Business

Important Benchmarking Factors to Improve Business Performance

As a management process, benchmarking can be a critical tool to help you achieve your strategic business survival goals and objectives. It provides a disciplined, logical approach for objectively understanding and assessing your strengths and weaknesses by comparing your results with the best in your area. It causes the development, implementation and updating of specific action plans designed to achieve success.

However, in order to become an integral part of your management process, benchmarking in ultimately dependent on two attitudes – management’s backing and your flexibility and willingness to change. The key attributes are:

Commitment form Top Management
When it comes to benchmarking your business performance, your management team must be behind you. Senior management must recognize the need for change and improvement. It must repeatedly demonstrate that it is willing to make the tough decisions needed for survival. It should commit your business to benchmarking as one of the primary means to help assure your survival.

A willingness to adapt
Probably the single most important factor for success in benchmarking is whether we as individuals are willing to learn from others. That means learning form other managers within your business and from managers in other companies.

You should be proud of your accomplishment, but you must understand that your company does not, and cannot, always have the best answer to every problem you encounter. By adopting this approach, and the rigorous application of benchmarking, you are taking a big step toward assuring your survival.

An active leadership
For you to implement the benchmarking process effectively, the benchmarking team manager must play a leading and supportive role in all stages of the effort. This is especially true in determining which companies will be benchmarked, how the information will be gathered, and who will be involved.

If you are benchmarking team’s manager, you should be involved with the work to assure that the requirements are understood and the plan of action has a high probability of success. This can be done by participating in periodic reviews of progress and suggesting alternative approaches. Ensure that the group has access to needed information and the resources necessary to complete the tasks. Assist where necessary to remove any barriers that impede progress. Keep all benchmarking team members informed and provide the opportunity to discuss and make recommendations as the work proceeds. Very importantly, let the team know you appreciate new and creative problem-solving approaches from the benchmarking team.

Effective use of the benchmarking process begins with an understanding of how it can be used to find ways to identify and effect improvements in functional performance and output results. The role of the benchmarking team manager in facilitating the team members’ understanding of the process is very important.

Benchmarking results in specific performance targets based on what your competition is expected to do, rather than some manager’s imprecise, intuitive estimate of what needs to be done. It is a rational way to establish short-term business survival objectives.

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