WorkshopOctober 2015

Why is benchmarking important?

- You will not know how well you or the different parts of your organisation could be performing

- You will not think that you or your organisation can accomplish major improvements

- You will not know how you or your organisation can bring about major improvements

Without benchmarking you will not reach your potential as a person or as an organisation!

The difficulty lies not so much in developing new ideas as escaping from the old ones

Benchmarking projects can provide the compelling vision to change and the

tools and support structure to achieve change

Anxiety for change

loss of power or position

fear of incompetence

loss of group membership

loss of identity

Edgar Schein’s 8 activities required for Psychological Safety:

•Compelling vision •Formal training •Involvement of the learner •Informal training of relevant surrounding support groups and teams •Practice, coaches and feedback •Positive role models •Support groups in which issues and problems can be aired and shared •Systems and structures that are consistent with the new way of working

Benchmarking will change your culture

Before benchmarking

After benchmarking

Not invented here Let’s use that good idea

One answer to a problem Many options

Internal focus External focus

History-based targets Best-performance targets

Reactive improvements Proactive improvements

Path of least resistance Best-value path

Managed by experience Managed by facts

We are good We need to do better

Following the industry Leading the industry

What is benchmarking?Benchmarking is learning

from the experience of others

Informal benchmarking is the most common type of benchmarking

learning from experts or colleagues learning

by networking learning from

websites & reading

Which informal benchmarking method should I use?

Research is currently being done by COER to classify the various types of informal

benchmarking and develop a roadmap for its implementation

Informal benchmarking work’s best when..

people know what’s in it for them and deem it is relevant

people connect with other people

people feel safe about showing what they do and do not know

Current issue or problems are shared

There is an open culture and people are encouraged to experiment and try new practices

The time-line to solve a problem is short

There are two types of formal benchmarking

Performance Benchmarking

Best Practice Benchmarking

“The comparison of performance data that has been obtained from studying similar processes or activities”.

It is useful for identifying strengths and

opportunities for improvement.

What is Performance Benchmarking?

Performance benchmarking is used for comparing financial and non-financial

performance

Financial measures:

Expenditure, cost of labour, cost of buildings/equipment, cost of energy use, adherence to budget, cash flow, revenue collected.

Non-financial measures:

Absenteeism, staff turnover, % of admin staff to front-line staff, budget processing time, complaints, environmental impact, call centre performance.

“the comparison of performance data that has been obtained from studying similar processes or activities

What is Best Practice Benchmarking?

and identifying, adapting, and implementing the practices that produced the best performance results”.

It is useful for “learning from the experience of others” and achieving breakthrough improvements in performance.

Certification Levels

www.coer.org.nz

Certification levels for TRADE have been introduced to raise the professionalism of benchmarking

Best Practice Benchmarking is the most powerful type of benchmarking

TRADE focuses on the exchange (or “trade”) of information and best practices to dramatically improve the performance of processes, goods and services.

1. Determine area of focus for benchmarking project2. Develop project brief3. Form project team4. Train project team

5. Understand benchmarking code of conduct6. Prepare Terms of Reference (TOR) 7. Develop documentation system

8. Review project progress and TOR9. Obtain approval to start the next stage of TRADE

Good planning is essential when undertaking a benchmarking project

Project name

Project sponsor

Team members

Project aim

Scope

Background

Project objectives

Expected benefits

Expected costs

Project stakeholders

Task management

Training requirements

Risk management

Communication plan

Change management

Project audits

Benchmarking Code of Conduct

TRADE timeline

Actual benefits

Actual costs

Terms ofReferenc

eshould

consider:

6. Obtain approval to start the next stage of TRADE

1. Understand area of focus to be benchmarked2. Define performance measures3. Identify current performance

5. Review project progress and TOR4. Prioritise and finalise the practices to be benchmarked

9. Obtain approval to start the next stage of TRADE

1. Establish criteria for selecting benchmarking partners 2. Select potential benchmarking partners3. Invite and acquire benchmarking partners

