Prerequisites to Benchmarking

Before getting involved in benchmarking, an organization should check the prerequisites—those philosophical and at- titudinal mind-sets, skills, and necessary preliminary tasks that must precede any benchmarking efforts.

1. Will and Commitment

Without the will and commitment to benchmark, an orga­nization cannot proceed. Don’t waste time or the time of a benchmarking partner in the absence of a commitment and a will to benchmark on the part of the company’s top management.

2. Vision and Strategic Objective Link

Benchmarking requires a strong focus, or it can go off in numerous different directions as benchmarkers get carried away in their enthusiasm. Before benchmarking is started, its objectives must be linked to the company’s vision and strate­gic objectives, providing specific direction and focus for the effort. Failure to do this will almost certainly result in wasted resources and frustration.

3. Goal to Become the Best – Not Simply Improved

Nothing is wrong with incremental improvement—unless current performance is far below world class. If an orga­nization is not near the world-class level, incremental im­provement may only ensure that it remains inferior to the best-in-class forever. Benchmarking requires that the goal be to leap to the head of the field in one radical change, not just to be a few percentage points better than last year.

4. Openness to New Ideas

If a company is imbued with the “Not-invented-here” Syndrome, it will have a problem with benchmarking. The chief symptom of that affliction is a shortsighted mind-set that is characterized by a reluctance to consider other ways of doing things. Although few will admit it, many people are reluctant to consider ideas or approaches that are not their own. Organizations can be like individuals in this re­gard. Because the essence of benchmarking is capitalizing on the work and ideas of others, a company must be open to new ideas for benchmarking to provide any value. The benchmarking process may help bring about more recep­tivity to new ideas by demonstrating that they really work.

5. Identifying Key Business Processes

Since the organization must devote significant capital and human resources to any benchmarking initiative, it is impor­tant that the effort makes a difference and pays dividends. That will only happen if the processes selected for bench­marking activity are those considered to be among your key business processes. Therefore, it is essential that those processes that are critical to your mission be identified. Key business processes are defined as those having maximum impact on the success of the organization. They enable the organization to produce its products or services, effectively monitor the organization’s performance, and establish its objectives and plans for the future. Organizations usually have 10 to 15 key business processes. Identifying them is best done by the organization in brainstorming sessions employ­ing the following four steps:

1. Identify the organizations’ Critical Success Factors (CSFs). These are the handful of characteristics, func­tions, capabilities, or limitations that are critical to the success and viability of the organization.
2. Identify the metrics for measuring CSFs. These metrics are called Key Performance Indicators (KPIs), and may include production output and sales data, and support­ing management performance data.
3. Identify the processes that drive the CSFs. There will typically be 15 or more processes in this category.
4. Some of these processes may be grouped together, and others ungrouped (if they are completely inde­pendent of each other). These are your key business processes. It is from the list of key business pro­cesses that you will select your candidates for process benchmarking.

6. Understanding of Existing Processes, Products, Services, Practices, and Customer Needs

It is mandatory that an organization thoroughly under­stand its own processes, products, services, and practices and the requirements of its customers so that it can de­termine what needs to be benchmarked. In addition, it is necessary to have a solid understanding of your process in order to make meaningful measurements against that of the partner.

7. Processes Documented

It is not enough to understand the processes; they must be completely documented, for three reasons:

• All people associated with the process should have a com­mon understanding of it, and that can come only from documentation.
• A documented starting point is needed against which to measure performance improvement after benchmarking changes have been implemented.
• Your organization will be dealing with people (the part­ners) who are not familiar with your processes. Process documentation will help the partner understand your or­ganization’s processes. With an understanding of where the benchmarking organization is, the partner will be bet­ter able to help.

8. Process Analysis Skills

To achieve an understanding of your own processes, prod­ucts, and services and to document those processes, you must have people with the skills to characterize and docu­ment processes. These same people will be needed to ana­lyze the benchmarking partners’ processes and to help adapt those processes to the organization’s needs. Ideally, they should be employees, but it is possible to use consultants in this role.

9. Research, Communication, and Team-Building Skills

Additional skills required include research, communication, and team building. Research is required to identify the best- in-class process owners. Communication and team building are required to carry out the benchmarking both on an inter­nal basis and with the partners.

Source: Goetsch David L., Davis Stanley B. (2016), Quality Management for organizational excellence introduction to total Quality, Pearson; 8th edition.