Benchmarking: Avoid comparing yourself to the industry average.
Most people are familiar with the term ‘benchmarking’. It means finding a way to compare your company or yourself against what other companies in a similar industry are doing or have done.
Benchmarking has been deemed as the wrong way to approach business, because it pits one company against another. In order to put forth a successful product, you need to produce an excellent service that is able to stand on its own merit and not be compared with others in the same industry. This can be hard for people who feel like they are constantly compared, but if you really want your company/product/artwork etc. to be successful, you have to put in the hard work and do not compare it to others.
When comparing yourself with others, it is also important to remember that you are studying the wrong person. Another way of saying this is that comparing yourself with the industry average will never be a good thing because it means that you have no special traits or unique strengths that make your company stand out from those other companies. Even though there are hundreds of thousands, if not millions of companies out there, all with their own strengths and weaknesses, you should never compare yourself to an average company. There are always companies (good or bad) that have achieved success, and there are always industries that have had success. The important thing to remember is that there can never be any real average in the business world because it is filled with varying degrees of fortune and failure. As you go about your quest for a successful company, it is important that you do not compare yourself to others in your industry.
Rather than benchmarking your self against others, the best thing to do would be to create a list of qualities and values that you think make up an effective company and determine how good your own business is at having those good qualities. If you cannot determine what makes a quality company, than how can you compare yourself to others? If you do not know what good looks like and how to benchmark it against your current business, then you will never be able to accomplish the feat of being exceptional in your own industry.
The great thing about benchmarking is that it gives you a short-term goal to accomplish. You may not achieve all of the qualities mentioned above on your first try, but that should not stop you from trying. The fact that you are trying at all is progress in itself. Don’t compare yourself with other companies as they are going through their own journey and have their own unique strengths and weaknesses. Instead, try to study the qualities that are considered successful and determine what it is that your company lacks. If you can figure out where you lack compared to these successful companies in your industry, then you can strengthen yourself and become able to perform better than the average. That is a benchmarking success if there ever was one. You are doing yourself a favor by identifying what qualities make up an effective company in your field so that when you decide to raise funds for your business, institutional investors will see it as something that is a good investment because they will see the potential for success and reward you for it.
If you’re drawing a blank when it comes to figuring out what makes your company good or bad, then you should probably take a step back and study other companies in your industry. Just like any other field of study, this subject will require time and effort to learn. Researching the best companies that are your competitors is the first step in learning what works and what doesn’t work in your industry. Once you’ve spent some time studying others, you will be able to figure out where your company is lacking and how to make it better for those who want to invest in it.
In order to make this a reality, you must have a goal you are working towards. Identifying what it is that makes other companies successful will shed light on your own company and give you the ability to make it succeed. If you can figure out what qualities make up a successful company, then you can work towards creating those qualities in your business. Once you accomplish that goal, all of the hard work will become worth it, because whether it is through luck or through an industry that is consistently growing, success always follows hard work.
Article: The Real Value of Benchmarking: Avoid comparing yourself to the industry average.
http://www.entrepreneur.com/article/234669
Author: Jason Schemmel
Publication: Entrepreneur.com
Reprinted Date: January 22, 2013
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Benchmarking is the process of comparing one company’s practices and procedures to another company’s, in order to establish an organizational plan for improvement. While benchmarking is often used by companies in the manufacturing industry, it can also be used in other industries as well. For example, a food service company that styles itself as a high-end restaurant would benchmark against other high-end restaurants, while a food service company that styles itself as a quick-service restaurant would most likely benchmark against other quick-service restaurants. In both situations, the goal is to determine what others are doing in order to find out why they are better and how that can be applied to your own business.
Benchmarking should not be confused with another term, benchmarking, which refers to the process of referring back to a previous time period in order to compare a current situation with what was occurring at that time. This can be useful in certain situations, but is generally used by those who have never properly researched the situations of others before. For example, if you wanted to benchmark against several other companies for sales tax preparation services, then you would normally do some research into how other companies are tracking sales tax and when it is due.
Acquiring such information is relatively easy; all you need to do is contact the companies and ask them what they are utilizing. If you have never researched other tax preparation companies before, then your benchmarking would be limited to this process. This can be useful for some situations, but for the most part, it is best to gather information about how other companies are operating in your business sector. This will allow you to more easily replicate their practices and procedures within your own company.
Gathering such information is not an easy task; some people may tell you that it can only be done by obtaining a business degree from a school like Cornell or Harvard.
Conclusion:
Benchmarking is a very important part of the growth process. As we have seen, benchmarking is the act of comparing your company to others in order to determine what is successful and how it can be applied to your own business. If you are not actively pursuing this information, then you will never know what makes other companies successful or how they do it. The best way to gather this information is to begin by researching other companies in your industry and identifying what makes them successful. Then work on applying these ideas within your own business so that when you do find a need for improvement, you already know where it should be made.
“Who seeks for blessings will find them, as for burdens one must bear them alone.