BENCHMARKING CAN BOOST BUSINESS
By: Constance Lee Menefee
If you benchmark, will they come?
Benchmarking is the ongoing process of measuring, analyzing and comparing your internal business practices and procedures with the best companies in your industry class.
I can already see busy owners of small businesses adding up the available hours and dollars. Business seems to be going well. Profits, if not up, are steady. Why fix something that isn't broken?
Maybe your business is one of the almost 15,000 service business in the Greater Cincinnati area with fewer than 50 employees. You've seen a couple of remarks about benchmarking and they've been made by the CEOs of Fortune 500 manufacturing companies. Isn't benchmarking another big business buzzword that will cost valuable staff time and slow down cash flow?
Perhaps you are one of the lucky ones: a company whose service is in such demand and so cheap that no one will ever be able to compete. Perhaps you are located in a magic place in which interests rates never rise, employees are all skillful and willing to work for peanuts and federal, state or local laws never change. You don't need to benchmark.
Everyone else might, at least, take a look at The Benchmarking Management Guide by the American Productivity and Quality Center. APQC takes you through benchmarking from definitions to sources to an extensive bibliography. There is even a benchmarking code of conduct.
If you decide to try your hand at benchmarking, the APQC has some cautions:
- you need to examine your own processes before comparing your business to the best in class establish measurements that are meaningful -- beware of parameters that are too broad
- look past the numbers at the way things happen, the qualitative processes as well as the quantitative processes
- make sure management is totally committed to following through
Plan ahead for the inevitable objections to changes in the business - if you run out of steam before implementing your findings, it will be the waste of time and money you worried about in the first place.
- do all your homework on the best in class; take a look outside your industry, too
Article originally appeared in the Cincinnati Post, June 18, 1996