Benchmarking

5. Managing Improvement

5.1 Summarise where you differ from your benchmarking partners.

Depending on your objectives, you may identify:

• Differences in performance indicators.For example, higher staff turnover or lower gross margins.
• Differences in individual processes.For example, how you recruit or how your production processes work.
• Differences in strategy.For example, what your human resources policies are, or what quality standards you have for your products.

5.2 Investigate why you differ.

Typical reasons include:

• Your cost control is poor.
• Your processes are outdated or inefficient.
• You have made a different trade-off.For example, if you choose to recruit low-grade (and inexpensive) employees in the knowledge that they will soon leave.
• You have a different focus from your benchmarking partners.For example, if you have a different target market.
• You have different organisational constraints.For example, if you do not have the financial resources to invest in new technology.

5.3 Decide what action to take and implement the changes.

There will normally be several options open to you:

• You may decide to do nothing.You may accept that there is a good reason for the difference, or that it would be impossible to make changes.
• You may feel that you should adapt your processes.If your benchmarking partners are similar to you and achieve better results with a different process, you may want to adopt elements of that process in your business.
• You may target specific areas for improvement and further investigation.For example, if it is clear that your marketing is underperforming but unclear what you can or should do about it. See Planning your marketing.
• You may realise that you need to redefine elements of your strategy eg changing your objectives or standards.

5.4 Review how well the benchmarking study went and what impact the changes had.

• Did the benchmarking study achieve its objectives?What went well and what would you do differently next time?
• How well is your business performing now?Did the actions you took lead to incremental improvements or to a step change in performance?