MOVING FROM THEORY TO PRACTICE
8.3 A three-phase, fourteen-step approach to benchmarking
This section discusses a three-phase, fourteen-step model for benchmarking. This is illustrated in Table 8.1 and what each of these steps involves is described in more detail below.
8.3.1 Phase one: preparation
Step 1: Obtain management commitment and define CSFs
This hardly needs elaboration at this point. The decision to engage in benchmarking may have resulted from a concern by senior managers that the organisation is falling behind competitors. As a consequence, a newmission may be required to focus all employees on the need to develop parts of the organisation in order to match the level of service and standards provided by competitors.
Regardless of the motivation, the starting point for implementing the tools and techniques associated with benchmarking will ema- nate from those who are responsible for the stewardship of the organisation at the highest level. As such, it is their responsibility to ensure that the following things are in place:
. Communication of the need to improve and how
. The resources that will be necessary to support everyone's efforts . Finance adequate to achieve objectives
. Time available to devote to the use of benchmarking
. Training and development for every person who believes they need assistance or newskills
. A definition of the CSFs for the organisation ± these will provide the focus for achieving corporate objectives
Step 2: Understand your own processes
This was dealt with in Chapter 5. Unless those who will be involved in improvement are sufficiently understanding of what they do, how will it be possible to learn from others the way to institute changes in day-to-day processes that will lead to real and sustain- able improvement? As explained in Chapter 5 mapping processes is a valuable exercise for learning what goes on and why. It should be anticipated that what people frequentlythinkgoes on is different to what actuallydoesgo on. Mapping processes ± an exercise which, Table 8.1 The three-phase, fourteen-step model
Phase (personnel
responsible shown in italics) Steps Preparation
Management 1. Obtain management commitment and define CSFs Process `operators' Management 2. Understand your own processes
3. Identify strengths and weaknesses in processes Management 4. Select processes to be benchmarked
5. Create benchmarking teams
Teams 6. Consider which are the best in the organisation's processes to be improved
7. Select an organisation against which to benchmark Execution
Teams with partners 8. Establish benchmarking agreement with `host' organisation
9. Carry out benchmarking in order to gain information data and advice on process improvement
Teams augmented as required 10. Analyse information and data collected in order to assess gap between existing processes and best practice
11. Plan actions to close gaps and improve processes 12. Implement agreed changes to create improvement Post execution
Management 13. Constantly monitor and measure the impact of changes implemented
14. Set newbenchmarks and continue the process by considering other processes to be improved
because it is diagrammatic, will be easy to understand ± will show if any such differences exist.
Step 3: Identify strengths and weaknesses in processes
Learning the strengths and weaknesses of day-to-day processes is essential in benchmarking. The strengths should be celebrated as existing good practice (even better may exist elsewhere), and the weaknesses as `opportunities for improvement'. Using bench- marking will assist in ensuring that the former are as good as the best, and that the latter are also improved to be equally so.
Step 4: Select processes to be benchmarked
Following on from step 3, it is important that processes are selected which, it is believed, can be improved by benchmarking. It is likely that they will be selected upon the basis of:
. Being crucial to the development of the organisation's ability to provide excellent service and standards to customers
. Being those that are in most need of radical change and improvement
Step 5: Create benchmarking teams
The importance of creating the right team was described in point 9 of the obstacles to benchmarking (section 8.2.9). In addition, section 4.4.2 of Chapter 4 deals with the importance of developing team- work as the basis for creating cultural change. As such, this is a part of the process of benchmarking that requires management in order to ensure that those who are involved have the skill, confidence and motivation so as to devote their fullest efforts to the objective of improvement.
Step 6: Consider who are the best organisations in the processes to be improved
At this point an organisation will be considering the sort of orga- nisations (or different parts thereof, if the benchmarking is internal) to visit where processes considered to be exemplary exist. This is not easy. There will be issues of access and confidentiality to be considered (see step 8). More difficult for any organisation, is knowing which organisations might be potentially useful for this
process. Clearly, for internal or competitive benchmarking, departments or competitors may be used (in the case of the latter, unless they operate in a different geographical region, there will be sensitivity). However, in the case of functional or generic bench- marking where organisations that are considered to be the best are used, an obvious place to search will be the list of recent winners of a quality award or a regional variant of the EFQM Excellence Model. Those organisations that win these awards are usually very happy to allowothers to visit their organisations for the purpose of benchmarking their processes.
