The APQC Blog

Benchmarking Relevance Continues to Evolve

If you’ve read my posts related to benchmarking, you know I feel relevance is vital to making benchmarking real for most organizations. This is an area I continue to examine with organizations providing, as well as consuming, benchmarking information. Relevance is the issue currently holding benchmarking, as a tool, back from providing maximum value to business leaders, but, we will solve it. Here is how I see it evolving right now.

Industry Isn’t Relevance

The fact that two organizations are in the same industry provide as much relevance as the fact they both have vowels in their name. Industry peers seldom execute work the same way; their processes perform very differently. But, without relevance, we fall back to industry designation.

Emerging Models of Relevance

There are models emerging that better define relevance for many users of benchmarking information. These models provide a frame of reference for users to better understand how they compare operationally to other organizations. These models provide a much more contextual form of relevance, and once a user understands how they compare within this framework, they can then better use performance benchmarking data. This approach provides a better way of thinking about the expected return from additional resource investment. Here are a few examples.

Maturity Assessment Models

These models provide a general understanding of the characteristics of maturity, and help users understand their general level of maturity versus other organizations. Users can combine this relative information with the actual performance benchmarks of organizations at each level of maturity to understand 1.) what would be required to increase maturity (investment) and 2.) what performance increases might result (payoff).

Performance Standards

Many trade groups are starting to document standards of performance for a given process. These are vetted by subject matter experts, and usually provide minimum standards of performance, as well as “best practice” standards. Once again, users can better use performance benchmarking data once they assess their current level of performance against the standards and determine the investment required to better adhere to the standards.

Award Programs

There are many process excellence award programs in existence. Many are very robust and beneficial not only to those that win the award, but also those that participate in the application process. Most are based on peer-review with very robust criteria and onsite visits to confirm adherence to any self-reported information. Similar to the other approaches noted above, by benchmarking with those that have applied for and/or won the award, a user can understand what performance increases may result from going through the award process.

While these approaches aren’t perfect, they are moving benchmarking, as a discipline and business tool, into new and innovative areas. Something that will ultimately benefit users of benchmarking data and information.