I’m going against the current here by telling you that you’d be hard pushed to find any good benchmarking examples. Sure you can always find evidence of how fat cat directors can justify their trip to Jamaica with a couple of business cards from folks they met at the bar, but this does not cut it as a good benchmarking example.

Here’s the problem: benchmarking is in most cases a complete waste of time and money. Let me explain with a short story.

Denise, Matt and I were up at Aviemore for a few days over the holidays (Daniel decided he’s just too cool now and stayed at home). A friend, Mike, and his family joined us.

Though there was no snow (yes the irony is not lost on me) but on the first night the temperature went down to minus 12 degrees and Mike’s car wouldn’t start in the morning.

Guess what he did to fix it? He called out a mechanic. Guess what the mechanic did, looked under the bonnet, identified the problem and fixed it. But the question is "what would the mechanic have done if he was doing a bench marking study?"

First he would have guessed at the problem, then he would have opened the bonnet of my car had a look, chatted to me about why the car was working well and what I did when it didn’t start in the morning, then he would have written a report handed it to Mike and left. A great example of benchmarking don’t you think?

When your service is failing, isn’t that what you’re told to do by those in the know? Spend our time looking at others, who according to their KPIs, are better than you and then hope for divine inspiration.

Not convinced I’m right? Here’s an example. Imagine you are a director of a utility company and you have a division of your business that makes money from the installation of pay as you go meters. But the division is failing and as a result losing money.

You get permission to have a look at other businesses that use the pay as you go model. What might you find?

You might get told by one company you benchmark that success in the pay as you go market lies in choosing the right demographics of the client group, another might show you their technology, and yet another might explain how card distribution is the key.

You head back to office with your PowerPoint presentation to make three recommendations: better demographics, better technology, better distribution.

Sorry wrong answer, do not pass go and do not collect a promotion and a new car. Here’s why, because if you’d spent the time studying your system you’d have seen that the pay as you go meters have a standing charge of 99p per week. This generates an income of around six million per annum.

But when a home is unoccupied the standing charge continues to accrue, when the new tenant takes up residence and puts their card in the meter the card is immediately debited by the accumulated charge.

The disgruntled customer then calls in (failure demand) and requests a call out to have the meter re-set. The cost for this is sixteen million pounds per year.

You see by spending time studying your own system, not only have you saved the cost of flight to the Caribbean you have just found a way of eliminating £9,000,000 in annual operating expense.

Call me hasty if you like but I think the girl that solved this problem deserves a bit of a bonus and heck, why don’t we throw in a new car just for good measure. I still reckon we’re up by quite a few million. And easy money at that, it only took three days to identify the solution.

I had the privilege of working with this amazing leader, she knows who she is (don’t you Rachel?).

So here’s the lesson, whether you’re going to visit other companies in New York or New Cummnock, don’t, it’s a waste of your time and your money.

As an old friend of mine always says, "If your car breaks down, you won’t learn anything by looking under my bonnet."

If you beg to differ in your opinion and have any good benchmarking examples please feel free to post a comment and let me know.

Many thanks,
Stuart Corrigan

PS: You can download the MP3 version of this blog entry>> HERE. (Right click on the link, click on ‘save target as’ and click ‘save’)

PSS: Our Process Mapping & Analysis workshop is now available for 2010 >> Find out more HERE

PSSS: If you’ve missed listening to the great interview on Radio 4 with the late Russell Ackoff - ‘In Business - Doing it wrong’, you can still listen to it HERE

This entry was posted on Monday, January 18th, 2010 at 1:55 pm and is filed under Measures . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.