BENCH MARKING – IS IT ALWAYS NECESSARY?

Nearly two decades ago, I was in discussion with the chief of an organization. He sought my views on ‘how do we benchmark the growth five years from now?’ They were nearly six to seven times lower in their annual turnover compared to their most potent competitor. I replied that in the next five years they should be at least twenty-five to thirty percent more than their leading competitor. Though they were thrilled at the reply, they sympathized with my ignorance of the market dynamics. “They have taken so many decades to reach the current target and we are just a couple of years old” was the argument. I felt that all their experience and expertise was the starting point for these people and there is no reason that they should discover themselves like others over the next few decades. Benchmarking is indeed an overly critical and tricky issue. It is just not a number game. In a world where progress is multi-dimensional and multi-faced the earlier approaches to benchmarking on linear thinking needs review and rehabilitation. “A benchmarking mind is an “interpreter” mind which can bridge the gaps” says Pearl Zhu, in Thinking Aire: 100 Game Changing Digital Mindsets to Compete for the Future.

“How do you benchmark the status of the institution three years from now?” asked one of the Heads of an organization to me. I wondered. “How do I benchmark my learning three years from now? I really don’t know how I would be learning everyday though I know the path I am travelling. I do get new insights, new experiences, and new relationships every day. Don’t you think that benchmarking and getting stuck to that will be a roadblock to real progress?” Well, to be honest, benchmarking is an exercise that fits into ‘learning, unlearning and relearning,’ and hence a dynamic concept.

There is also a prevalent misunderstanding among some aspirant bench markers that it is an exercise in pursuit of quality and excellence. It may not be. I know several institutions who have several certificates to celebrate their brands for quality yet finding a huge mismatch between their processes and perceptions. The inside story raises several questions regarding their message sent out.

Benchmarking is indeed a holistic exercise and not a piecemeal approach to one aspect of any functional dynamics. Yes, it does trigger a change, it puts more energy into the pursuit of innovation, it helps to put more discipline into the system to seek a defined goal; but does need a careful monitoring to see that it does not result either in a survival or competitive mindset, but directs the people towards a growth mindset.

One cannot totally discord the idea of benchmarking because it does give the necessary impetus, direction, energy and focus for a process of growth. Benchmarking does provide an opportunity for learning on a learning curve in a progressive manner and to raise the bar from where one exists. But it is important to consider the status of those bars because they do not essentially define excellence or narrate the stability of the process or the product. Robert Camp, considered as the Father of Benchmarking says, “Benchmarking is the search for the industry best practices that lead to superior performance.” However, the concept of competitive benchmarking has been under scrutiny in a world that is fast expanding, exploring, and growing. While the fundamentals of benchmarking do give scope for growth, it is also questioned whether it does address to a growth mindset. Arguments also raised whether benchmarking sometimes leads to limited values or that they act as possible roadblocks to some extraordinary growth.  The contextuality of benchmarking and the universe in which it is considered is important to make any meaning or sense for its purpose. “All successful companies are constantly benchmarking their competition. They have to know what they have to match up with day-in and day-out if their company is going to be successful” says James Dunn. However, the view that “Benchmarks look backwards, not forwards” is a statement which needs to be examined in depth. There is also a considered view that absence of benchmarking comes with an excessive cost both to the organization and the leadership. Leaders, who seem to fail in internal benchmarks and the external, not only lose the glow of leadership but their position in competitive racing for leadership. All that they need to understand that benchmarking is an exercise in wisdom and not just an outcome of a logic.

The contextuality, the tools applied for assessments, the universe of resources considered for benchmarking have always created serious doubts and apprehensions among many. Says Michael Cole of Australia in one of his articles “Benchmarking has been a credible approach to quality improvement and program evaluation for more than 30 years. However, the term has been used and abused so much since the 1970s that now an author might be describing anything from the establishment of performance indicators to competitor ranking, or gap analysis, through to a continuous quality improvement process. Equally confusing is the plethora of different benchmarking models published.”

Several agencies are on play to facilitate benchmarking of companies, industries and institutions based on certain criteria and parameters. In a number of cases, these tools and instruments for assessment appear to be borrowed from other fields and activities and are superimposed over these systems. Generic tools in the respective systems would rather do well as the purpose of benchmarking is essentially to facilitate empowerment and growth.

Benchmarking with some established brands just for the craze of it does land many new ventures in troubled waters. The startegies for benchmarking should be appropriate to the geography, culture, socio-economic environment. irrelevant adoptions will expose the organizations wrong paths sooner than later.

In a world when we are migrating from the knowledge society to the “intelligence society,” several of the technological tools help to articulate and project mythical benchmarks which are dubious, yet exciting to practitioners. With free access to knowledge, skills and opportunities, the scope for enterprises is becoming unlimited. The three vibrant players – skill, scale, and speed, seem to impact some basics of benchmarking. Some also feel it will be myopic to function with benchmarks which were set in the past as they might lack relevance to the future.

All learning institutions need to reconsider their benchmarking procedures to find – whether they are currently relevant, they are helpful or they create stagnation and inertia to the possibilities of unlimited growth. In a world haunted by increasing irrelevance of knowledge, the structures of benchmarking may need a critical review.