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What Is Benchmarking?

What Is Benchmarking?

At APQC, we define Benchmarking as the practice of being humble enough to admit that someone else is better at something and being wise enough to learn how to match and even surpass them at it.  Webster defines it as “to evaluate or check (something) by comparison with a standard.” The origins of benchmarking can be traced back to the Japanese term ダントツ, dantotsu, which means best of the best.  While benchmarking is typically thought of as “business” related tool, in reality, there are as many personal applications of great benchmarking as there are business.   Why? When you pull apart all the fancy terms and methodologies often associated with benchmarking, what remains is sharing, learning, and improving, and we can all benefit from each of those in all aspects of life. 

7 Reasons Smart Organizations Benchmark 

It wasn’t until the 1990’s that benchmarking quickly became a widely adopted tool to change operations in a structured fashion in order to achieve superior performance.  So, where do businesses utilize benchmarking? Virtually everywhere but the most common areas include:

  • To improve market performance and effectiveness.
  • As a catalyst for change, benchmarking helps to accelerate and manage change.
  • To achieve breakthroughs and or rapid innovation.
  • To assist in the budgeting and planning process.
  • To establish effective goals and objectives based upon what is truly achievable.
  • As a way to effectively solve problems.
  • To support learning and development.

Reducing Long Delays through Benchmarking

A classic example of using benchmarking to accelerate change and achieve breakthroughs can be seen in the hospital admittance and emergency services study done several years ago, where the emergency room admittance wait times were at an all-time high. Customer satisfaction was at an all-time low, time was money to the hospital and the wellbeing of patients were being compromised with the ridiculously long wait times.  The problem to solve: Reduce the cycle time from the patient’s arrival time at the door of the emergency services unit to the time the patient received diagnostic intervention by a physician.  Executives knew the processes within this scope were directly correlated to patient (customer) dissatisfaction, quality of care and individual’s health and wellbeing were at stake.  They also knew that the long delays were costly and negatively impacting financials. Enter benchmarking as a solution for answering the question “how” do we solve the problem? Benchmarking partners, the organizations who would ultimately share their practices, included National Car Rental and The Ritz Carlton Hotel.  

Using a structured benchmarking process, the participating organizations came together to compare methods, identify variations, and create actionable plans for change based on the partners’ high performance in the areas being studied.  The result was a dramatic reduction in the hospital admittance cycle time and an overall increase in patient (customer) satisfaction.

Chick-Fil-A Shows Why Benchmarking Matters

Take the current problem in the United States of COVID-19 vaccine distribution and the horrific situation that exists across the country today getting the vaccine into the arms of people.   Granted, this is a wicked supply chain problem involving many aspects of manufacturing, transportation, and distribution.  

States have been left to solve the distribution intrastate, each having adopted different practices, all based on well-intended objectives. Arguably benchmarking would have provided insight into successfully demonstrated practices resulting in reduced the confusion and cycle time across the country when it comes to distribution.   I nominate Chick-fil-A as the best practice partner who could have helped states dramatically streamline distribution and increase public perception of competence.   

In late 2020, in casual discussions with colleagues, I suggested it might be worthwhile for states to look carefully at Chick-fil-A for insight into successful practices in rapid distribution for planning purposes.  My belief, there was a lot to be learned (aka benchmarking). Their processes are stellar and result in both high quality and superior customer satisfaction.  If you have not experienced the three lines, ten automobiles per line, and all moving through within less than ten minutes while also receiving the correct order, go test it yourself.  

Needless to say, “I told you so”, did cross my mind when I read this New York Daily News article of January 26, 2020 on how South Carolina Chick-Fil-A had solutions for better COVID vaccine distribution. Formal or informal benchmarking, either works to solve real problems. Just ask the folks in Mount Pleasant, South Carolina, when the Chick-Fil-A experience became a real-world benchmarking example. 

Whatever problem you are struggling to solve, there is likely someone who has already solved it or at least has made more progress towards solving. Think outside the industry at others who are known for doing it well and use benchmarking as a means of improving. Our experience at APQC, organizations are most often, willing to share and exchange ideas about what has worked and what has not, offer insights and undoubtably, effectively done you, will learn and in many cases find those breakthroughs.