarking projects by focusing on critical process segments in terms of customer interfaces, perceived inefficiencies, and unmet requirements. You should prioritize your project candidates according to highest cost percentages, greatest customer or employee impacts, most opportunities for quality improvements, shortest improvement or payback periods, least invest-ments, or most rapidly changing technologies. Then perform the gap analysis to focus on critical benefits.
As a manager, avoid setting too many of your team’s goals, constraints, or project scopes. Managers and supervisors should get involved, but not too involved. Stay informed, but not to the detriment of getting real work accomplished. Try not to let other managers or corporate groups decide exact topics or scopes unless they have very specific inefficiencies identified. Nor should you dictate who the partners or what the solutions will be. Otherwise, formal benchmarking is not needed -- just implementation planning.
By now, you may be thinking about geographically separated components of your organization beginning a corporate benchmarking project at the same time on the same process. Don’t do it. You will probably be better off if several local teams work independently on sub-processes within a process. The result should give a greater sense of ownership as each site. They can be solely responsible and take credit for uncovering the best means to improve the process they examined. In our initial effort, we formed teams in several locations to study the same function. This proved to be cumbersome, time consuming and too expensive to coordinate, communicate, and schedule. Common trainers and team facilitators provided economies. Periodically, and at the conclusion of multi-site studies, teams met to share processes, progress and methodologies, and to synthesize sub-processes recommendations into the whole process.
Start with simple goals, plans, and processes. As goals are set and met, processes are charted, and problems are recognized, wait to refine them later.
Use KISS: Keep It Simple & Succeed.
Letting a team get bogged down in details or preparing briefings instead of "real work" during early project stages (or even later) can kill a team’s interest, momentum and productivity. When setting goals and charting processes, do not try to solve problems at the same time. First just lay out the "as is" model. Wait until later to work on the "to be" model, which will incorporate improvements discovered from benchmarking. Trying to improve the process at the beginning, before benchmarking with partners is like pumping a well without first priming it -- it takes a lot of work and nothing much comes from it.
Benchmarking Project Development and Internal Benchmarking
Teams should begin projects by developing visions, missions, goals and objectives, plans of action, milestones, timelines, meeting agendas, ground rules, process flow charts and vocabulary definitions. Internal benchmarking is done as teams then determine whether inefficiencies are process or management caused and whether different functions do the same things using the same methods and procedures. They can also study corporate motivations, reward systems and cultures.
Teams also determine data and "metrics" requirements, availability & reliability. Benchmarking is the understanding of methods and metrics or measurements. Most managers like to start with quantitative targets to quickly determine how good (or bad) they are doing. Benchmarking studies industry practices first. Once practices are fully understood, their credibility can be increased by use of metrics. Metrics can help force the search for the best methods and determine why they are the best. Teams should determine data requirements and availability early and begin collecting data before making changes. This provides baselines for comparing results and claiming improvements. Benchmarking usually requires more operational data than many financial systems provide, so different measures may be needed. Without measurement, nothing much usually happens except a lot of time and money is spent.
Questionnaires can help you understand the complete package of a partners’ key success factors, so that you can better implement changes that are right for you. These points become clearer as you compare the gaps between your answers and theirs. The questionnaire package is the team’s key document. It should be developed with a professional appearance, clarity, format, style, graphics, and charts. The team should develop specific and well-worded questions that will elicit ideas pertinent to the objectives.
Questions can be open-ended (unstructured) or closed-ended (forced-choice) with possible answers and ranges. Closed-end questions take more time to develop than open-ended ones, but they work better in most cases. Carefully test questions internally before sending them to external partners. Have detailed answers and backup data about your organization and processes before asking partners for theirs. Revision of the questions for each partner organization before and after each visit may be appropriate as some ideas are solidified and others are deemed irrelevant.
Good flow charts can demonstrate a sense of urgency for improvement based on apparent flaws. Use the process flow when starting to prepare the formal questionnaire. Determine from flow analysis what you feel you do well and what you feel you do not do well. Then, do not waste a lot of time asking questions about the many things that you do well. Spend most of your time asking about the most frustrating and critical things about your process -- things about which you would like to know more about how someone else handled successfully. Include some non-process issues such as communication, training, incentives, and recognition. Verify the value and quality of the questionnaire by answering how your organization does those things, or gets around doing, badly or not. Try to be honest about your answers, even if they do not cast a cheery light on your process or organization.
During interviews, use the questionnaire to help partners follow and understand your visit requirements, but stay flexible. Have the team expert on a subject lead the asking of that set of questions. During visits you will make commitments about supplying data and other information--deliver everything, and on time.
Benchmarking can be formal or informal. Although "proper" benchmarking is a formal process with clear guidelines and steps, informal contacts may provide important results. Managers or workers with an idea or a problem can contact another internal or external organization to compare notes. This could be as simple as a quick phone call to a friend or acquaintance it another site or at a local firm. Once formal benchmarking is fully understood, informal steps can shorten paths to quantum productivity improve-ments. But, do not take too many shortcuts. There are swamps and chasms that can hurt the careless.
Benchmarking can be internal or external. "Proper" benchmarking is external, since you are already supposed to know what is happening in other parts of your own organization. But, just in case you do not, internal benchmarking can be beneficial by getting similar functions on the best track. Internal benchmarking can help determine, share, and incorporate the best current practices throughout your organization, especially if the organization is already successful.
If less successful than competitors or similar businesses, and before spending a lot of valuable time and resources making changes, check out the competition through external benchmarking. It is not wrong to make interim changes after flow charting and before benchmarking, but be judicious in resource allocation for such changes.
The first step in External Benchmarking is determining prospective partner types, categories,and locations. The team evaluates the significance of similar processes, industries, products, and services; types of personnel, geographic and other issues.
As teams perform visits, tours, interviews, and other meetings, they should follow agreed upon Benchmarking Visit Ground Rules.
