Once an organisation has measured itself, it can then look externally to begin comparisons. Crawford says finding a benchmarking network where everyone can be assessed will help an organisation see the areas where it needs to lift its game. The important part here is to keep in mind your goals without getting carried away with other people’s targets. “Don’t just strive for something that someone else has, because it may not be the thing that you want, and it may not be the best use of your resources,” she advises.
Macdonald recommends that organisations benchmark by function rather than industry as this can deliver better results than just looking at what is considered good within your sector. “Your closest competitors are not likely to share their innermost details with you, which is why you should think about other industries,” he says. “Just say you’re in building and you’re off to see a travel agency: you say ‘we’re really good at our contracts’ so you share that and they tell you how they engage with customers.”
The best part about benchmarking is that it can be a shortcut to integrating best practice into your organisation. To do this, Macdonald suggests you visit a place that’s doing it better than you. “Not only do you see what the best practice is, you often get a solution that can be delivered rather than a hypothetical ‘yes we can improve by 25 percent but we don’t know how to’. You see a solution that’s working, that has been tested, and is more efficient than the one you have. You’re learning from other people’s mistakes rather than your own mistakes.”
According to Gould, it is acceptable to benchmark against anyone or anything as long as you understand what you’re benchmarking, and the context of the different organisational drivers that influence performance.
Crawford agrees. “A construction company is really good at cost control, estimating. If you’re in the finance sector, you don’t have good data for estimating because so much of it is knowledge work, therefore it’s much harder to control the cost. They can look to how the construction industry does it. If they have an open mind they’ll see things. Find somebody else’s burning platform and you’ll find they’ve really worked on doing something better.”
Strategy comprises the steps you need to take to achieve a goal, and benchmarking is a way to find out what your goal should be and how to measure your progress.
“You need to know where you are,” says Crawford. “If you want to maintain and improve your performance, then you need to have a baseline to know where you’re starting from and you need to have a realistic view of where you want to go to. What benchmarking does is give you realistic targets.”
If an organisation has gone through the benchmarking process properly by identifying the key areas where improvement is required, then the target should be obvious. Once a strategy has been developed, Crawford reminds organisations that it is important to then implement it. “Senior managers see the development of strategy as really important, which it is. The failure of strategy is the failure to do. It’s logical to be able to demonstrate that you are able to do it and you are implementing it.”
The essence of benchmarking, having understood your position in relation to others’, is to find good practices—the processes underneath the results, Crawford says. “The distinctive feature in terms of benchmarking in project management is that it’s about processes, so you do need to speak to other people. You can have all the fancy tables and diagrams in the world, but you need to be talking to other people.”
Borrowing a strategy as solution is not uncommon, Gould concurs: “If you’re benchmarking against an external, and the industry is not far away from that, what are they doing that you’re not doing, and what can you do to change?”