Many SMEs feel they don’t have the time or capacity for benchmarking – it’s something they ‘intend to do’ when they are big enough/things settle down/the right senior execs are on board. But the benefits are often to be found much earlier than that.
Benefits of benchmarking:
• A complete picture. For many business leaders, maintaining a full picture of their enterprise becomes time-consuming and exhausts their capacity to manage. Where they individually lack skills, their business may become weak because they don’t have a 360 view of business performance. Benchmarking measures like for like inside and outside the business.
• Productivity focus. Areas of bad practice are identified without personal failure being part of the criteria – this allows for poor performance to be improved within departments, teams or even individuals.
• Solutions orientation. When a problem is identified, solutions are found through looking at other SMES, not through problem analysis which can lead to paralysis.
• Accelerated development. Knowing that another organisation has implemented a solution, found a fix or just moved forward means that another SME can see the value of their tested methodology – doubt is reduced and practical application is enhanced.
• Competitive advantage. Having external as well as internal reference points for performance stops an SME becoming self-referential and self-analysing – a common problem seen when an SME becomes ‘big’ in a small pool instead of aiming to be ‘big’ in a big pool. Cornering most of a small market may limit growth while looking competitively at market share in a large market may provide the impetus for creative competition.