Wednesday, 4 December 2013
Most commercial organisations track internal KPIs, and publish internal benchmarks. They publish league tables of the different departments, and differentiate the high performers, and the poor performers.
But Why? What's the point?
The answer is that benchmarking can identify the poor performers, can identify what each area of the business needs to focus on, and can give them a measure of how much they could (and need to) improve.
But they won't make the improvement, if they don't know how.
Benchmarking on its own is just a labelling exercise. It tells the departments where they need to improve, but it doesn't help them learn how to improve.
This brings us to the second purpose of benchmark, which is to map out the knowledge transfer that needs to happen within the organisation.
Benchmarking may show where performance of a team or unit is weak, but it also shows which other teams or units are stronger performers, and so can be sources of knowledge. The strong performers can help the weaker performers, and benchmarking identifies which are which.
Managers can also use benchmarking to set targets and drive the learning – “the factory in Poland uses 20% less energy than you do – I want you learn from them, and close the gap halfway by year end”. “Slough uses 80% of the packaging that you do – learn from them, and close the gap halfway by year end”.
In all of this, Knowledge Management is the enabler.
Target setting creates the focus of knowledge sharing, while measurement and benchmarking define where that knowledge should come from. Knowledge Management closes the gap, enabling the production units to learn from Slovenia, from Slough, from Syracuse. The mechanism of learning may be by site learning visits, by Peer Assist, by creating Knowledge Assets or training courses, or through the operation of Communities of Practice.