Benchmarking: Where are You? Where do You Want to Be? How do You get “There”?
Benchmarking. An overused term, or a label of accountability? In a time when each of us is expected to do more with less, it is no longer adequate to look at numbers as benchmarks. Boards, stockholders, and funders are asking for more comprehensive measures. We now must provide evidence of our own professional value, the value of the work we do, and the value of our employees.
So, what do you use as benchmarks? How can you determine reliable benchmarks? The following are the thoughts of some successful managers on the subject of benchmarks:
“SCE believes that continuous enhancement of business operations is a key to building shareholder value and delivering high value customer service. We utilize benchmarking and best practice research in many areas of the company to gauge our performance against industry leaders, and to identify areas we can improve. Benchmarking against peers and best-practice companies is an excellent tool. Our benchmarking is specific to business units and processes as we find this the best way to extract value from the benchmarking process. Examples of benchmarking include call center operations, consumer complaint handling, and compensation planning.” Suzanne Middelburg, Director of Consumer Affairs & Customer Satisfaction, Southern California Edison
“I believe strongly in benchmarking. Every organization benefits from having good competitors. We benchmark against institutions whom we admire and whom we believe have comparable values. We also compare our accomplishments and progress with the goals we have set for ourselves. Those who do not benchmark appropriately effectively isolate themselves from reality.” Clifford E. Brubaker, Ph.D., Professor and Dean, School of Health and Rehabilitation Sciences, University of Pittsburgh
“Benchmarking: As a novice fundraiser, I find benchmarking a powerful tool to develop a perspective on the competition, identify the competition and integrate incremental improvements in our fundraising and development strategies. We look at non-profits and for-profit agencies, large and small, new and mature and capture the best concepts for our agency. We look at their documents and observe their delivery (for results). We interview them informally. However, in the end, our culture is the driving force in the selection of strategies. What works for some may not work for us. Our strategy is driven by Demming’s philosophy- steal shamelessly -but focus on both incremental and bold innovations- be ever alert to ways to make continued improvements for the client and customer.” Joseph Lagana, Ed.D., Founder & CEO, Homeless Children’s Education Fund
“I use benchmarking cautiously. Statistical benchmarking is certainly one way to build perspective around the decision at hand, but the blended averages of others’ decisions is no substitute for business intuition or the best ideas from the smartest people you can find. ” Marshall Wunderlich, Vice President, The HDH Group
“I am an administrator with a Commonwealth agency, one of 15 district offices throughout Pennsylvania that provides vocational rehab services enabling people with disabilities to be employed. We compare our outcome measurements among the 15 district offices in many various categories as benchmarks. We also compare our outcome measurements to other states as well.” Donald G. Angelone, Administrator, Office of Vocational Rehabilitation
“As a business, we benchmark our success against industry averages in terms of revenues, selling margin, operating expense, and compensation. Understanding how others manage their business and set expectations helps us by adding perspective. Although we never want to settle, we also don’t want to set unrealistic expectations for the business or our people.” Michael O’Toole, Sales Manager, Comdoc, Inc.
“We benchmark our success, among other things, on our customers’ expectations. We do not feel we have met the mark if our customer is ‘satisfied’ with our service. We do feel we have met the mark if our customer expresses delight, takes pride and ownership of the products we have provided, and refers us to the companies with whom they do business.” Susan E. Gove, Ph.D., CEO, Gove Group, Inc.
5 Tips About Benchmarking
- Be selective. Choose only a few very meaningful items/issues to benchmark. When these have been reached successfully, consider moving on to benchmark a few more items/issues. Do not overwhelm the organization with too many benchmarks at once.
- Research carefully. Benchmarks should be set in relationship to the products / services provided by other organizations. Benchmarking yourself against yourself will likely not produce the optimal mark.
- Expand your vision. Invite people from outside of your work area to join in the benchmarking process. Give your benchmarking a fresh set of eyes.
- Be realistic. Set benchmarks that will cause you to reach, but that are attainable. Unrealistic goals will often cause everyone to give up before getting started.
- Analyze regularly. Short-term benchmarks enable an organization
- to experience success in a relatively short period of time.
- to identify problems before too long of a period has passed.
- to keep up with the fast changing world of today by setting new benchmarks on a regular basis.