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Quality Benchmarking

Quality Benchmarking

While any quality, business or process improvement project is likely to spend the majority of its time with internal analysis and solutions that come from within the organization, it is almost inevitable that a completely different organization (in the same or even a completely different industry perhaps) will be performing these tasks more efficiently and effectively. In recent years, this plain fact has created considerable interest in the art of ‘benchmarking’. At its most basic level, benchmarking involves finding the ‘best in class’ organization for a particular process.

Also referred to as “best-practice benchmarking”, “quality benchmarking” or even “process benchmarking”, it is a practice used in management and particularly strategic management, in which organizations evaluate various aspects of their large scales work-tasks and processes in relation to best-practice companies’ processes, usually within a peer-group defined for the purposes of comparison. This then allows a given organization to develop plans on how to make improvements or adapt specific best-practices, usually with the aim of increasing some aspect of performance.

For example, an organization looking to speed up its end-of-year accounting close-out from four weeks to something less, may find that best-practice organization close-out at year-end is a total of only three days. This becomes a competitive target for which to aim.

Contrary to the beliefs of some, benchmarking does not mean watching your competitors. Because benchmarking seeks to identify the best-in-class for a particular process, it is generally the case that organizations that do this better than anyone else will come from a whole range of very different organizations, industries and economic sectors (both nationally and internationally). For example, a hospital looking to improve its in-patient booking efficiency may look at an efficient car-rental organization’s booking system to gain new insights.

For the team involved in a process improvement project, benchmarking may be done through a quick paper-based research exercise, by making a few phone calls or by visiting other organizations to talk on a face-to-face basis. However it is done, benchmarking the best-in-class for your own process is an important external perspective to consider.

The following is an example of a typical benchmarking methodology:

1. Identify your problem areas  Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include: informal conversations with customers, employees, or suppliers; exploratory research techniques such as focus groups; or in-depth marketing research, quantitative research, surveys, questionnaires, re-engineering analysis, process mapping, quality control variance reports, or financial ratio analysis. However, before embarking on comparisons with other organizations it is essential that you know your own organization’s function, processes; base line performance provides a point against which improvement effort can be measured.

2. Seek out other industries that have similar processes  For instance, if we are interested in improving “hand-offs” in the area of addiction treatment we would try to identify other fields that also have hand-off challenges. These could include air traffic control, cell-phone switching between towers, transfer of patients from surgery to recovery rooms etc. This then helps us target possible for the next step.

3. Identify organizations which are leaders in these areas – Here we look for the very best in any sector, industry and in any wider geography (other cities, countries etc.). Consult customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy of study.

4. Survey companies for specific measures  Companies should target specific business processes using particular measures which ensure that a fair comparative assessment can be made. In other words, it is important to ensure that we are comparing “apples and apples” in any process comparison.

5. Visit the “best practice” companies to identify leading edge practices  Companies typically agree to mutually exchange information beneficial to all parties in a benchmarking group and share the results within the group. Doing this on a face-to-face basis helps to ensure that processes are properly comparable and that process efficiencies are fully understood (before being adopted).

6. Implement new and improved business practices – Here, we take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the improvement project and selling the improved process efficiency and effectiveness ideas to the organization for the purpose of gaining demonstrated value from the process.

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About Dr. Jon Warner

Dr. Jon Warner is a prolific author, management consultant and executive coach with over 25 years experience. He has an MBA and a PhD in Organizational Psychology. Jon can be reached at OptimalJon@gmail.com

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About the Editor and Primary Author

Jon Warner

Jon Warner is an executive coach and management consultant and in the past has been a CEO in three very different companies. Read more

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