By Gino Fontana
Chief Operating Officer and Executive Vice President, Transervice
As originally appeared in FleetOwner Magazine’s IdeaXchange
I suspect that most business executives would tell you that they know if their business is performing optimally. They can point to P&L statements, customer satisfaction surveys, etc., to show that the business is doing well and thriving. But is it really as good as it can be?
Internal measurements won’t necessarily tell you that. Let’s face it, we are all biassed when it comes to viewing the performance of our businesses. That is one of the reasons it is important to look outside your own operation to see how other businesses in operations similar to yours are doing. That is where benchmarking becomes a valuable tool. The goal of benchmarking is to see how your business is doing compared to other top-performing ones.
There are a number of reasons to complete a benchmarking exercise. These include the fact that it can help you set new goals for growth, allow you to understand your competition and their strengths and weaknesses better, and can help you set goals for the future.
Before beginning to actually gather data for the benchmarking analysis, you need to determine what you want to benchmark and which companies you want to benchmark against. The next step is to collect data. Involve as many people in your organization as you can in the data gathering process. Different areas of your company will have different market intelligence on your competitors that when taken together will give you a more complete understanding of the competition.
Once you have all the data, you need to determine what top performance looks like in the various KPIs you are evaluating. That will allow you to see where your company falls compared to the businesses you have benchmarked against. Are you really doing as well as you thought? The answer may be yes, but the analysis may reveal some areas where you have fallen behind.
Once you know which areas of your business need improvement, you can put procedures in place to improve your weaknesses. Make sure you develop a detailed action plan with SMART goals (Specific, Measurable, Achievable, Results Oriented, Timely) and timelines for completion.
Periodically benchmarking your company against your competitors is a good way to ensure you really are operating at the highest level. Finding out for yourself where your weak spots are and gives you the opportunity to shore them up before your competitors can exploit them for their own gain.
Give benchmarking a try if you want to stay on the path of continuous improvement, the only way a business can survive in today’s competitive environment.