Genric Benchmarking

Introduction

Your organization—and you as a leader—need to be creative and adaptive in order to be competitive. If you have a problem to solve, you need to come up with a solution that best meets your goals and objectives. To avoid having to reinvent the wheel, you can look for ideas or best practices in many different venues.

Approaches to Benchmarking

A possible first step in identifying potential solutions is to find the best practices of those who have faced and solved a similar problem. Where do you find it? Perhaps you should model your solution on what the best among your competitors has done in a similar situation. This is called competitive benchmarking, and it reflects two problems, one obvious and one subtle. The obvious shortcoming is that competitors are not likely to share and surrender a competitive advantage. Less obvious is that if the problem is more generic than specific to your industry, you have excluded from consideration the majority of organizations, one of which might have discovered the best answer.

Finding the Unexpected (Toyota)

Looking beyond your own industry for the best practice is called generic benchmarking. Generic benchmarking can be done in a number of very different ways. You can look for a single company that is known for having the best practice in the area you are addressing. You may want to look at Southwest for operational effectiveness while providing high quality service, or Coca Cola for brand recognition, or Pfizer for effective mergers and acquisitions. In generic benchmarking, you may want to go beyond looking at one company. For example, you can look for the combination of best practices for an area such as outsourcing by finding thought leaders who have done research on many different outsourcing companies and have compiled the entire set of best practices by looking at a number of companies. For example, you might find research-based articles on the best approaches to strategic outsourcing from developing the strategy to implementation. These might be found in journals from universities (e.g., Harvard Business Review or the Sloane Review); in publications from consulting companies (e.g., The McKinsey Quarterly); or in professional journals in