Looking for ways to improve their programs, CW managers seek out best practice trends in the marketplace and how they might be applied to their program. Such benchmarking data can effect great change, but the misapplication of benchmark insight can lead to the wrong conclusion in the comparison analysis, making that “great change” wrong for the program.
But the danger with benchmarking is not recognizing the “degrees of comparison” in the data/ perspective.
Degrees of Differences
A favorable performance in one organization may not be replicated at another because different structures, policies and cultures may not support that performance. But when benchmarking performances are compared, sometimes that visibility drives organizational changes to replicate and exceed the benchmarked performance. However, when considering benchmark comparisons, the degrees of differences need to be carefully evaluated when analyzing and acting upon the data.
To evaluate your program’s performance, one should absolutely compare it against a benchmark. But what makes a good benchmark?
There are two types of benchmarks: external industry benchmarks and internal benchmarks.
- External industry benchmarks. These are useful when understanding what program models, strategies, and tactics to employ. However, when trying to compare quality and efficiency performance metrics representing your program, industry averages often yield little meaning for comparison. Due to the almost infinite variation across companies, such performance comparisons can provide very little value and, at times, be very misleading.
- Internal benchmarks. These benchmarks can help you set goals based on current CW program values, or compare different segments in your CW program (e.g. geographic region or skill set). As the saying goes, “know thyself.” Segmenting internal benchmarking by business unit, department, geography and/or job type can provide significant, dependable, comparative insight into program performance levels/best practices. This kind of benchmark insight is founded in the environment in which the CW program is operating, with all the related organizational and cultural dependencies affecting the performance data.
Why benchmark? Ultimately, benchmarking is important because it can give marketplace directional visibility when setting a program’s performance and operational expectations. More important, it can provide insight on how the program can improve over the current policies and operations.
Choosing the correct benchmarks to focus on will help you identify performance and service gaps and opportunities for improvement in your program. Kristen McArdle, senior VP, consulting services at Brightfield Strategies, advises the following [1] when engaging benchmarks:
- Context. Know the context of what you’re comparing:
- Whether it’s internally or externally managed,
- The extent to which program operations are standardized across the enterprise,
- The size and composition of the spend (e.g., spend by skill category, location, etc.), and
- How long the program has been in operation.
- Go past quantitative. Qualitative benchmarks and perspectives can offer equal or more directional insight, especially around innovation.
There’s no doubt that there is a lot one can learn from the review of this marketplace best practice information. But making sure these benchmarks (whether external or internal) are evaluated with the correct context is critical to capturing the best insight applicable to your program.