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Value Creation Blog

3 Things You Need To Learn About Benchmarking

Posted by Josh Patrick

benchmarking resized 600We all know that innovation is one of the keys for success in any business.  For many benchmarking is one of the ways we believe we innovate.  Benchmarking is good and it’s important.  Is benchmarking enough to help your business move to the front of the pack?

Benchmarking is just the first step.  Yes, you should benchmark in your business.  You need to know what opportunities for your business are obvious.  You need to know how you stack up against your competition.  You need to know whether you use best practices in how you run your business.

My question is once you know what the other people are doing in your industry, what can you do to completely blow by them?  Many businesses I see today are merely good.  Some are good enough and some need a great amount of improvement.  Do you want to just be incrementally better than those around you or do you want to blow by them?

Think about these three things as you benchmark your company:

  • Deconstruct the competitive alternatives.  Look at what the options and features your competitors provide.  Are your offerings better?  Do they help your customers do whatever it is they want better?  Do your competitors design their offerings around benefits?  Do you design your offerings around benefits?  If not, why not?
  • Investigate to gather facts and perceptions.  This is the research step.  You will want to use focus groups, customer advisory boards, and just plain old internet searches.  You want to find out what is already out there as it relates to services and products you’re offering.  You want to use your customers to find out what their perceptions are of what you’re providing and what they would like to see you do differently.  Too many times companies put together products and don’t include their customers in the design.
  • Identify benchmarking opportunities.  Some of your business activities are good things to benchmark and some aren’t.  You have a limited amount of resources in your company.  Identifying what to benchmark in the first place is often just as important as the benchmarking process.

Now you know what the other guy is doing, what are you going to do? 

Benchmarking is not innovation.  It’s the research phase before you start in innovation process.  It can help you think about where your best opportunity is.  It can help you think about whether your innovation process should be around internal activities in your company or new products and services. 

Both are important.  At the same time many companies don’t have the resources to do both at the same time. 

I believe that if your benchmarking points towards internal activities do them first.  Having excellent internal performance allows you to develop new products and services in a more effective and efficient manner.  The goal is to blow the doors off your competition.  To do that you likely will have to think about what you do internally first.

Do you know where the focus on your business should be?  If not, you might want to think about benchmarking as a beginning step.

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Topics: business coaching, Focus, innovation

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