How Does Your Company Measure Up?
Is your company on top of its game? To find out, consider benchmarking. It is the process of evaluating your organization’s processes, functions, and outcomes.
Depending on your competition, you may decide to benchmark against their results. You may want to benchmark against your own past performance. Or, select a combination of both.
The easiest benchmark to compare is net income – comparing this year’s net income to previous years or competitors’ net incomes will provide a good initial indicator of your well-being. Other examples are measuring job efficiencies and comparing actual hours worked to the estimated hours needed.
The next step is gathering data. Although this is an easy step, it can be the hardest part for companies new to benchmarking. Here is where employee buy-in to the idea that benchmarking is important. If employees understand the reason behind having the benchmarks, it will be easier to ask them to assist in these efforts.
After the company has finished collecting the data for a given benchmarking period, it’s time to analyze the data. Compare the data to the pre-determined benchmarks and see how your company stacks up internally or to your competition. This is an essential part of the process. Without it, you will have wasted the effort of designing a system and collecting the data. Once your company sees how it measures against the chosen metrics, your management team can come up with strategies to improve the areas which need it and make the areas that are already good even better.
Keep in mind that to make this process meaningful, it has to be on-going with new measurements. Make benchmarking part of your daily operations. If you only gather data occasionally or sporadically, you will not be able to use it in a meaningful way. You don’t want to use old data to drive new strategic plans.