Benchmarking – A Very Powerful Tool Which Has Had Its Day in the Sun

In this PIP, I continue my series on various tools and techniques whose relevance and effectiveness are not as potent for process improvement as in the past.  I’m going to look at benchmarking and how a great concept became prevalent and over time lost its potency as a process improvement tool.

In the early 1990s, the concept of benchmarking swept through US businesses.  The idea was to personally see and examine an operation you would like to ‘learn from’ to improve your operation(s).  And in a number of cases, practitioners ‘thought outside the box’ and benchmarked similar operations in other industries.  Done right with proper preparation, selecting the right personnel to participate, and with the right follow up back at home, it worked wonders.  Many companies made massive improvements to their operations as a result.

Fast forward twenty years and the world of business has changed.  First of all any company which doesn’t already have efficient and effective operations is probably history by now.  The last economic downturn and global environment of today put them under.  Secondly many industries have standard practices to conform to various regulations.  You and your competitors have to comply with them or else.

Thirdly companies you’d like to benchmark are probably not even in your home country any longer.  Off shore and in a country with a different approach to visitors to their operations ends benchmarking them before you even start.

Finally like most quality tools, benchmarking does not provide long-term competitive advantage.  And if we shine a harsh light on all, most of them never really did.  It didn’t take everyone else very long to learn and adapt.  Now I will point out there is a world of difference between knowing and doing, and I know the latter is usually a minority.  But in the brutally competitive world of today, benchmarking is ‘so 1990s’ and just not the powerful tool it was then.