It happens periodically. When managers are faced with improvement challenge, they ask for benchmarks. Not because they’re eager to take it on competition but to check if by chance they’re not already better or at least good enough, thus escape the challenge.
And this is only the beginning with trouble about Benchmarking.
It is legitimate to measure one’s performance against a standard – and it makes sense to measure relatively to the best, not the average or the worst – and to define a strategy according to the gap.
The problem is once benchmark data are given, people generally get shocked by the amplitude of the gap and start to argue about the figures, content, calculation, conditions and a long list of other items in order to demonstrate the benchmark cannot be taken as a reference for them/ the organization.
All energy is wasted to reject the evidence instead of trying to fill the gap or even challenge to leap ahead of competition.
The second kind of common problem is that benchmark is often understood as a target. But being just as good as the best is limiting the ambition to being a follower, a me-too, a substitute. Is this really what the organization’s management wants?
Besides, all the efforts paid to catch up with the best can be ruined if the leader moves further ahead.
We can assume the leader has some reserves the challenger may not have anymore or never had first hand.
Benchmark is therefore only a reference, not a target. The organization’s target should go beyond the benchmark and the way to achieve it should (probably) be different than the leader’s.
Third problem is that finding relevant benchmarking data is sometimes difficult, impossible or out of reach.
Some people/organizations may grant access to some data but refuse to give any details, pretending they are proprietary.
Some people/organizations don’t hesitate to invent such data and generally do not share details which might uncover the trick.
The problem within this problem is that data may be real and accurate, but refusing to share details – what can be understandable for the sake of data protection – leads immediately to distrust:
- are data trustworthy?
- what methodology was used?
- are data relevant, accurate?
- and so on.
Fourth problem is that top management is generally pleased with the revealed potential. Closing the gap with the leader means more sales, more profit, more productivity, less waste, less costs, etc.
How-to is not top management’s concern, that’s why middle management is often puzzled with the objectives assigned after the “big” strategy consultants made their recommendations based on benchmarks. Squeeze out 25% more productivity or boost sales 20% is easier set (sic) than done.
Middle management tend to react as described in the beginning of this post, with shock and denial.
But here I think the problem is not about trustworthiness of data. Even so figures are just fantasy, the assigned objectives are to be taken for what they are: objectives.
The proper reaction of all the organization should therefore be to find a way to achieve them. It probably will require to think outside the box, be creative, search for breakthroughs.
Doing so will most probably help the organization to leap forward, maybe even beyond the goal.
Alas, the latter is seldom seen and it takes a lot of energy to explain this challenge to scared managers.
Therefore, from my experience, benchmarking is only trouble!
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