benchmarking

it’s hard to improve what you don’t measure

As a general rule improving business outcomes is dependent on improving business inputs.
Bench marking business outcomes against the best practices of your industry is like a report card.

Just like when we were at school our reports often contained remarks like, “If he just settled down and showed more discipline his marks would improve.”

Our marks (outcomes) often reflected our effort (input). I remember asking one of my kids when they expressed disappointment at getting 60% for a math test “Well, out of 100 what was the effort you put in? And you have a lot of improvement potential” It was one of the few that arguments that I won!

We all benchmark. Even if we’re not in a formal benchmarking group, we’re doing it informally. When at an industry conference benchmarking is at the core of many of the conversations we have with our peers. What are you paying for…? How are you going with…? How do you handle …? Often, these conversations are the most important and valuable part of the conference. We’re comparing and finding out what’s possible.

but what if you’re not part of a benchmarking group?

One of the steps in our Actual to Best Practice program is measuring and benchmarking management and staffs’ individual best practices. Who is making the most sales and why? Who has the highest gross profit on sales and why? Who is generating the least amount of rework and why?

Just imagine if you could capture the best practices of each of your colleagues/staff and spread that across your team.

the first step though is benchmarking.

Over recent years we have surveyed over 500 staff in regard to their business inputs. We asked staff to rate their level of agreement with certain statements and the level of importance they place on the statement.

Here’s a snap shot of a few of the inputs staff want to improve.

We all understand the business outcomes/KPI’s we’re working to achieve.

Average Agreement 60% – 90% Average Importance.
Do all your staff know the outcomes you want to achieve?

We meet each month to review our progress in achieving business outcomes/KPIs.

Average Agreement 40% – 85% Average Importance
Performance measurement and feedback is a driver of performance improvement.

Everyone understands their roles and authority levels in achieving business outcomes.

Average Agreement 60% – 80% Average Importance
This provides the foundation for accountability.

There are no loafers in our group. Everyone puts in the required level of effort.

Average Agreement 65% – 90% Average Importance
In every group there will be those who put in more than others. Bad pushes out good. You don’t want your really good performers to think, “Why should I bother busting a gut when others don’t seem to care.”

We’re very efficient. We do things right the first time.

Average Agreement 65% – 90% Average Importance
High levels of rework reduce both morale and profits.

My manager is good at giving feedback on my strengths and areas he/she would like me to improve.

Average Agreement 50% – 80% Average Importance
Performance measurement and feedback is a driver of performance improvement.

We have a stock take and stock order cycle policies and procedures which we adhere to.

Average Agreement 60% – 85% Average Importance
Capital is tied up in our stock and debtors.

My manager practices what he/she preaches.

Average Agreement 70% – 90% Average Importance
Respect is a key influencer.

benchmarking provides the pressure for change

Bench marking is the key first step in the change process because the results create the pressure for change.

the change process

Step One: Pressure for change
Step Two: Clear shared goals (outcomes)
Step Three: Easy to understand and implement/actionable steps.
Step 4: Capacity for change (competencies and commitment)
Step 5: Managers model the way.
Step 6: Measure. Reinforce. Feedback. Challenge.

So, how does your business measure-up against the best practices of your industry, or just the expectations of your team?

Please don’t be scared to benchmark. No one is going to smack or yell at you if you get a bad benchmark report.

A bad report just means your business has a lot of improvement potential.

And remember, if you want to achieve best practice outcomes, you need to implement and maintain best practice inputs.