4. Prepare for data collection5. Collect and store data 6. Analyse data

7. Formulate recommendations8. Review project progress and TOR

6. Obtain approval to start the next stage of TRADE

1. Communicate findings 2. Develop action plan3. Obtain approval for action plan4. Implement actions 5. Review project progress and TOR

4. Close project

1. Perform cost /benefit analysis 2. Review TRADE project3. Share experiences and project outcomes

Having a project management system increases the likelihood of success

Description Expenses Capital Description

1.1 Determine area of focus for benchmarking project

Team to discuss on the area of focus

Meeting/ discussion

N.A. 0 L Garvin 12-Sep-07 12-Sep-07 12-Sep

1.2 Develop project brief Garvin supplied Powerpoint Slide deck prepared and presented during CSC Mgt Mtg

N.A. 0 L Garvin 12-Sep-07 12-Sep-07 12-Sep

1.3 Form project team Garvin supplied N.A. N.A. 0 L Garvin 12-Sep-07 12-Sep-07 12-Sep

1.4 Train project team Garvin supplied 3 people trained by Garvin (OJT)

0 0 L Garvin 12-Sep-07 12-Sep-07 12-Sep

1.5 Understand benchmarking code of conduct

Organise team to sign code of conduct

Understanding and Signing the Code of Conduct

0 0 L Garvin 12-Sep-07 12-Sep-07 12-Sep

1.6 Prepare Terms of Reference Draft Terms of Reference and tasks involved

Preparing Term of Reference (Planning Stage)

0 0 L Garvin 12-Sep-07 1-Oct-07 1-Oct-07 3 hrs, 1 pax

Risk (L, M,

H)

Person Responsible

Planned Start Date

Steps Tasks Planned Finish Date

Actual Finish Date

Expected Costs

Overview of TRADE

Why is it called TRADE?

Meaning: the commercial exchange (buying and selling

on domestic or international markets) of goods and services

Benchmarking: the exchange (or “trade”) of information and

best practices to improve the performance of processes, goods and services.

Why should you use TRADE?

Proven approach Flexible – short and long

projects Easy to communicate Step by step approach Rigorous planning Strong likelihood of success Delivers results

Recommended time allocation

Where should the benchmarking function reside?

State of Benchmarking, APQC 2009

There should be a Person, Committee, Unit or Department responsible for overseeing an

organisational-wide approach to benchmarking.

It should be at a level that enables it to coordinate and support all benchmarking activities across the organization to avoid duplication of projects and ensure strategic alignment. It may be part of an Organisational Development, Strategy, Quality or Operations Support Department.

All benchmarking projects being undertaken should be approved and reported through the Benchmarking Unit.

System for rewarding and recognising best practices

Strategy required to encourage informal and formal benchmarking

System for selecting and evaluating projects

Training for sponsors and teams

One or two benchmarking masters

Documentation system

Benchmarking partners database and partnership building

Internal benchmarking system

Facilitation and advice on benchmarking

Collection of performance benchmarks

A cohesive strategy, structure and range of activities should be planned to ensure benchmarking happens…

Systems for sharing best practices

Informal

Benchmarking

Best Practices

Formal

Benchmarking

A coordinated approach to benchmarking leads to major transformational change organisational-wide

TRADE Certification

Levels

A minimum of a “Pass” grade is required for one project to reach Benchmarking Proficiency

• Commendation• Pass

• Fail

Evidence:•TRADE Spreadsheet •Benchmarking Report (sharing best practices and recommendations)•Evaluation Report (Cost and benefit analysis after implementation) •Supporting Statement by the Project Sponsor or a Senior Executive

• Commendation x 2

• Pass

• Fail

“Commendation” grades are required for two projects to reach Benchmarking Mastery

Evidence:•TRADE Spreadsheet •Benchmarking Report (sharing best practices and recommendations)•Evaluation Report (Cost and benefit analysis after implementation) •Supporting Statement by the Project Sponsor or a Senior Executive