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Learning from others is how we all improve.
Organizations use benchmarking to compare themselves to others and learn.
What Is Benchmarking In Business?
Benchmarking is the process of going outside an organization to look at how high performers are doing things in other industries.
The concept is to identify and learn from best practices.
Organizations use benchmarking as part of their Quality Management System to gain insight into ways to improve their work.
Successful organizations understand that learning from what others do is a valuable resource for targeted improvement.
What Are 4 Types Of Benchmarking
There are different ways you can use benchmarking.
Internal Benchmarking is when you compare best practices within an organization. This type of benchmarking is typically used in large organizations that can compare internal processes that might be more efficient. For instance, a hospital might compare best practices in how patients are treated for the same health condition.
External Benchmarking is when you compare best practices outside the organization. This type of benchmarking is used when you are trying to learn how to improve how you do what you do. For instance, a health system may look at the hospitality industry to learn best practices on customer service.
Performance Benchmarking is when the organization looks at its internal data and compares it over time to see if there are improvements in data. For instance, a hotel may look at customer satisfaction scores and look for movement for improvement.
Operational Benchmark is when an organization looks at how work gets done through internal processes. For instance, a hospital may create a process flow to study the patient admission process from entering the facility through the patient care experience.
7 Tips for Benchmarking Efforts
1. Identify What Area Needs Improving
Use your critical success factors as a guide to help you identify areas to improve and focus on those areas that are not performing as well as you had hoped.
This will help you target specific areas in your organization that need improving.
Make sure you consider factors like cost, quality, and service when you are targeting improvement.
For instance, if you operate a call center, benchmark hold times, or abandoned rates from like organizations to see if they have tips or tricks to improve your times.
2. Look for High Performing Organizations
Look for organizations that perform well in this area. Use professional contacts and networking to find the right organizations.
LinkedIn is a great place to do this kind of networking.
Going outside your industry can shed light on how you do things compared to how other industries tackle the same problem.
For instance, healthcare has improved many processes by learning from the hospitality, manufacturing, and airline industries.
3. Contact the Organization
Be professional in your communications, and don’t pressure the organization to share data.
Many organizations have a process for sharing benchmark data and are happy to share, especially in areas where they perform well.
They are proud of what they do and are happy to share with others.
However, not all organizations are comfortable sharing performance data, so be sensitive to this if you get resistance to the request.
Make contacting you as easy as possible and if you miss a call, be courteous and respond quickly.
4. Collect and Analyze Data
Be prepared with your questions and the specific data you are looking for.
Make sure that when you collect data, you are comparing apples to apples and if oranges are in the mix, take differences into consideration when applying the information to your own organization.
For example, if you are requesting benchmark information for maintenance staff, make sure that the square footage and the number of hours of operation are the same.
The maintenance needs of a hospital would be very different from the maintenance needs of an insurance office.
The goal is to learn what’s working for other organizations and bring tips back to implement in your organization.
5. Develop A Performance Improvement Plan
Once you analyze the data gathered, you will have a better understanding of where you are as an organization as compared to where you would like to be.
Use this information to develop a performance improvement plan to get you there.
Identify staff to help implement the plan and manage the performance of employees to achieve those goals.
6. Implement the Plan
Implement the plan and be sure that is incorporated into organizational goals, so there is assigned accountability for getting things done.
Some plans are lengthy, so be sure to allow adequate time to implement them.
Be sensitive to this and use SMART goals to ensure they are achievable.
For example, improving customer satisfaction scores takes time and can’t be done overnight.
Try not to discourage employees by forcing unrealistic goals and timelines.
7. Check for Improvements
Once the plan is implemented, go back, and see if improvements are shown in the data.
This is where FOCUS PDCA comes in to close the loop.
Benchmarking Efforts Are Part Of Management
Once you have relationships with organizations that share data, it can be a valuable way to keep your organization moving forward and constantly striving to improve what you do.
There are also professional benchmarking organizations you can join and share data within your industry.
Networking at professional conferences is also a good way to identify these organizations.
It’s amazing what we can learn from others if we just take the time to ask.
Benchmarking is a great way to find those best practices that will help your organization improve!
Do you have any examples of benchmarking projects that helped your organization improve?