Good Governance Guides

Good Governance Guide: No 5.1

Category: Performance
Subject: Benchmarking
Source: Chartered Secretaries Canada

Definition:
Benchmarking is a powerful change tool and is something which is now identified with world-class organizations and best practices. Benchmarking first requires an organization to identify and assess its own processes and performance. Thereafter the performance gap can be quantitatively measured between an organizations performance and that of an industry leader. The idea involves introducing continuous improvement over time so that your own organization truly becomes world class.

Discussion:
There are generally acknowledged to be four essential steps in benchmarking. Those include: preparing to benchmark, discovering facts, taking action and monitoring for recalibration. There are a number of different types of benchmarking. An obvious type would be that of understanding your own organizations best practices and processes. Accordingly, this is known as internal benchmarking. Next is the notion of acknowledging the competition in an effort to comprehend improvement opportunities. Yet another type could entail looking beyond competition within the particular industry. An organization could look outside the industry to identify best practices which might have some applicability and enable your organization to leap ahead of the competition. . Lastly, an organization can engage in functional and process benchmarking. The former leads to a comparison between organizations of business functions, while the latter looks toward making critical business processes more efficient.