Benchmarking/Best Practices

One thing that seems common to most top plants, or other top business operations for that matter, is a cluster of practices called "benchmarking" or "best practices." There are lots of official definitions out there. Here are the ones I use.

"Best Practices" refers to identifying, sharing and implementing practices that result in improvements in either efficiency or effectiveness. Best Practices programs are continuous quests for improvement. This ties closely to "Benchmarking," a term that comes out of the quality movement. I can't improve on the definition given by Richard Dun in an article in Plant Engineering, so here it is. "Benchmarking is a systematic, continuous process for measuring, evaluating, and comparing business practices against recognized leaders to determine the extent to which you can improve your organization's performance."

In general use, "best practices" seems to refer more to looking inside the organization, while Benchmarking seems to refer more to looking outside the organization. Both are parts of a good knowledge management program. Note that many companies do the job without hanging any of the above signs on what they do.

The power of these programs is in their simplicity. Sure, you can build Byzantine administrative structures around a best practices program, but at bottom here's what you want to do --

 Find good practices
 Share them
 Implement them in other places

To find good practices you need to measure your results and those of others. Then you need to go out and aggressively find out who's doing good things. Your business intelligence efforts should help you find out what's being done by others. How do you find out what's going on inside your organization?

You have to encourage folks to share. If you've got a sharing culture, great, but if you don't, you need to look at serious behavioral change. This is difficult. You can hire consultants and embark on an enterprise-wide cultural change project. Despite the promises in those slick brochures, these are difficult, failure-prone and often take a few well-placed funerals and firings before they take effect.

It's usually more effective to concentrate on changing your actual practices regarding pay, praise, and promotion. Adjust your compensation program so you pay people more when they share good ideas. Praise them and their bosses publicly when they do. Promote the ones that share.

And, this is important, don't forget to hold supervisors accountable for reviewing the way their subordinates share ideas and information.

Without looking at the rewards systems, you have very few ways of effectively encouraging the kind of change that sharing information often calls for.

Once folks are willing to share, you can use technology to make that sharing more effective. Networks, especially Intranets, are great for spreading good ideas around.

So … which ideas do you pick to put in place first? The answer is simple, but not always easy. You pick the ones that will have the biggest impact on your results.

Here are some possibilities.
 Start with ideas that will impact your biggest expense line items.
 Start with ideas that will break a bottleneck or remove a constraint.
 Start with ideas that will have an impact on your key business practices.  Created/Revised/Reviewed: 9/21/99

Source: http://www.bockinfo.com/docs/benchmarking.htm