Innovation Insight Series Number 4

http://www.psu.edu/president/pia/innovation/

Benchmarking for Innovation and Improvement

Why benchmark? With whom can you benchmark? What can you bench-
mark?
There are three types of benchmarking:
Benchmarking can help you…
• Process benchmarking involves identification
• Analyze and improve your processes. of best practices.

• Enhance performance. • Strategic benchmarking involves identifying

emerging trends in a market or industry for
• Gather the information you need to assess your strategic or resource planning.
present and plan your future.
• Comparative benchmarking is results oriented,
• Identify some better approaches to accomplish and can be useful in setting stretch goals.
your mission, vision, and goals.
How can you deal with resistance to benchmarking?
Your organization may be doing well. The common
Starting a benchmarking effort perception may be that you’re one of the best, and no
one else provides exactly the same functions, services
What is benchmarking? or products that you do. However, while each unit and
Robert Camp (1989) defines benchmarking as “the organization is unique, we share processes with other
search for those best practices that will lead to the organizations, there is always the opportunity to be
superior performance” of a unit or organization. It can better, and someone else may just have a better way to
help you to find effective practices at other organiza- do it. Your unit also needs to be able to meet the rising
tions for services in which your unit is not providing expectations of those who receive your products or ser-
the level of quality, satisfaction, or efficiency you vices.
would like to see. The emphasis is on studying the
practices and processes of recognized leading organi- How does benchmarking relate to strategic and unit
zations to find out how they do what they do, rather planning?
than gathering results and ‘bottom line’ data and trying Benchmarking can be part of the initial stages of plan-
to match or beat those. ning, as you assess current performance and set goals
for improvement. It can also be part of the accom-
Benchmarking is not limited to the collection of num- plishment of strategies, as you study outstanding
bers and comparison of averages, nor is it a one-time organizations for alternative approaches to how your
effort. It’s not a test to see whether your unit is meas- unit does its work.
uring up. It’s a means to gather information and then
target areas and processes for improvement. • Internal benchmarking involves collecting
©2007 The Pennsylvania State University
This material has been developed by and cannot be used or reproduced without permission of the Office of Planning and Institutional Assessment, The Pennsylvania State University.
 Benchmarking for Innovation and Improvement
Innovation Insights #4

comparative data from similar units within Phase One: Identifying and examining your own
your organization. While this may be the easi- processes.
est, data may be limited.
• Which processes are most critical to your
• Benchmarking with competitors involves com- success?
parison with similar organizations in the same
field. Data collection may be difficult, but • Which processes provide the greatest opportu-
American Productivity and Quality Center’s nities for improvement?
Benchmarking Code of Conduct (see Addi-
tional Resources below) may facilitate the ex- • How are these processes currently performed?
change of information. Can you map the processes?

• Functional/generic benchmarking involves • How is the performance of these processes cur-

gathering information from an organization rently measured? Can measures be developed
with the same or similar processes, although if they are not currently in place?
the organization may be in a different field.
An example of this could be comparing how Phase Two: Identifying the organizations with which
your university unit provides some of its you will benchmark, and how data will be collected.
services online with how a bank provides • What organizations or units are known within
some of its services online. your professional network or field as highly
effective in regard to the services, products, or
What are the options for collecting benchmarking processes you would like to benchmark?
data?
While often we think that personal, face to face con- • What organizations have been recognized pub-
tact is necessary to benchmark, that is not always the licly for their accomplishments in the services,
case. Much information you are seeking may be avail- products, or processes you would like to
able publicly, in news, trade, or professional journals, benchmark?
annual reports, or online databases. If you are gather-
ing new information personally, you may be able to • What questions would you like answered based
collect it through mailed written surveys or telephone on your analysis of your own processes?
interviews. If you gather new information, it is critical
that you agree at the start regarding the confidentiality • Do you need personal contact to get these an-
of the information, and you may want to plan a way to swers, or can it be provided in writing?
share the information gathered with all of your bench-
marking partners. Phase Three: Collecting and analyzing the data.
Once data is collected, the task is to compare perform-
ance levels and practices, and identify performance
The phases of benchmarking gaps in your organization.
• Where are the similarities and differences in
Like many other organizational initiatives, effective
practices and processes?
benchmarking begins with preparation, and moves
through several phases.
• What can you apply or adapt in your unit from
the other organizations’ approaches ?

©2007The Pennsylvania State University

This material has been developed by and cannot be used or reproduced without permission of the Office of Planning and Institutional Assessment, The Pennsylvania State University.
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 Benchmarking for Innovation and Improvement
Innovation Insights #4

• What ideas for new approaches, services, or • A willingness to learn from others
products are triggered by what you learn about
other organizations’ approaches? • A long-term approach

Phase Four: Establishing targets to close the gaps

and developing action plans to reach those targets. Additional Resources
• What are your future performance goals and
measures for the targeted processes? American Productivity and Quality Center and Bench-
marking Code of Conduct. http://www.apqc.org/
• What innovations or improvements do you Retrieved October 5, 2007.
want to implement to reach these targets?
Camp, Robert C. (1989). Benchmarking - The Search
• What support or challenges exist for these for Industry Best Practices That Lead to Superior
changes? Performance. Milwaukee, WI: ASQC Quality Press.
• Who should be involved in planning and carry- Camp, Robert C. (1995). Business Process Bench-
ing out this implementation to maximize its marking: Finding and Implementing Best Practices.
success? Milwaukee, WI: ASQC Quality Press.
Phase Five: Implementing the action plans and McNair, C. J. CMA, and Kathleen H. J. Leibfried.
tracking progress toward the goals. (1992). Benchmarking: A Tool for Continuous Im-
• What are the milestones for implementation? provement. Essex Junction, VT: Omneo Oliver
Wright Publications, Inc.
• How frequently should you measure perform-
ance? Monthly? Quarterly? Are there sea-
Patterson, J. G. (1996). Benchmarking Basics: Look-
sonal or semester variations?
ing for a Better Way. Menlo Park, CA: Crisp Publi-
One of the biggest risks is having too many bench- cations, Inc.
marking partners and collecting too much information.
One approach is to first gather preliminary informa- Spendolini, Michael J. (1992). The Benchmarking
tion from a larger number of prospective partners (a Book. New York, NY: American Management
broad approach), and then use that information to Association.
identify a smaller set of partners with which to
examine key processes in more detail (a focused
approach). United States National Institute of Standards and
Technology, and Baldrige National Quality Award.
Another challenge is to plan your benchmarking effort http://www.nist.gov/ Retrieved October 5, 2007.
so that you have a quick turnaround from collecting
data to setting goals.

For a successful benchmarking effort, include:

• A systematic, carefully defined approach

• A candid assessment of your own organization

©2007The Pennsylvania State University

This material has been developed by and cannot be used or reproduced without permission of the Office of Planning and Institutional Assessment, The Pennsylvania State University.
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 Benchmarking for Innovation and Improvement
Innovation Insights #4

For more information, contact the Office of Planning

and Institutional Assessment at 814-863-8721 or
psupia@psu.edu, or visit our website:
http://www.psu.edu/president/pia.

The services of the Office of Planning and

Institutional Assessment are provided free of charge to
The Pennsylvania State University and are adapted to
the specific needs of departments or individuals.

Revised October 2007

©2007The Pennsylvania State University

This material has been developed by and cannot be used or reproduced without permission of the Office of Planning and Institutional Assessment, The Pennsylvania State University.
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