Exercise Two
The expression benchmarking has become one of the fashionable words in current management discussion. The term first appeared in the United States in the 1970s but has now gained world wide recognition. But what exactly does it mean and should your company be practicing it?
One straightforward definition of benchmarking comes from Chris Tether managing director of a New Zealand-based consultancy firm specializing in this area. “Benchmarking involves learning about your own practices, learning about the best practices of others, and then making changes for improvement that will enable you to meet or beat the best in the world.” The essential element is not simply imitating what other companies do but being able to adapt the best of other firms’ practices to your own situation.
Instead of aiming to improve only against previous performance and scores, companies can use benchmarking to inject an element of imagination and common sense into their search for progress. It is a process which forces companies to look closely at those activities which they may have been taking for granted and comparing them with the actives of other world-beating companies. Self-criticism is at the heart of the process although in some cases this may upset managers who are reluctant to question long established practices.
The process of identifying best practice in other companies does not just mean looking closely at your competitors. It might also include studying companies which use similar processes to your own, even though they are producing different goods. The point is to look at the process rather than the product. For example, Italian computer company Arita wanted to improve the quality of its technical manuals and handbooks. Instead of looking at manuals produced by other computer companies, Arita turned to a publisher of popular handbooks such as cookery books, railway timetables and car repair manuals. As Arita’s Technical Director Claudio Benclii says, “All of these handbooks are communicating complex information in a simple way - exactly what we are aiming to do. And in many cases they succeed far better than any computer company.”
There is some disagreement between benchmarking specialists as to the best methods to follow when starting a benchmarking exercise in your firm. Everyone agrees that the process must have the full approval of senior management but that it is best carried out by a comparatively small team. Some consultants feel this should be as small as three people but most favor a team of between five and eight at least one of whom should have some prior knowledge of the benchmarking process. In practice this often means bringing in an outside consultant – at least at the beginning. Once the team is assembled there can be anything from three to five formal stages in the process different approaches but whatever the exact technique benchmarking can only work if everyone in the company from top to bottom is committed to change.
15. According to the writer, benchmarking must always involve
A. changing your activities on the basis of new information.
B. Copying exactly what your competitors do.
C. Identifying the best company in your market.
D. Collaborating with other companies in the same field.
16. Some managers may resist benchmarking because
A. it takes their activities for granted.
B. It makes them examine the way they work.
C. It makes others question their efficiency.
D. It gives them a lot of extra work.
