How do you improve your performance using benchmarking?

"Naming and shaming" is colloquial way of looking at rankings. Ranking among states, ranking among districts in a state and ranking, in my case, of Resident Welfare Associations on a set of pre-determined criteria. The race to improve one's ranking has turned out to be a great tool for issues such as No-Plastic, Segregation of Solid Waste, Tree Plantation and more.

In my consulting journey, I've seen many dive into benchmarking without a clear roadmap. It's like setting sail without a destination. Once, while working with a digital business client, we began by defining our KPIs around customer retention. Knowing our objective, we could then tailor our benchmarking strategy, ensuring every effort was directed towards enhancing customer loyalty.

I am a great believer in copying. If you are not able to copy then sometimes you will never learn. Its not everyone or everything that we are talked to about changing or learning. Sometimes just sitting back, watching, appreciating and doing the elementary copying is all it takes. That's like benchmarking isn't it? (Smile here). 😃

Benchmarking is a powerful tool for performance improvement. By comparing your processes, strategies, and results with industry leaders or best practices, you gain valuable insights and identify areas for enhancement. It's a roadmap to excellence and a source of inspiration to achieve higher standards

Benchmarking is a process of comparing the performance of your organization or team to the performance of other organizations or teams. Follow these steps for improve your performance using benchmarking. - Identify the processes or areas that you want to benchmark. - Identify the organizations that you want to benchmark against. - Collect data on the performance of the organizations that you have selected. - Analyze the data to identify the gaps between your performance and the performance of the organizations that you have benchmarked against. - Develop a plan to improve your performance in the areas that you have identified. - Implement your plan and monitor your progress.

Choosing the right benchmark is pivotal. In one project, instead of just looking at direct competitors, we ventured into functional benchmarking. We drew insights from a completely different industry but with similar operational challenges. The results? Fresh, out-of-the-box strategies that gave us a competitive edge.

It goes without saying that benchmarks need to be as much apples to apples. When a manufacturer has, let's say, 3 plants that make different products and they focus on a volume or capacity utilization metric, businesses can end up working on the wrong things or worse hurting themselves. Spend time on the critical levers that can be compared as equitably as possible.

Picking your benchmarks is like assembling a superstar cast for your blockbuster performance improvement movie. Each benchmark is a key player, bringing their unique strengths to help you steal the show of success. Lights, camera, benchmark – it's time to shine! Here's how to identify your benchmarks effectively: - Know Your Playing Field - Leverage Industry Data - Look Beyond Your Industry - Define Benchmark Categories - Consider Size and Scale - Use Peer Groups - Evaluate Long-term Success - Emulate Innovators - Evaluate Financial Metrics - Harness Digital Tools - Verify Reliability - Benchmark Over Time

Data is the lifeblood of benchmarking. I recall a project where initial data pointed towards a glaring performance gap. However, upon validation, we realized the data wasn't normalized for market size. Always ensure your data is accurate; it's the foundation upon which your strategies are built.

This also ties back to few relevant metrics. Too often there is a tendency to not start until we have all the data. Think 80/20 and yes, make it comparable.

Data alone isn't enough; interpretation is key. Using a mix of statistical tools, we once uncovered a hidden trend that was affecting our client's digital marketing performance. By delving deep into the data, we could craft a strategy that capitalized on this trend, turning a potential risk into an opportunity.

An important skill to learn here is how to interpret the data. We are so fortunate to have a lot of great analytical tools and we're getting to a point where tools like Power BI will even suggest charts. It's important to remember that analysis must ultimately lead to action, not paralysis. I recommend two things: 1. Step back and think about measurement - all analysis throws up a lot of interesting trivial things but "data vomit" isn't helpful so stay focused on what you wanted to measure and what has the most impact on it. 2. Can you verbalize your chart into a simple, short paragraph with a set of key actions that don't have many "yes, buts"

Unlocking the treasure trove of data is like having a crystal ball to supercharge your performance. It's the magic wand that transforms numbers into actionable insights, guiding you on the path to greatness. Here's how to master this critical step: - Data Collection - Comparison - Identify Strengths and Weaknesses - Root Cause Analysis - Trends and Patterns - Qualitative Insights - Data Visualization - Benchmark Gap Analysis - Benchmarking Ratios - Scenario Planning - Statistical Analysis - Create Actionable Insights - Feedback Loops It's the crucial step that transforms raw information into actionable strategies, setting the stage for meaningful and sustainable performance improvement.

Execution is where the rubber meets the road. I've always been a proponent of the PDCA cycle. During a strategic overhaul for a client, we used this approach to iteratively refine our strategies, ensuring continuous improvement. Remember, a plan without action is just a dream.

Have a bias for action and simple PDCA approach (Plan, Do, Check, Act) or Test-Fail-Pivot will be the difference in acting quickly on the most important things to catch up or outpace your competitors. Another best practice is to no expect 100% gap closure as the next step. Ask for something like 30% - not so daunting that it leads to inaction, not so small that it leads to low ROI, short term fixes.

Benchmarking isn't a one-time affair. In the dynamic world of digital business, staying static means falling behind. Regular reviews have helped my clients stay ahead of the curve, adapting to market shifts and always being ready for the next challenge.

There could be four main types of benchmarking: 1. Internal 2. External 3. Performance 4. Practice Internal performance benchmarking is often a good place to start, but the biggest benefit comes from external benchmarking that examines both performance and practice. You get maximum impact when you look at the world beyond your own desk, department, and company. However, let us first start with Performance benchmarking which is usually the first step organizations take to identify performance gaps. What you need ? Standard measures and/or KPIs and a means of extracting, collecting, and analyzing that data. What you get ? Data that informs decision making

There are various types of benchmarking - picking the appropriate one, depending on the juncture at which you or your organization is, is imperative towards PI. Ask the following Qs : 1. What do you desire ? 2. What will you get ? 3. What u need ? For example, external benchmarking compares metrics and/or practices of 1 organization to one or many others. What you need: u need organizations to agree to participate. You may also need a third party to facilitate data collection. This approach can be highly valuable but requires significant time and effort. That’s why organizations engage with companies who offers more than thousands of measures you can use to compare performance to organizations worldwide and in nearly every industry.

I would like to contribute from a Neuroscience perspective: 1. Neuroawareness: Develop self-awareness by understanding your brain's strengths and weaknesses. Identify areas of underperformance to recognize the need for improvement. 2. Neuroplasticity: Embrace neuroplasticity, allowing your brain to adapt and change. Benchmarking provides external data to rewire your brain. Actively seek best practices and adjust processes accordingly. 3. Neurofeedback: Regularly analyze benchmarking data for valuable performance feedback, mirroring the importance of feedback in brain development. Use this information to make informed decisions and continuously optimize strategies. Neuroscience + Benchmarking = Powerful Performance Enhancement.