Strategy Survival Guide

Strategy Survival Guide Version 2.1
Prime Minister’s Strategy Unit
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Strategy Skills > Building an Evidence Base
Learning from others - Benchmarking
> in practice
Comparing performance, or benchmarking, is a valuable means of improving understanding of capability and
identifying areas for development in the delivery of a strategy or policy.
There are numerous definitions of benchmarking but essentially it involves learning, sharing information and
adopting promising practices.
What is Benchmarking?
According to the Public Sector Benchmarking Service, benchmarking means "improving ourselves by
learning from others". Most organisations tailor definitions of benchmarking to suit their own strategies and
objectives. For example:
"Benchmarking is simply about making comparisons with other organisations and then learning the
lessons that those comparisons throw up". Source: The European Benchmarking Code of Conduct.
"Benchmarking is the continuous process of measuring products, services and practices against the
toughest competitors or those companies recognised as industry leaders (best in class)". Source:
The Xerox Corporation.
Why Benchmark?
When used appropriately, benchmarking has proved to be a very effective tool for bringing about
improvements in performance. Benchmarking provides:
• An effective "wake up call" and helps to make a strong case for change
• Practical ways in which step changes in performance can be achieved by learning from others who
have already undertaken comparable changes
• Impetus for seeking new ways of doing things and promotes a culture that is receptive to fresh
approaches and ideas
• Opportunities for staff to learn new skills and be involved in the strategy development and formation
process.
Types of Benchmarking
1. Strategic Benchmarking is used where organisations seek to improve their overall performance by
examining the long-term strategies and general approaches that have enabled high-performers to succeed.
It involves considering high level aspects such as core competencies, developing new products and
services; changing the balance of activities; and improving capabilities for dealing with changes in the
background environment. The changes resulting from this type of benchmarking may be difficult to
implement and the benefits are likely to take a long time to materialise.
2. Performance Benchmarking or Competitive Benchmarking is used where organisations consider their
positions in relation to performance characteristics of key products and services. Benchmarking partners are
drawn from the same sector. However, in the commercial world, it is common for companies to undertake
this type of benchmarking through trade associations or third parties to protect confidentiality.
3. Process Benchmarking is used when the focus is on improving specific critical processes and operations.
Benchmarking partners are sought from best practice organisations that perform similar work or deliver
similar services. Process benchmarking invariably involves producing process maps to facilitate comparison
and analysis. This type of benchmarking can result in benefits in the short term.
Strategy Survival Guide – Strategy Skills
Page 151