Business Benchmarking

Synopsis

You're already successful — but how do you get better? Compare yourself to a top performer or industry leader, and from there, examine your current performance and find areas that can be improved. Measure and evaluate your ongoing processes and strategies with our Business Benchmarking presentation. Use benchmarking to brainstorm better implementations, inspire possibilities for improvements, and develop opportunities for future growth.

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Slide highlights

Compare the direct and indirect advantages of benchmarking. And use the knowledge to assess whether benchmarking could be a useful practice for your business. (Slide 5)

A benchmarking timeline allows you to plot activities to benchmark, their duration, and progress across an editable timeframe. (Slide 7)

Use a table to display key results from your benchmarking. Analyze how these results can be translated into key findings. And identify actionable items to act upon immediately or in the long run. (Slide 14)

Outcome

Benchmarking is more than just identifying gaps in performance and strategies to stay competitive. More importantly, it is not just a "one-time deal" – procedures are continuously examined and analyzed to deliver improved performances. So use benchmarking to seek out the best possible implementation at different stages of your business.

Application

Introduction

The simplest form of benchmarking compares yourself to an industry leader and its most outstanding capabilities. This diagram visualizes that concept: the transparent part of the "our company" sphere implies capabilities that we're missing out on. The top portion of the "leading company" sphere represents the improvement potential that can be incorporated into your own organization's practices. (Slide 2)

Prior to benchmarking, you might be a disconnected, directionless starting point. And your position inside the competitive range is not clearly defined. Benchmarking doesn't mean you need the best of every business practice to succeed, but you should have an idea of your focus areas and priorities. As we can see, on the other hand, benchmarking allows you to measure process, product, and performance to reach development objectives. (Slide 3)

As mentioned earlier, benchmarking is a continuous process. Steady, continuous improvement can lead to a breakthrough moment, which then leads to yet another phase of continuous improvement. The breakthrough moment usually comes after you've successfully implemented improved practices from benchmarking. These internal learnings create a positive impact on the larger organization and can often lead to better performance all around. (Slide 3)

Benchmarking types

There are different types of benchmarking you can undertake. The common ones involve business processes, products, strategies, and/or performance. To benchmark performance, use quantitative data like metrics and KPIs. To benchmark strategy and processes, use qualitative data on people and resources. Another way to break down benchmarking types is by internal vs. external. Here, we've listed some examples for each. Internal benchmarking typically looks within the organization, whereas external benchmarking examines the organization's position on a more macro level (Slide 6)

Benchmarking process

The benchmarking process can be roughly be divided into planning, analysis, and action. Again, these stages are presented in a circular fashion because they make up a continuous cycle. Within each of these three stages, we can add smaller action items. For example: during planning, we want to define the process first, and identify the resources and partners that we need to conduct the analysis. (Slide 8)[/italic]

A process evaluation table compares your organization against competitors across the activities that matter most to you. The left-hand column lists key benchmarking areas, or success factor. On the right, plot where you and the competitor stand, from bad to good. As it appears that in this example, this competitor averages slightly ahead in most areas. (Slide 9)[/italic]

Comparison

You can also compare critical success factors across various perspectives. For instance, how does a specific product, process, or strategy influence customer satisfaction? What about compared to a competitor? (Slide 10)

Your benchmarking will lead to many findings – some more important than others. Before you dive into these findings, here are some criteria to evaluate if these comparison results actually matter. Ideally, all six sample areas should be pointing up to show that the result should be taken into account. For example: if our goal is to compare historical year-to-year revenue growth, but our findings only show data from one year, then the information isn't enough to paint a full picture. And the first criteria would not be passed in this case. (Slide 13)

Evaluation and summary

Use a performance evaluation summary to document the key findings from your benchmark. For example, a sales evaluation summary could focus on profit maximizers, profit gainers, pursuers, and growth maximizers. On the left-hand side, highlight the scores for each of these four areas. On the right-hand side, these editable graphs showcase the data in question. (Slide 15)

Finally, we get to the post-benchmarking process and set the stage for continuous improvement. Document your key findings and solidify your next actions to keep up the continual improvement process of benchmarking. Define your key improvement areas, communicate results to your team, and educate employees to improve internally. Then, build a network of partners and allies to achieve mutually beneficial external improvement and growth. (Slide 16)