Some say benchmarking is something dogs do at the bus stop.

Sophisticates see it differently. They believe benchmarking provides a way out for leaders who hate to lay people off because it allows them to point to benchmarking results as the culprit and exclaim, "It wasn´t me!"

Yet others see it as a way to launch their companies into a higher atmosphere dominated by the successful few. With more than a smidgeon of insecurity, they assume that if they look like everyone else, they will become like everyone else. It´s something we learned in grade school-sit next to the smart kids and do everything they do.

In my experience, companies benchmark themselves against other organizations either to create some basis for cutting staff and becoming more efficient, or to make themselves more like businesses that consistently perform better. In either case, the premise is that someone else knows better. So if benchmark companies average three people in a department where I use five, I should cut two to look more like them. And if my performance consistently drags behind my comparison companies, I need to take steps to shape my department functions and staffing sizes to match the comparisons.

It seems pretty simple, yet how many organizations have become great when the strategy was to become like everyone else? What strategic or competitive advantage comes from being the same? And why should one business find it helpful to force itself into the same workplace structure as another without even considering its marketplace strategy?

A business leader shared with me a decision to benchmark all positions in her entire organization with the goal of offering the same pay as every other business in the benchmarked group-a logical way to test market equality for pay. What nobody considered was that one of the stated strategies of this business was to create exceptional customer experiences beginning with the first point of contact.

The benchmark study compared her front line customer support staff to low-paid receptionists and clerks that greeted customers in benchmarked firms. Pay for the positions was low making it almost impossible to fill them with highly motivated and capable people. Between missing work, showing up late, various obnoxious habits and responses like "whatever," managers were at their wits end. New hires rarely stayed with the job more than a few months and customers were frustrated with them. Needless to say, customer service was out of the picture and the painful trip through the cloning machine resulted in nothing but problems.

Perhaps, instead of basing their decisions on the study, this organization should have based their decisions on strategies for creating the superior customer service they sought. Instead of trying to mimic someone else, they might have created a unique job description that emphasized high levels of service and attention to customer needs that required skills and pay more consistent with the importance of the position.

Another executive, in the middle of an organization-wide transformation, informed me that she was bringing in a benchmarking firm to right-size the organization. It felt like when, on an otherwise sunny day, a huge rain cloud drifts over and dumps on you about the time you realize you shouldn´t have left the top down on your convertible. The reasoning was that they had to have the right people in the right positions, and the right number of people in each department.

My statement to her was, "What is right for your organization may not be what is right for anyone else, and vice versa."

This executive thought that she could speed up the process of change with a cosmetic makeover. But cosmetic makeovers do not change management practices and employee attitudes about the business...at least not in a positive way. She thought that if her organizational structure looked like the benchmarked companies, her results would resemble them as well. But what makes a business successful is what sets it apart-a unique strategy in response to marketplace demands that is executed exceptionally well regardless of what everyone else is doing.

Unfortunately, when benchmarking becomes the ouija board for decision making with little regard for overall strategy and competitive advantage, it can degenerate into something more fitting for the dogs.

Trying it on for fit: Despite the negative examples, benchmarking is not an entirely useless practice. Here are a few tips for using benchmarking studies.

1)      Use benchmarking as an exercise for examining the state of the business in terms of practices, manpower and structure.

2)      Use it as an excellent venue for asking "why?" and exploring how well execution aligns with strategy. By thoroughly examining the state of the business, and questioning why things are the way they are, a reality check is born that will help you analyze what may be out of sync with the intended direction.

3)      Never use benchmarking data as the standard for what your business should be doing. If you feel you need to assess your use of manpower or other practices, let the benchmark data stimulate questions about why you and your competitors do things the way you do.

4)      Have a clear-cut business strategy that guides all decisions and practices so that any discussion of benchmark data can be conducted in that context.

5)      Don´t allow the cost of a benchmark study to drive a decision to reduce headcount as justification for the expense.

6)      Don´t be afraid to learn from others and adopt their practices, when appropriate, but consider that your competitive advantage will most likely be in having a superior business strategy and being able to execute it more effectively than others, not in merely doing what they do.

Send an e-mail and let me know what you learn from your experiences.  I would love to hear from you!

Kevin Herring is co-author of Practical Guide for Internal Consultants, and President of Ascent Management Consulting.  Ascent specializes in creating business solutions through effective management, workplace cultures and organization systems. Kevin can be reached at 520-742-7300, kevinh@ascentmgt.com or www.ascentmgt.com.

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