Benchmarking can be a company eye-opener. Internal, competitive, and outside industry benchmarking all have merits. Internal benchmarking can foster best practices. Assessing performance versus competitors can reveal your shortcomings and tell you where to focus. Looking at non-competitors and other industries can reveal surprisingly creative ideas for growth.
During my days leading marketing and innovation initiatives at Coke, General Mills, and Whole Foods Market, I participated in numerous company benchmarking exercises. We benchmarked quality measures, product development, pricing, channel management, market information management, packaging design, and marketing implementation. Each company had its own unique approach to benchmarking — from searching publicly available data to primary research using IT-supported software tools.
Here’s what I learned: the secret of successful benchmarking isn’t about HOW or WHERE YOU DIG. In other words, it isn’t about how you conduct your audit (there are no “right” or “wrong” rules). Or whether you benchmark performance inside the four walls of your company, against competitors within your industry, or outside your industry…
The #1 Secret of Successful Benchmarking
Knowing where you stand provides a point of reference for what could be and reveals uncommon, oft unexpected insights — but it’s only half of the equation. Discovery is not enough. Benchmarking data needs to support action to have any significant meaning or effect. And this holds true for companies of all sizes — from startups to global Fortune 100 corporations.
How to Make Benchmarking Data Actionable
Actionable data is always better than big data. The most important part of any benchmarking process is creating a plan of action that will improve organization performance. You need to leverage your new knowledge and implement changes.
Some tips to get you started:
- Start with a Goal
Before you launch any benchmarking initiative, define what you want to accomplish. Set clear objectives. How will you use the data to create value? At Coke, our benchmarking exercise goal was to justify shifting from glass to plastic packaging in the Non-Carbonated Beverages Division.
- Schedule Collaborative Sessions To Review Benchmark Findings
Facilitate internal discussion and interaction to identify ways that you can use results to improve business performance. After conducting retail industry benchmarking activities at Whole Foods, we held numerous cross-functional team member workshops to assess and plan store design and product merchandising changes.
- Improve Your Enterprise Asset Management Systems
Despite IT asset management systems being at the bottom of the trough of disillusionment in Gartner’s 2012 Hype Cycle, a good asset management system can make actionable benchmarking less formidable. Sharing knowledge assets across your company can improve data utilization and performance. With nearly 40,000 employees worldwide, General Mills used benchmarking results to build a massive standardized system for managing enterprise learning. The result? Stronger total employee engagement across the organization. Early stage companies can do this too, simply by storing and sharing data between founders and future team members.
- Integrate Benchmarks Into Sales and Operations Planning Cycles and Day-to-Day Planning
Help the front line. Ensure that benchmarking data is available to employees every time they make a decision about the future. This single act can boost innovation in your company from the bottom up.
- Make it Visual
Presenting data in a visually engaging way will improve your team’s ability to use it to make informed business decisions. Integrate data visualizations — rather than simply providing mountains of raw data — into company and employee dashboards.
- Reallocate Resources
Consider realigning resources — tear down silo walls — to activate your company’s plan of action after benchmarking. Concentrate resources on realistic targets.
Hungry for more benchmarking best practices? Check out “How Could (X) Do (Y) and Win?”. According to Jack in the Box’s Chief Corporate Strategy Officer, Mark Blankenship, Jack in the Box benchmarks their business “against” Hampton by Hilton hotels, a non-competitor. Non-competitor benchmarking enhances your ability to predict unpredictable market forces. Non-competitors are often open to meaningful, actionable ideation and collaborative, cooperative information sharing.