Your organization and you as a leader need to be creative and adaptive
in order to be competitive. If you have a problem to solve, you need to
come up with a solution that best meets your goals and objectives. To
avoid having to reinvent the wheel, you can look for ideas or best
practices in many different venues.
Approaches to Benchmarking
a. Competitive Benchmarking:
A possible first step in identifying
potential solutions is to find the best practices of those who have
faced and solved a similar problem. Where do you find it? Perhaps you
should model your solution on what the best among your competitors has
done in a similar situation. This is called
competitive benchmarking, and it reflects two problems, one
obvious and one subtle. The obvious shortcoming is that competitors are
not likely to share and surrender a competitive advantage. Less obvious
is that if the problem is more generic than specific to your industry,
you have excluded from consideration the majority of organizations, one
of which might have discovered the best answer.
b. Generic Benchmarking:
Looking beyond your own industry for the
best practice is called generic benchmarking. Generic
benchmarking can be done in a number of very different ways. You can
look for a single company that is known for having the best practice
in the area you are addressing. You may want to look at Southwest
for operational effectiveness while providing high quality service, or
Coca Cola for brand recognition, or Pfizer for effective mergers and
acquisitions. In generic benchmarking, you may want to go beyond looking
at one company. For example, you can look for the combination of best
practices for an area such as outsourcing by finding
thought leaders who have done research on many different outsourcing
companies and have compiled the entire set of best practices by looking
at a number of companies. For example, you might find research-based
articles on the best approaches to strategic outsourcing from developing
the strategy to implementation. These might be found in journals from
universities (e.g., Harvard Business Review or the Sloane Review); in
publications from consulting companies (e.g., The McKinsey Quarterly);
or in professional journals in functional areas such as information
technology, marketing, and so forth. And often there are books that have
been published in certain areas and on certain leaders (e.g., leaders
from Dell, Southwest, IBM, GE). Or you can find the best practices
that have been researched across an entire industry. For example,
you might look at the set of best practices that came from various
companies that have buses and trolleys around the world focused on
improving productivity. This study might also be relevant to improving
productivity in the airlines or for trains. Generic benchmarking could
also be used in an area such as finding best practices for change
management or transformational leadership. Once again, there are
thought leaders who have developed a set of best practices not on
companies, but based on benchmarking top performing leaders across
many industries.