Step 7: Select an organisation against which to benchmark
Following on from the decision-making of step 6, it will be necessary to make contact with an organisation that will allow benchmarking against their processes. Given the amount of time and effort that each party will put into the process, it is important to consider as fully as possible every aspect of howthis relationship will operate. The more successful the relationship, the more likely it is that each will get something useful from the exercise.
In addition, the following things should be considered:
. Time required (select an organisation that is close, so as not to involve considerable travel)
. Will there be the potential for benefit to both sides? (Excellent organisations are always aware of the possibility of learning from others)
8.3.2 Phase two: execution
Step 8: Establish benchmarking agreement with `host' organisation It will be extremely valuable to consider all the likely issues that will be involved in ensuring that the benchmarking can be carried out effectively and efficiently. There will have to be some allowance for disruption to each of the organisations when visits occur. As a consequence, a protocol for the benchmarking arrangements should be agreed in order to avoid potential conflict occurring later; this would include:
. Disclosure of information . Use of data/copyright material
. Access to certain departments and people
Step 9: Carry out benchmarking in order to gain information, data and advice on process improvement
The need to collect data that will allow understanding of the host organisation's processes is, of course, the key objective of bench- marking. In order to achieve this, those who are involved should constantly endeavour to discover the answers to the following questions:
. What factors make the processes of the host organisations so good?
. Howdo they utilise the factors of production?
. Are people organised in such a way as to make the host orga- nisation radical?
. What knowledge can be transferred successfully to improve operations and processes?
. What has been learned that may assist not only the day-to-day processes being specifically considered, but could also be more widely applied?
Step 10: Analyse information and data collected in order to assess gap between existing processes and best practice
Having carried out the visit to the host organisation and as point 6 of the obstacles to benchmarking suggested (industrial tourism), howcan the information and data be used in such a way as to increase the chances that any changes initiated will result in improvement? By identifying gaps between the existing processes and those of the host organisation and, knowing why the latter is so good, it should be possible to consider howto deal with step 11 ± planning howto do things differently.
Step 11: Plan actions to close gaps and improve processes
As with all other steps, careful consideration will be required; there is no point making rapid changes to processes if all that happens is the opposite to improvement. Unfortunately, there are no guaran- tees in anything in business (even in benchmarking). However, as has been continually stressed in this book, constant measurement will allow immediate assessment of the impact of actions (see step 13). In planning the action, it is essential that there is a consensus of agreement from all those directly involved, most especially those who will be involved in the implementation of changes to day-to-
day processes. The support of people at every level (particularly operational) is essential in creating a culture in which changes can be implemented to create organisational improvement.
Step 12: Implement agreed changes to create improvement
At this stage, implementation of changes should occur auto- matically; there should not be any issue over lack of time or resources (if that is the case, the whole effort will have been a waste of time). Much will depend upon what is required to implement the change. There will be no limit to the potential changes that may emerge, for example:
. Additional staff to deal with problem areas . Training or development of existing staff . Newequipment
. Alterations to established practices
. Alternative systems for controlling processes . Reorganisation of departments
. Faster/more robust methods of communication . Enhanced reporting of customer problems
What is important, of course, is to ensure that the result of change is improvement. If there are any negative effects because of the change, immediate action may be necessary to ascertain whether they are `temporary teething problems' and will soon be rectified.
However, readers should remember their own experiences of pro- blems with a product or service that have been explained as
`temporary teething problems'; customers will not be terribly interested in the inability of the organisation to get things right first time. A dissatisfied customer is less likely to come back and therefore, no matter howgood an organisation's product or process is in the future, it may be impossible to attract their custom again.
8.3.3 Phase three: post execution
Step 13: Constantly monitor and measure the impact of changes implemented
Figure 8.1 summarises what should be the impact of introducing changes to a process. Normally there will be a fairly rapid
improvement. In the long-term, however, this should be followed by efforts to continuously improve.
Step 14: Set new benchmarks and continue the process by considering other processes to be improved
The need to engage in improvement should be seen as something that is never-ending ± there is no completion. As previous chapters have described, excellence is something that cannot be taken for granted; business, like sport, is far more competitive than was the case in the past. The world-class organisations of today are constantly thinking of howto be even better tomorrow. They know that if they do not do this, there are others who will try to beat them in terms of reliability, value or cost; hence the cliche that tends to be used in considering excellence, `Get better or get beaten'. Therefore, unless an organisation is striving to be better in the future, its chances of being the number one choice will be severely limited.