|
Benchmarking - Approach with caution and
know its limits
Robert M. Tomasko
I have been involved in benchmarking assignments for much
of my consulting career. While I have found these very useful
to stimulate client (and consultant) thinking, and to give a
feeling of optimism that alternatives are available and change
possible through carefully selected role models, there are always
limits to how successfully one company can pattern themselves
after another.
Here are some common difficulties businesses have had with
benchmarking.
1. Benchmarking is by nature a rear-view mirror approach.
Before a practice can be selected for benchmarking it has to
have been put in place and proven its worth. Considerable time
may pass from when this happened and when a client is considering
adopting a practice. A practice that was right for one point
in time, may be less useful in the present.
2. Companies to be benchmarked against are frequently chosen
by past financial performance. Past success is not always the
best predictor of today's or future performance, and many one-time
excellent companies have suffered performance declines
even though they seemed to be doing all the "right things."
Also, past financial success might have had nothing to do with
many of the management practices in place at that time.
3. Benchmarking often attempts to isolate and extract individual
management practices from the broad array of practices a company
is using. This extraction processes often misses the interdependencies
and preconditions one practice sets for another. This extraction
almost always misses the cultural context that enables a particular
practice to be effective in one company, but useless in a business
with a different history and culture.
4. Companies sometimes try to take short-cuts to addressing their
underlying problems, by hoping to find (symptom) relief through
force-fitting "proven" best practices on to their organization.
Organizations have to be treated as organic "wholes"
and the implications of change in one aspect of the how the company
operates must be considered in relation to how everything else
works.
5. For many companies the future is a moving target. The biggest
danger from focusing too heavily on the best practices of the
past is the risk of missing clues about what will be most needed
in the future. Back to point one above - it's hard to see where
you are going if too much time is spent looking in the rear-view
mirror.
© Robert M. Tomasko 2002
|
