26th November 2021
It’s safe to say that most businesses have a target that they want to reach. And you as a business owner or leader reading this article, are no exception.
We know business targets and KPI’s are only achieved when all aspects of the business are working well. Sometimes we do meet the mark and sometimes there are things we need to change. The question is what changes will make the most impact for success?
There are various tools and strategies you can apply to make your operations function well and processes for seamless workflow. One of the dynamic strategies that you could consider to apply to your business is introducing the power of benchmarking.
What Does It Mean To Benchmark?
Benchmark refers to the process where you, as a business owner or leader, take a dive deep into the world of other companies in your particular industry and observe the best standards they are following which contribute to their progress.
4 Steps For Benchmarking
To give you a better glimpse of how benchmarking is designed, here are its four distinct steps:
Step 1: Identify
To begin, we start by identifying the actionable insights that a company would likely want to focus on. These actionable insights may involve cost, production, and handling quality errors.
Step 2: Shortlist
Once the actionable insights are identified, the focus is turned to gathering a group or shortlist of other similar companies to involve and benchmark.
Step 3: Data Collection
After which, the next logical step is to data collection. In this step, a process is designed to issue a survey, which is in most cases confidential. The survey is issued, and the companies involved will contribute by answering all questions in the survey and submit their response within a certain timeframe.
Once the data is collected, it is analysed and collated into a report outlining the findings, then shared with relevant parties and participants.
Step 4: Review & Consider
For a business that is using the benchmark results as a useful business tool, this is where the fun begins. The idea is that the results will provide the insights to identify where the attention needs to be on one’s business systems and workflows in order to be successful.
One thing that is of concern is the confidentiality, however in order to benchmark this critical data is necessary to be shared. Often to keep the integrity of the data, this process will be administered by a third party that is neutral.
Benchmarking Vs Competitor Research
To prevent any confusion on the difference between benchmarking and competitor research, we’ve laid down a couple of key differences for your knowledge:
Benchmarking means to:
- Focus on best practices to help in crafting action plans
- Thrive for consistent improvement and sustainability
- Utilise shared information to improve
- Adapt to the best strategies that fit the business and customer’s needs
Competitor Research means to:
- Focus on measurement of performance
- Often create a ‘fix it quickly’ solution
- Rely on others to create your focus and activity
- Attempts to mirror a certain process/workflow
Benefits Of Benchmarking
The process of benchmarking brings a tremendous number of positive opportunities to any business such as:
- Improved quality of a brand’s products and services that surpass standards
- Better organisational performance as leaders and their teams strive to achieve the best practice and standards of the industry
- The ability to gather valuable data of modern technology and processes that work for other businesses therefore might bring advantage to the business environment.
- Taking an organisation to the next level through improving areas of gaps, with continuity and sustainability in mind.
- Leveraging the company’s area of strength to become one of the preferred brands in the market.
- Moves the business away from a responsive and reactionary mentality.
The Bottomline
Without a doubt, benchmarking can be a powerful tool to take a business to the next level. The opportunity is for the business to understand how they stand up against others in their own field and apply strategies that work in the same or similar industry. The surprise will be how this can massively contribute to successfully scaling a company!