Benchmarking, Best Practices, and Root Causes
GP Deltapoint has a long history of benchmarking. We have conducted over 75 trips in Japan, Europe and the US, helping clients understand world class companies' key success factors and the ways in which those factors can be adapted and applied in their own businesses. The benchmarking process, when expertly conducted, avoids descending into "industrial tourism", but provides a structured set of applicable lessons. When benchmarking, we follow these guiding principles:
- Benchmarking is a process to carefully assess current performance and capabilities, and compare them to world-class standards.
- Benchmarking starts with self-study to better understand the current situation - know yourself.
- The purpose of benchmarking is not just to learn how to copy and catch up, but how to become the best.
- Benchmarking, by itself, does not improve performance. To realize gains, the information must be used in strategic decisions, or in process improvement.
We follow a structured six-step benchmarking process to ensure that this occurs: decide what to benchmark, plan the benchmarking events, understand own current performance, study best in class, learn from the data; and use the findings.
Take note of the last two points. They emphasize what Gratton and Ghosal point out in their Sloan Review article: that your signature needs are unique and that your use of findings must be specific not only to your current situation but also to your history and values. You should take specific care in applying lessons from other organizations to your own. Some organizations that pursue radical approaches will succeed. Toyota, for example, is an exemplar of team-based decision-making. But before embarking on a radical approach, you should ask whether all organizations that have adopted that approach have been successful. Specifically: are the findings from your benchmarking in fact the root causes of your benchmark organizations' success?
Unless you can determine that it is teamwork itself (as an example or Six Sigma or ERP) that contributes to a company's success, you may launch a program only to find that you are missing another accompanying critical success factor. In our experience, this leads thoughtful companies to benchmark more deeply and more often and to benchmark organizations that are at similar stages of strategic evolution as themselves. This will help you evolve your processes based on your unique values and aspirations as Gratton and Ghosal advise.
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