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Diagnosis and Bench Marking

Each organization needs to tailor its own approach to improve competitiveness , focusing on the criteria

of most importance to success in its industry and in its particular niche. Some organizations will find that

speed is most important, where as others will need to strive at zero defects, break through

innovations,or extreme efficiency , though the most successful firms are good at several of these

criteria. The literature offers the most sucessful approach, but the most successful organizations creates

a sucessful blend that best fill their needs. Any plan for improving performance requires careful

diagnosis of the problem and then attention to the issue of getting the approach accepted and fully

implemented in the organization.

Diagnosis and bench marking: prior to undertaking any approach to improve productivity, processes or

quality, the organization must develop a through understanding of the current state of affairs so that it

can choose appropriately targeted methods and monitor progress.

Frequently when managers, are faced with poor productivity or quality, they attribute the difficulty to

low employee effort or carelessness. However, programs to improve employee motivation will have

minimal impact if productivity problems are due to defective raw materials, poorly conceived

manufacturing processes or inappropriate organizational structures. Clearly, careful diagnosis must

precede any efforts to improve productivity and quality. Diagnosis starts with a study of the organization

itself and usually should include reactions from organizations clients. An additional popular tool for

providing a frame of refrence for interpretenting internal measures is bench marking, studying the

performance and practises of world leaders in the industry or function being accessed.

When it comes to Competitive Intelligence, there are a few simple tools that can provide for sophisticatedcomparisons of business functions between organizations that can help firms "benchmark" the constituent

processes of the company with direct or indirect competitors, allowing a company to gain the upper handin a marketplace. But, what is the process for setting the metrics, methodologies, milestones andcomparisons which might be used to measure the success of a CI/benchmarking function, or the successof a Strategic Planning department as a whole?Benchmarking is best used and described as a framework for strategic planning in that, once elements ofstudy are identified, metrics can be applied to the key success factors (KSFs) of the industry ormarketplace and these measures or "benchmarks" are then used to develop future quality and marketinitiatives for the firm to enhance its overall competitive position.It is generally considered that there are seven steps to this process, as explained below. However, thisanalysis of intra- and sometimes inter-industry competitors can form the foundation for future competitoranalysis when the emphasis is placed upon the goals and financial capabilities of the competitor. This

becomes a question of how will the competitor compete with their particular set of resources and culture?The body of work surrounding business benchmarking has identified seven unique steps in thisbenchmarking process, many of which may offer some insights on the question of metrics.

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Seven Steps in the Benchmarking Process:1. Determine which functional areas within your operation are to be benchmarked -- those that will benefitmost from the benchmarking process, based upon the cost, importance and potential of changesfollowing the study.2. Identify the key factors and variables with which to measure those functions -- usually in the generalform of financial resources and product strategy.3. Select the best-in-class companies for each area to be benchmarked -- those companies that performeach function at the lowest cost, with the highest degree of customer satisfaction, etc. Best-in-classcompanies can be your direct competitors (foreign or domestic), or even companies from a differentindustry (parallel competitors with replacement or substitute products or services; latent competitorswhich might backwards- or forwards-integrate into your market; or, out-of-industry firms with whom you donot compete, but which have best-in-class areas to be studied such as FedEx or Wal-Mart in logistics).4. Measure the performance of the best-in-class companies for each benchmark being considered -- fromsources such as the SEC, companies themselves, articles in the press or trade journals, analysts in themarket, credit reports, clients and vendors, trade associations, the government or from interviews with

other organizations willing to share their prior research or "swap" it with you.5. Measure your own performance for each variable and begin comparing the results in an "apples-to-apples" format to determine the gap between your firm and the best-in-class examples. Always feel freeto estimate results, as exact measures are usually disproportionately difficult to obtain and often do notsignificantly add value to the study.6. Specify those programs and actions to meet and surpass the competition based on a plan developedto enhance those areas that show potential for compliment. The firm can choose from a few differentapproaches -- from simply trying harder, to emulating the best-in-class, changing the rules of the industryor leapfrogging the competition with innovation or technology from outside the industry.7. Implement these programs by setting specific improvement targets and deadlines, and by developing amonitoring process to review and update the analysis over time. This will also form the basis formonitoring, revision and recalibration of measurements in future benchmarking studies.Since most of the measures in a benchmarking process fall into one of two categories, financial resourcesand product strategy, this understanding can often be used to simplify the framework of analysis.It remains my gut feeling that, regarding the success of the process itself, ROI is only really measured indocumented "wins", for example we can describe success terms of contracts won due to a CI success.This can therefore be thought of in terms of new business signed and the profitability of that newbusiness, a problem solved or costs contained or reduced by the implementation of the CI/benchmarkingprocess.

The United States air force adopted bench marking on a large scale in 1993. Bench marking championswere appointed to drive the process at each of its thirty five commands and operative agencies. Abenchmarking effort was the stimulus for substantial changes in the basic recruit training program atlackland air force base in San Antonio. This program trains 35000 to 40000 recruits per year. Fourteenmajor issues were identified, comprising items such as physical conditioning, training, technology,academic curricula, and facilities. These were examined in a tour of six other basic training organizationsin the United States (Navy, Marine Corps, Army) and the United Kingdoms, as a result of seeing howthese organizations managed their recruit training activities, the air force implemented a number ofchanges. These included smaller class sizes, physical training based on preexisting fitness levels, and aredesign of the layout and the purpose of the obstacle course. All air force recruits are now benefiting

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from these changes. Benchmarking champion lineament COLONELbruce Jaeger says when we changeone hour of basic training , we get 35000 hours of improvement per year.

Obtaining commitment

No improvement plan, no matter how well it is suited to the situation, will succeed without the

understanding and commitment of employees. All stages of planning and implementation should includegetting more people on board and overcoming and minimizing resistance to change. The assessment andbenchmarking process just described is often very powerful in gaining top managements commitment toa change. Others who have been involved in the surveys or the bench marking study are also likely tosee a need for change and increase their level of commitment. In general, wider employee participation atearly stages will, pave the way of wider acceptance in later stages. many of the approaches that haverecently become popular place great emphasis on employee participation and empowerment. HRmanagers can provide a valuable service to other managers by emphasizing these points and developingmechanisms for employee input.

It seems to be critical that top management commit to and support major organizational change efforts.Turning all responsibility for the program over to HR department, the quality department, or hiredconsultants is a likely recipe for failure. Given ongoing and visible commitment at the top,a number of

steps are needed to convert the rest of organization. These almost always include extensive educationalefforts and may also include pilot projects that demonstrate the utility of change being proposed. A rule ofthumb for organizations attempting major changes is that such changes will be atleast three times asdifficult and take twice as long to implement as expected; miracles do not happen overnight, andsometimes they do not happen at all. Nevertheless, more and more organizations are managing to makethe transition to a high quality or high performance mentality.

Organizations can choose from a large number of possible methods to improve productivity or quality.Some of these methods focus on the entire organization and entail changes in the organization s culture,values, structure and relationship between and within work units. Other interventions are on a somewhatsmaller scale and may be put in place with less cultural change; they range from individual goal settingand finanicial incentive to job enrichment.