In this video, I answer two questions. 1. What is a Benchmark, and 2. How do we do benchmarking?
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This is learning, so, sit back and enjoy
Benchmarks and Benchmarking
Origin
Like so many other terms in Project Management (like milestone and gateway), when we use the term ‘benchmark’, we are using a metaphor.
Originally, a benchmark was a mark that masons chiseled into stone structures, to make a bench they could use to place a leveling rod accurately. It was a standard reference point for taking accurate survey measurements.
And we use the term in the same way: as a point of reference that serves as a standard against which we can measure or judge other things.
Use Benchmarking in Business
In business – and, therefore, as part of many projects – benchmarking is comparing a competitor’s product, service, or business practices with our own. The aim is to understand the differences, and therefore design a project to improve the performance of what we do.
The choice of which organization or organizations to benchmark against is critical. The default, of course, would be an industry leader in the performance we are interested in. But sometimes, it’s more pragmatic to select either:
- A close competitor (with relevant issues)
- A comparable but better performer (so the performance boost is realistic)
- An organization in a very different sector (to optimize the chances of real innovation)
- Another part of our own organization (to harness internal best practices)
As a result, benchmarking can serve either:
- Incremental (continuous) improvements, or
- Dramatic (transformational) change
And we can also apply benchmarking to:
- Customer-facing products or services or internal processes
- Human-led activities or the technology we use
- Competitive position in the market-place or efficiency and profitability
The Benchmarking Process
The basic process is very simple. However, there is a lot of subtlety in real life, and it can pay to use an expert. After all, as Peter Drucker is often quoted as saying ‘what gets measured gets managed’. If your benchmarking exercise measures the wrong thing, your data can lead to poor outcomes.
It is quite likely that Drucker did not say this. And it is equally true that not everything that matters can be measured. Sometimes we need to make do with proxy measures. Our aim, however, is to find the best set of measures we can, of the things that matter. We often represent these as Key Performance Indicators, or KPI’s.
So, our simple process is:
Plan
- Determine which area of performance you want to improve
- Decide on what you are going to benchmark against
- Build a team
- Study your own performance to determine what data you will collect
- Reach out to people at the source of your benchmarking comparison for permissions
Research
- Collect the data you need
- This will be a mixture of numerical, observational (by your team), and reported (by the people involved – using questionnaires, interviews, or group sessions)
Analyze
- Evaluate and prepare the data you collected
- Perform comparisons with your own performance data
- Identify the performance gaps you can work on
- Find possible causal reasons for the performance differences
Implement
- Identify how to address the differences
- Create an outline project plan and secure approval
- Deliver the change project
- Monitor progress
Recommended Videos to Help with Concepts Related to Benchmarks and Benchmarking
Carefully curated video recommendations for you, which look at key business concepts, and answer the question, ‘What is…
- Business Analysis? And what is a Business Analyst? | Video
- KPIs? Key Performance Indicators | Video
- Kaizen? Continuous Improvement? | Video
- Kano Model? Project, Product, or Feature Prioritisation | Video
- Product Management? …and a Product Manager? | Video
- New Product Development (NPD)? And How to Do it… | Video
- Business Blueprint? | Video
- Role-Activity Diagram? (RAD) – aka Swimlane Process Diagram
What Kit does a Project Manager Need?
I asked Project Managers in a couple of forums what material things you need to have, to do your job as a Project Manager. They responded magnificently. I compiled their answers into a Kit list. I added my own.
Check out the Kit a Project Manager needs
Note that the links are affiliated.
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