Benchmarking is the process of gauging the internal practices and activities within a firm to an external reference or standard. It is a continuous process of measuring one’s own products, services, systems, and practices against the world’s toughest competitors to identify areas for improvement.
Managers while benchmarking their practices should set realistic goals and gradually increase the level of difficulty to encourage employees. This technique is also known as shaping. For example, if an organization wants to meet the 1 % defects benchmark from its existing 20 %. It would be appropriate to set 15 % goals in the first place. Once this goal is achieved the manager can set a new target of 10 % and gradually meet the benchmark of 1 %. To use shaping effectively in benchmarking practices, the following tips can be considered:
Identify a benchmark (product, service or process)
Collect data to accurately define goals.
Collect data to determine the current performance of the organization against the benchmark.
Make the target specific.
Train the staff to meet set goals.
Provide feedback and reinforce set goals.
Review progress periodically.
9. Managing Strategic Capability
Competencies can be extended
Things that do not create value should cease
Best practices to be extended
Activities that add value should be extended
New and improved way of working should be introduced