But, how exactly do you go about benchmarking?
The Steps:
1. Identify what it is (function or process) that your company needs to improve on.
As a business owner, what do you know about your company? The common answer is: everything!
Sure, we all know everything about everything that goes on in our companies. Being the CEO of Trimmel Analytics, I can tell you something about every project we've worked on.
However, I can also tell you about some experiences we've had were things did not go as planned.
The team spent the better part of a week contacting companies for a client who needed to examine his competitive landscape. The first couple of calls went ok but we ran into some individuals who started offering push back and to be honest, we had never experienced it before.
Regardless of the snafu, the project came off well and the client loved it. As soon as it wrapped up, however, we went straight into an after project evaluation. We concluded that we had a deficiency with cold calling.
With that evaluation in the books, we had an idea of what we needed to fix. Step 1 was completed.
It might not always be that easy though.
It's also a good idea to look into applying other analytical methodologies (ex. SWOT, Porters 5 Forces, etc) to weed out where your company may be lacking. And since you have all the information about your own company, it should be an easier process to evaluate the misses.
2. Identify the companies that do it well.
Once you figure out just what it is that you need to improve on, it's time to go out and find the companies that do it well.
"So if I own a car rental company and I'm looking to find a way to expedite my customer wait time, I should look at other car rental companies, right?"
Sure. That's a great place to START your search. As I mentioned in the last post, though, you don't need an apples to apples comparison to benchmark against.
Furthermore, when you begin your search for who to benchmark, you might well focus your search on national leaders in your industry. Again, that's not a bad place to START. It's ok, though, to take a step back and think about other businesses that need a larger amount of info from their customers but they are able to get them in and out quickly.
You never know, their could be a check cashing company that has the lowest in and out time for new customers and they could very well be right down the street. You save time and money by staying local.
Always remember that it's ok to think outside the box when it comes to your competitors. You never know when it will pay off.
3. Measuring the performance of others.
Now that you have figured out just who it is you are going to benchmark against, you can move on to the actual process itself.
When you start off asking questions about how company x can help you improve process y, you may have a laundry list of questions you want to ask them. You probably want to stay away from doing that.
How do I do that, and why should I do that are two common questions. Lets start out with the how.
- Before you call up a company and ask them to enter into benchmarking with you, you want to do as much research as possible. With as much information that is readily available in the open source medium, chances are you can find out tons of facts and figures about the company. This allows you to narrow the focus and be able to facilitate a nuanced interaction regarding your benchmarking.
- It's going to save you and your contact at the company time. Especially at the small business level, you and the other individual will likely have tons of other stuff to do. The last thing you want to do is to spend an extra hour doing an informational meeting with them when you could have taken the hour on your own time to get the general stuff out of the way.
- It helps to narrow the focus. This also helps you cut down on time. If you find out just where the process you are benchmarking fits in at the company, you can come in with nuanced questions for the contact. This will ultimately lead to a happier interaction for all involved.
Going back to the example I gave in Step 1, we didn't have a lot of experience in cold calling. So, I got in touch with some contacts and we figured out a best practice.
Once we had that figured out, we implemented it and it got integrated into the company guide to best practices.
That might seem like the end of the road.
That incident happened last year. You know what we did on the anniversary of that projects completion? We had a sit down and reviewed the after project completion document and in light of the new best practice, we evaluated the misses that we had and gave alternate ways to address them.
So, benchmarking doesn't end when you implement the process. It's a continuous cycle of evaluation.
That continuous cycle of evaluation throughout processes in your company will also help you to identify other chances for benchmarking.
Conclusion
In short, benchmarking is a great tool to have in your analytical toolkit. And despite the size of your business, it's worth it to close shop one afternoon and bring everyone in and talk about issues they think are prevalent. From there, you can start figuring out how you can go about benchmarking the processes that need to be addressed.
But, there is one thing to remember with all of this: You have to perform this process ethically.
And in the overall conclusion to the process of benchmarking, we will touch on the ethical issues that come into play.
