Why Benchmarking Efforts Fail

An excerpt on benchmarking project management from The Handbook for Quality Management (2013, McGraw-Hill) by Paul Keller and Thomas Pyzdek

The causes of failed benchmarking projects are the same as those for other failed projects (DeToro, 1995):

• Lack of sponsorship: A team should submit to management a one- to four-page benchmarking project proposal that describes the project, its objectives, and potential costs. If the team cannot gain approval for the project or get a sponsor, it makes little sense to proceed with a project that is not understood or appreciated or that is unlikely to lead to corrective action when completed.
• Wrong people on team: Who are the right people for a benchmarking team? Individuals involved in benchmarking should be the same ones who own or work in the process. It is useless for a team to address problems in business areas that are unfamiliar or where the team has no control or influence.
• Teams do not understand their work completely: If the benchmarking team did not map, flowchart, or document its work process, and if it failed to benchmark with organizations that also documented their processes, there can not be an effective transfer of techniques. The intent in every benchmarking project is for a team to understand how its process works and compare it to a process at another company at a detailed level. The exchange of process steps is essential for improved performance.
• Teams take on too much: The task a team undertakes is often so broad that it becomes unmanageable. This broad area must be broken into smaller, more manageable projects that can be approached logically. A suggested approach is to create a functional flowchart of an entire area, such as production or marketing, and identify its processes. Criteria can then be used to select a process to be benchmarked that would best contribute to the objectives.
• Lack of long-term management commitment Since managers are not as familiar with specific work issues as their employees, they tend to underestimate the time, cost, and effort required to successfully complete a benchmarking project. Managers should be informed that while it is impossible to know the exact time it will take for a typical benchmarking project, a rule of thumb is that a team of four or five individuals requires a third of their time for five months to complete a project.
• Focus on metrics rather than processes Some firms focus their benchmarking efforts on performance targets (metrics) rather than processes. Knowing that a competitor has a higher return on assets does not mean that its performance alone should become the new target (unless an understanding exists about how the competitor differs in the use of its assets and an evaluation of its process reveals that it can be emulated or surpassed).
• Not positioning benchmarking within a larger strategy Benchmarking is one of many total quality management tools such as problem solving, process improvement, and process re-engineering used to shorten cycle time, reduce costs, and minimize variation. Benchmarking is compatible with and complementary to these tools, and they should be used together for maximum value.
• Misunderstanding the organizational mission, goals, and objectives All benchmarking activity should be launched by management as part of an overall strategy to fulfill the organizational mission and vision by first attaining the short-term objectives and then the long-term goals.
• Assuming every project requires a site visit Sufficient information is often available from the public domain, making a site visit unnecessary. This speeds the benchmarking process and lowers the cost considerably.
• Failure to monitor progress Once benchmarking has been completed for a specific area or process benchmarks have been established and process changes implemented, managers should review progress in implementation and results.

The best way of addressing these issues is to prevent their occurrence through carefully planning and managing the project from the outset. This list can be used as a checklist to evaluate project plans; if the plans don't clearly preclude these problems, then the plans are not complete.

For more on benchmarking project management, see also:

Getting Started with Benchmarking

Benchmarking

Learn more about the Quality Management tools for process excellence in The Handbook for Quality Management (2013, McGraw-Hill) by Paul Keller and Thomas Pyzdek or their online Quality Management Study Guide.