The Power of Benchmarking
Benchmark is a very old word that refers to a distinctive mark made on a fixed object that serves as a reference point in determining one's current position on topographical surveys and tidal observations. In today's business world, it has been adopted to refer to practices of other businesses against which our own performance can be evaluated and improved by learning their best practices.
Effective benchmarking can help an organization in many ways which include but are not limited to problem solving, strategy development, planning, goal setting, process improvement, quality improvement, reengineering, education and change facilitation. It is a technique that helps an organization to move from its current level of performance to a new and better level of performance faster and easier by learning from the experiences and lessons (both good and bad) of others who have already made similar attempts.
By definition, benchmarking is a systematic process of searching for best practices, innovative ideas, and highly effective operating procedures that lead to superior performance. It is intended to accelerate progress and improvement by studying the best business practices, operating tactics, and winning strategies of others.
A common misconception is that benchmarking is limited to comparing data from one organization to that of other organizations to determine how one measures up in comparison. While the comparison of data, (commonly referred to as metrics in benchmarking literature), is an important step in a good benchmarking activity, it is not the intended outcome. Stopping at this step can be easily turn benchmarking into one more form of soft quality as it may lead to conclusions that are inaccurate and limit opportunity for learning and growth.
To learn more about benchmarking, see the attached lesson titled The Power of Benchmarking.