How do you perform against your competitors? How do the results of your key performance indicators compare against similar businesses? Are you measuring the right numbers?
Benchmarking can be very informative and support your key decision making. It can also provide you with a focus for small changes that can then lead to a big change in your performance.
From our experience, it will also validate your assumptions by highlighting if you have had a good or bad year compared to others in your industry. Thereby this avoids any guessing or reliance on your gut instinct.
So from our experience here are 12 advantages of benchmarking your business:
- Understand your profitability in comparison to your competitors and better understand what makes your company successful
- Gain an independent perspective about how well you perform compared to other companies
- Compare your performance for industry related key performance indicators (eg financial ratios) to identify areas for improvement and their priority for attention
- Establish realistic targets based on factual information for your industry
- Produce information to help you hold your people more responsible for their performance and enable a mindset and culture of continuous improvement
- Competitor monitoring that helps the business to avoid any complacency
- Review your cost of labour vs the industry average as an indicator of operational efficiency
- Help you clearly identify specific areas of opportunity for discussion based on data rather than assumptions or emotion
- Minimise any resistance to change, by creating an evidence based direction to support your call for action
- Helps you identify not only what is good performance, but how you can be a market leader
- Keeps you focused on the right numbers that make your business work
- Simplifies business processes, reduces waste and develops a better understanding of your business
Benchmarking is just one of the eight steps of our Business Mentoring Programme. For more details, please see https://crmoxford.co.uk/Services/Business-Mentoring-Programme