Page 133 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Total Quality Management

Notes Lawler & Worley, in Built to Change, articulated a major temptation for organisations to
“institutionalise best practices, freeze them into place, focus on execution, stick to their
knitting, increase predictability and get processes under control”. These ideas are all
premised on stability and consistency as the keys to effective performance. Organisations
are positively encouraged through the deployment of models and templates to support
enduring values, stable strategies and bureaucratic structures, not to change—in short, to
set best practice in aspic!
So how do organisations overcome complacency and inertia? My favoured way is
benchmarking, i.e. learning what others do and the appropriate application of that learning
to your own organisation in order to improve performance. A simple definition is:
benchmarking = comparative analysis + improvement action.

Benchmarking activities are either informal or formal. The former, most of us do
unconsciously and is the constant comparing and learning from the behaviour and practices
of others. This learning can come from talking to peers within your own organisations,
consulting with experts, online and face-to-face networking with people from other
organisations, or using online databases that share benchmarking information.
Informal benchmarking remains extremely popular for effective performance
improvement. Recent research among the Best Practice Club’s membership indicated
common key areas of focus in operational efficiency, cost management, employee
engagement in difficult times, and the environment. All respondents stated they would be
carrying out benchmarking in the next 12 months to help them address those areas of
focus and the vast majority of that benchmarking would be informal. In a typical year the
Club receives around 150 benchmarking requests of all types and well over 90 per cent of
all delegates attending Club workshops state they will make changes to their organisations
as a direct result of their attendance. I suggest that in today’s challenging economic climate,
such cost effective methods of performance improvement will be even more popular.

As for formal benchmarking, there are two types: performance and best practice. In the
vernacular, the first is about ‘what’ and the second is about ‘how’.
Performance benchmarking is the comparative analysis of key measures of performance
from similar activities and, if that analysis reveals shortcomings in performance, can
often be a very good ‘driver for change’. Unfortunately a significant number of
organisations consider this comparative analysis to be all that’s involved in benchmarking
and thus do little more than collect ‘league table’ information about themselves, carrying
out any improvement projects as separate and detached activities. This situation can often
be found in organisations where ‘politically’ or ‘regulatory’ defined measures are used by
external stakeholders to judge their performance. The risk that is run here is that of a
disconnection between the impact of the improvement interventions made and the defined
measures. Another common occurrence in such cases is the inordinate amount of time and
effort that is put into ensuring the measures used are consistent across the reference group
used, i.e. the perennial problem of ensuring ‘apples with apples’ comparisons.
Best practice benchmarking, as defined by the Centre for Organisational Excellence Research
(COER), is: “The comparison of performance data obtained from studying similar processes
or activities and identifying, adapting and implementing the practices that produce the
best performance results.” As such, it is an extremely powerful process improvement
methodology. However it should be noted that this type of formal benchmarking is
resource-intensive and typical projects take from two to four months to identify best
practices. Given the level of investment, care must be taken to ensure project focus is
aligned with strategic intent and maintained throughout its life.
Contd...

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