Benchmarking is comparing one’s business processes and performance metrics to industry bests and best practices from other companies. In project management benchmarking can also support the selection, planning and delivery of projects.
It does not matter the kind of business you are into, there will always be competitors I.e. people who are also into what you are doing and they will be trying to do it better than you, in order to be the best in that particular business, Hence there’s need for you to benchmark your company.
As threatening as competitors might be, they also help in geering a company into achieving its sole aim, which is gaining grounds in the open Market and becoming the people’s choice.
As a business owner or investor you need to benchmark your company I.e look at other companies that are into the same products as yours, this is because it gives you edge over them. If you should focus only on your business and do not try to meet up with other companies, your product will become outdated and your customers will settle for the best.
Benchmarking your company does not mean you should do it exactly the way they are doing it, however you can try to notice how they are making their products or services and try to do it better than them.
In September 2013, NOKIA announced that they had been acquired by Microsoft in a deal valued at $7.17 billion. At the time, Nokia’s CEO Stephen Elop ended his speech with the following words.
“We didn’t do anything wrong, but somehow, we lost.”
Such an ending is devastating, considering Nokia used to own a large portion of the smartphone market share before the iPhone came out in 2007.
In a Linkedin blog post by Ziyad Jawabra, he notes that while Nokia technically did nothing wrong, it was their refusal to change and learn new things that ultimately lead to their demise. Jawabra wrote:
“They missed out on learning, they missed out on changing, and thus they lost the opportunity at hand to make it big. Not only did they miss the opportunity to earn big money, they lost their chance of survival.”
Jawabra stresses that if a company doesn’t embrace change and constantly learn new things, it will eventually be eliminated by new competition down the line. He wrote:
“The advantage you have yesterday, will be replaced by the trends of tomorrow. You don’t have to do anything wrong, as long as your competitors catch the wave and do it RIGHT, you can lose out and fail.
To change and improve yourself is giving yourself a second chance. To be forced by others to change, is like being discarded.
As jawabra said, in order not to fail in your business, you need to change as the world is changing and learn new things everyday.
6 steps to successful benchmarking
Use these steps highlighted by business Victoria to practically benchmark your business against your competitors:
1. Identify what you’re going to benchmark
Start with targeted and specific questions. The questions should be specific, capable of being explored using qualitative or quantitative research efforts and in line with your business strategy. If you haven’t already, it is a good idea to do market research.
2. Identify your competitors
Write down a list of who your competitors are. Most businesses benchmark within the same industry. Identify effective tactics used by your competitors and areas in which their business is performing better and note these down.
3. Look at trends
Look at recent statistics to analyse any current trends for insight into how fast your industry is moving and how you can plan ahead to keep your business in tune with customers’ needs.
4. Outline objectives
After the results of the analysis have been interpreted and communicated to the appropriate people, goals should be established. These should be concrete, attainable and in line with your corporate strategy. Make sure you list all your goals in your marketing plan.
5. Develop an action plan for your objectives
Define specific, concrete actions to be taken. They should detail the tasks involved and include specific names and dates associated with each task.
6. Monitor your results and implement an action plan
Continuously monitor the results of the benchmarking efforts and ensure that the action plans are consistently applied.