AlwaysWoW! For a Great Great WoW in Life

Thoughts from me about things that are cool, that are WoW, that blow me away. Observations about businesses and people from a wide variety of life. Daily encounters - and thoughts outside the box, inside the box and without any box. New thinking, and challenging old thinking. Passionate about life, about respect, and about integrity.

Sunday, July 13, 2003

About Benchmarking

All over the place, one can read about benchmarking. Benchmarking basically means that a corporation (or even an individual) would compare a practice deemed valuable and successful elsewhere and tries to implement those in his/ her own corporation or business department. This reaches across sectors or industries. For example, a GE in the US might see practice in a Walmart that it wants to emulate. The basic driver behind this is the urge to become better in this specific segment. This is fine. As long as there are certain situations taken into account for which make a company unique:
• Namely the culture in which the company operates – how to compare a US corporation with one, that operates in Indonesia, or Vietnam?
• The strategy of the company – is the one company it is comparing itself with, actually serving the same segment in its own market? A telecommunications operator in China would like to compare itself with one in Germany – same segment? Males, females? Strata? And so on
• The internal culture of a company – a bit more a tricky question. But may be the history of a company and how it earlier approached change situations, should be considered. It cannot be expected that a company that traditionally was more conservative in its market approaches suddenly revamps itself and becomes a high risk company that ventures into a new market with great entrepreneurial strikes

The conclusion is thus that benchmarking is more difficult to approach. It is not enough to take some ratios – value added by employee or operating expenses to sales revenue and says that my company should get to the same level as this company just because their ratio looks better. Clearly, more research would be needed.

But benchmarking is useful, if one looks at individual processes – such as how one company is identifying high performing talents, organising its successor issues, partially even compensation – but, to repeat, it is important to keep a company unique and consider its background, future, market approaches and many other issues.

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