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The great thing about business is that you don’t have to reinvent the wheel. There are literally thousands of textbooks covering every aspect of business along with a multitude of academic and business development courses and seminars that one can attend.

However, one of the easiest courses of study to undertake, is simply to keep your eyes and ears open as to what other businesses are doing. The term benchmarking simply means examining how other businesses operate.

Most benchmarking occurs on an informal basis. The result of constantly being aware of what’s happening in the market place. However I strongly suggest that you adopt a more structured approach to benchmarking to complement your casual observations.

I recommend benchmarking be included as a regular agenda item at your weekly team meetings. Even if there is nothing to report each week, at least it reminds your team of the importance and their responsibility to be as vigilant as possible about industry and market developments.

It is also important that benchmarking not be restricted to your own industry. Many great ideas that have been developed in one industry have been copied or adapted with great success by other totally unrelated businesses. Take for example fast-food drive-throughs. That idea can now be seen in operation at pharmacies, banks, car lubes, and recently I saw a video store with its own drive-through.

One of the ways you can benchmark your competition is to shop there. This can be done either by yourself, your staff, or by employing an outside mystery-shopping organisation. This way you can experience first hand how they do business. Get them to shop at your place of business as well. You might be quite surprised by the results.

The criteria to have listed on your assessment sheet includes; location, prices, product range, delivery times, payment options, point of sale material, staff knowledge and attitude, trading hours, the list goes on.

Another way to benchmark your competition is to interview businesses that are customers of your competitors. Ask them why they prefer to do business with them rather than with you. If you are in the passenger transport industry, surveying your own passengers will not provide you with the same information that a competitor’s will tell you. You may not like what they have to say, but at least you will know why they are not travelling with you. Only when you know can you do something about it.

The danger of benchmarking is that it is easy for companies to get lulled into a sense of false security because they convince themselves that they are keeping up with the best. But best compared to what? Best as in ‘as good as others’ or best as in ‘the best we can possibly be’.

As Gary Hamel and C.K. Prahalad say in their book Competing for the Future, "one doesn’t get to the future first by letting someone else blaze the trail". So don’t stop trying something new or different if your benchmarking has revealed that no one else is doing it.

Benchmarking is about keeping up with the pack; innovation is about keeping ahead of it.

Until next week, many happy customer returns!

Graham Harvey APS

Watch out for Graham’s new book Seducing the Vigilante Customer – winning strategies to guarantee the return of happy customers and healthy profits, available in all good book stores early in 2002.

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