Management plays a crucial role in the benchmarking process. In fact, without the approval and commitment of top management, benchmarking is not possible. Benchmarking is not something that can occur from the grassroots up without management’s direct involvement. Several benchmarking considerations require management’s approval before the process can start: commitment to change, funding, human resources, disclosure, and involvement.
1. Commitment to Change
Benchmarking is a serious undertaking for both benchmarking partners. Unless a firm commitment to change exists— unless the organization fully intends to radically improve its processes to come up to best-in-class standards—bench- marking should not be considered. Unfortunately, too many companies jump into benchmarking without that commitment, with the result that money and personnel are wasted by both parties. In addition, the hopes and expectations of employees are raised, only to be disappointed when nothing comes of it. To obtain any real benefit from benchmarking, an organization must resolve that when a best-in-class process is found, it will do what is necessary to incorporate it as a replacement (or radical improvement) model for its inferior process. That, after all, is what benchmarking is about.
Only management can authorize the expenditure of funds for benchmarking. These funds will support travel for teams visiting the organizations with best-in-class processes. Teams are usually composed of five to eight people. Visits may last from two days to two weeks. Travel destinations are inflexible, dictated by the location of the best-in-class firms. Clearly, travel expenses can be high. Management must make the funds available if benchmarking is to be carried out.
3. Human Resources
In similar fashion to funding, management must make the necessary human resources available for the benchmarking tasks. Although the costs for the human resources are usually far higher than for travel, the availability of personnel is seldom an issue except for the target company.
It may not be immediately obvious, but both companies— the benchmarker and the target—disclose information about their processes and practices. Management may be understandably hesitant to disclose such information to competitors, but what about the case of the noncompetitor benchmarking partner? Even there, management may be reluctant because there can be no ironclad guarantee that information divulged to a noncompetitor will not find its way to the competition. The other side of the coin is that few processes or practices remain secret very long anyway. But if the organization has some unique process that gives it a competitive advantage, the process should be treated as proprietary and not be subjected to benchmarking. In any event, only management can make the decision to disclose information.
Management must be actively and visibly involved in every aspect of the benchmarking process. Management should be involved in determining which processes are to be benchmarked and selecting benchmarking partner candidates. Management is in a unique position to establish the communication channels between the companies because top managers tend to affiliate through professional organizations. Dialogue among top-level managers should be encouraged.
It is important for management to stay abreast of benchmarking events and to make certain that the effort supports the objectives and vision of the company. Management’s ability to do this is greatly enhanced when it is directly involved. In addition, subordinates will recognize the importance placed on benchmarking by the degree to which management is visible in the process. With management active, all levels will be more productive in their benchmarking activities.
Source: Goetsch David L., Davis Stanley B. (2016), Quality Management for organizational excellence introduction to total Quality, Pearson; 8th edition.