Many business insiders fully expect the economic crisis of recent years to finally fade away in the coming New Year, a prospect that should make any business breathe a big sigh of relief. After all, the Wall Street meltdown took over 12 trillion dollars out of the economy, and that’s a conservative estimate.
But after that celebratory breather, it’s time to get back to business—and make sure your company is ready to take full advantage of better economic times. That will require a different mindset than the one of the past few years, where it was mostly a matter of sink or swim. You can now contemplate growth, instead of just survival.
That’s where the critical issue of performance comes into play; research shows that the better your company operates as an organization, the more profits it will realize. And, after this four-year drought, wouldn’t it be nice to find yourself as flush as possible with prosperity?
That’s why 2013 is an excellent time to put strategic benchmarking to work for your operation, if you haven’t implemented it in the past.
If you’re not familiar with strategic benchmarking, it’s a process that forces you to compare your business practices with the best in the business and up your standards accordingly. Otherwise, many of us tend to get too comfortable with the way we’ve always done things, without looking around to see how we could be doing it all better. As Rich Karlgaard wrote on Forbes.com, "Companies are like families—which is to say, many are dysfunctional and lousy at internal communication. They don't talk about the stuff that needs to be talked about: Are our products as good as the competition's? As an organization where are we superior, and where do we fall short?"
Where to begin with strategic benchmarking? First, identify your organization’s weak points. Which specific procedures or processes are either dysfunctional or much slower than the industry norm? This requires some honest feedback from employees; you may want to allow them to fill out a survey form anonymously so they feel free to tell the truth as they see it. You will probably be able to easily spot a consensus on what your major operational problems are.
Next, research the companies who are the best of the best in the areas you’re seeking to improve on and compare their facilities, personnel, and processes to yours. Depending on which area you’re seeking to improve, you may be able to benchmark against companies that aren’t competitive with you in any way (for example, customer service is customer service, whether you sell women’s clothing or auto parts). The advantage to that is that companies that aren’t rivals will be most open to explaining how they do business to you. If you must benchmark against a similar business, however, consider using one that sells in a completely different marketplace than you (in another state or even another country).
Finally, you must implement your benchmark findings within your own organization. This can be as simple as changing a few superficial procedures or as complex as gutting a department and completely rebuilding it. Clearly, this is where the rubber hits the road with benchmarking. If you’re not willing to do what’s necessary to upgrade your standards where needed, you’ve put in a lot of time and effort for nothing. If you’re truly committed to growth, you must be committed to taking the appropriate action.
If the global economy truly is on the upswing, strategic benchmarking is the perfect way to prepare for and handle rapid growth. It’s exactly how the outdoor clothing company L.L. Bean was able to speed up its order fulfillment time from two weeks to two hours back in the 1990s. When you measure yourself against the best, you understand what’s required to be the best. When you put that into action, you too will be able to rise up to that rarified atmosphere.
Result? Others will be benchmarking themselves against you for years to come.
[Image: Flickr user Campbell Orme]