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Learning from others - Benchmarking
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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.
4. Functional Benchmarking or Generic
Benchmarking is used when organisations look to benchmark with
partners drawn from different business sectors or areas of activity to
find ways of improving similar functions or work processes. This sort of
benchmarking can lead to innovation and dramatic improvements.
5. Internal Benchmarking involves seeking
partners from within the same organisation, for example, from business
units located in different areas. The main advantages of internal
benchmarking are that access to sensitive data and information are easier;
standardised data is often readily available; and, usually less time and
resources are needed. There may be fewer barriers to implementation as
practises may be relatively easy to transfer across the same organisation.
However, real innovation may be lacking and best in class performance is
more likely to be found through external benchmarking.
6. External Benchmarking involves seeking
outside organisations that are known to be best in class. External
benchmarking provides opportunities of learning from those who are at the
leading edge, although it must be remembered that not every best practice
solution can be transferred to others. In addition, this type of
benchmarking may take up more time and resource to ensure the
comparability of data and information, the credibility of the findings and
the development of sound recommendations. External learning is also often
slower because of the 'not invented here' syndrome.
7. International Benchmarking involves
comparison with similar public-service providers in other countries to put
an organisation's performance into perspective. It helps decide when a
policy problem is tractable or actable and identify how much change to
expect. Comparison of similar value activities, rather than a straight
comparison of resources, is important for the strategic context to be
maintained.
When conducting benchmarking, it is essential to have
sufficient data to allow meaningful comparisons. This could be either
historical data over time, or cross sectional data. It is often useful to
use the data to test a hypothesis.
Strengths
- Successful benchmarking, in which gaps in performance are bridged by
improvements, results in significant tangible benefits including step
changes in performance and innovation, improving quality and
productivity and improving performance measurement.
- Benchmarking can raise awareness about performance and promote
greater openness on strengths and weaknesses
- Learning from others can result in greater confidence in developing
and applying new approaches
- Increased willingness to share solutions to common problems and
build consensus about what is needed to accommodate change
- Better understanding of the big picture and gaining a broader
perspective on the interplay of the factors (or enablers) that
facilitate the implementation of good practice.
Weaknesses
- Comparing performance of two different institutions/organisations/
countries can be misleading. For example different histories or
cultures could explain differences in performance. Benchmarking should
therefore be used to increase understanding, rather than prompt
specific actions.
References
The Public
Sector Benchmarking Service, a partnership between the
Cabinet Office and HM Customs & Excise, aims to promote
effective benchmarking and share good practices across the public
sector. The website contains further information on what
benchmarking is, the benefits and different types of benchmarking,
and the benchmarking process itself.
In addition to the sources listed in data
types & sources, the following provide useful
benchmarking data:
World Values Survey
International
Social Survey Programme
Health
and Behaviour in school-age children(WHO website)
International
Crime Victimisation Survey (Home
Office website)
Eurobarometer
Benchmarking
In Practice: SU & DCMS Sport Project
Development of policy for the Joint SU/DCMS report on
sport "Game Plan: a strategy for delivering Government's sport and
physical activity objectives".
The review team on the sports project used benchmarking
in drawing up its recommendations on the two main areas of sport:
grassroots sport and high performance sport.
The review team could not find a recent example of a
country which has been able to obtain and maintain a successful balance
between grassroots and high performance sport - many Governments fund one
at the expense of the other (note that there is no firm evidence that
strong grassroots sport and high participation levels leads to success in
high performance sport, or vice versa).
The team did not want to make recommendations that
focussed on just one area and so developed policy recommendations that
would enable the Government to take a 'twin track' approach and thereby
provide funding for both.
1. Grassroots sport
The team was keen to make recommendations aimed at
developing a sport and physical exercise culture in the UK and so looked
closely at the policies and interventions used by Governments in other
countries in order to increase participation in sport.
Analysis of other countries' participation rates
showed that, similar to the UK, almost all had a sharp fall-off in
participation rates at school leaving age, with the decline continuing
with age. However, Scandanavian countries, and Finland in particular, had
managed to reverse that decline. Whilst they too experienced a sharp fall
at school leaving age, the decline reached a plateau in peoples
mid-twenties. Participation rates then remained steady until to their
early forties when participation rates actually started to increase.
This was instrumental in giving Finland participation
rates of:
- Sport: 80%, compared with 46% in the UK
- Physical activity: 70%, compared with 32% in the UK
Members of the team visited Finland to find out more
about this and examine the steps taken by the Finnish Government to help
obtain these high participation rates. Their findings were used to help
shape the final report, with one of the main recommendations being that
the UK achieves Scandinavian levels of participation by 2020.
2. High Performance sport
Given a range of factors including population and GDP,
Australia has achieved disproportionate levels of international success in
sport in the last 25 years. Consequently, in developing recommendations in
this area, the review team focussed on Australia as a good benchmark.
Analysis showed that Australian funding of sport breaks
down to around 80% for high performance sport and 20% for grassroots
sport. It is exactly the reverse in the UK. Also, the Australians have
chosen to focus on achieving success in a smaller number of popular
sports, whereas the UK spreads the funding thinner over a much wider range
of sports.
The review team felt that it would not be desirable to
replicate the Australian model of a 80%/20% funding split in favour of
high performance sport, but that we ought to focus our attention and
finance on those sports which offer the best return for the Government
investment provided in terms of their:
- need for funding (to avoid funding 'rich' sports)
- potential to win medals/championships
- ability to deliver (does the sport have adequate management controls
in place? etc)
- popularity (and consequently their ability to generate 'feel good
factor' and national pride).
The resulting recommendations in 'Game Plan' are
aimed at making the UK (or Home Countries where appropriate) teams and
individuals sustain places in the top 5 world rankings by 2020.
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