Six Distinct Ways Organization can use Benchmarking to Improve Performance.

February 27, 2009 by kutenk · Leave a Comment
Filed under: Management 

Benchmarking is the comparison of core process performance with other components of an organization (internal benchmarking) or with leading organizations (external benchmarking). Benchmarking is a key tool for performance improvement because it provides “real world” models and reference points for setting ambitious improvement goals. Benchmarking helps to (1) identify the gaps between the organization’s process performance and that of leading organizations, and (2) understand how these leaders have changed their structures, work processes, and lines of business to improve performance dramatically. When used in conjunction with performance measurement, benchmarking provides a powerful means of establishing a compelling business case for change.

An organization can benchmark in six distinct ways.
1. Internal Benchmarking (self-examination) is the analysis of existing practices within various departments or divisions of the organization, looking for best performance as well as identifying baseline activities and drivers. Drivers are the causes of work: the triggers that set in motion series of actions, or activities, that will respond to the requests or demands of the stockholders.
In doing internal benchmarking, management is looking downward, examining itself first before looking for outside information. Significant improvements are often made during the internal analysis stage of the benchmarking process. Value-added activities are identified and non-value-adding steps are removed from the process. Internal benchmarking is the first step because it provides the framework for comparing existing internal practices with external benchmark data. Internal benchmarking focuses on specific value chains or sequences of driver-activity combinations.

2. Competitive Benchmarking (limited to one industry) looks outward to identify how direct competitors are performing. Knowing the strengths and weaknesses of the competitors provides a good input for strategic and corrective actions.

3. Industry Benchmarking (looks at industry trends) extends beyond the one-to-one comparison of competitive benchmarking to look for trends. It is still limited in the number of innovations and new ideas it can uncover because everyone is following the other. At best, it can help establish the performance baseline or can give an incremental gain. It gives a short-run solution and a quick fix to an existing problem. However, it does not support quantum leaps or breakthroughs in performance since the comparison is limited to one industry.

4. Best-in-class Benchmarking (looks at multiple industries) goes beyond a single industry to look for new, innovative practices, no matter what their source. This is the ultimate goal of the benchmarking process. It supports quantum leaps in performance and gives a long-run competitive advantage.

5. Process Benchmarking (looks at key work processes) centers on specific processes such as distribution, order entry, or employee training. This type of benchmarking identifies the most effective practices in companies that perform similar functions, no matter in what industry.

6. Strategic Benchmarking (focuses on market success) examines how companies compete and seeks the winning strategies that have led to competitive advantage and market success.

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Find Greater Meaning of True Success. Success is a combination of achievement, significance, legacy, and satisfaction.

February 26, 2009 by kutenk · Leave a Comment
Filed under: Success 

We often define success as achievement. We believe that if we achieve, we’ll be successful. Yet, even when we do achieve, we feel unfulfilled. I believe that the definition of success as achievement is limiting.

When you develop your vision for success, be sure to include the four elements achievement, significance, legacy, and satisfaction.
Success is a combination of achievement, significance, legacy, and satisfaction.

 Achievement is what you accomplish in your career or business, usually as measured by your job title, promotions, accolades, and business bottom line. It may also be measured by such things as how many employees or customers you have, the percent growth of your department or business, movement into new markets or countries, or development of new product lines.

 Significance is the sense of meaning you get from the work that you do. Does it have personal importance to you? Do you feel that you have a reason to be in business? It boils down to why you are passionate about your work and business.

 Legacy is the contribution that you make to the world. It is the mark you will leave. It is how you make things better for your children’s
generation. As people move through life, a sense of legacy becomes increasingly essential.

 Satisfaction is the enjoyment that you get each and every day from your work. Do you get up in the morning and look forward to at least some (and preferably most) of the activities you’ll do that day? Do you get energized by your daily activities, interactions, and responsibilities? If you’re a business owner, recognize that you will be working both in and on your business, so you must enjoy the role that you create for yourself.

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