How Social Media is Redefining Benchmarking
How Social Media is Redefining Benchmarking
Social media is forcing companies to re-examine their benchmarking goals, processes and
culture. Can benchmark partners be recruited online? What can be benchmarked online, and
with whom? How open can an organization afford to be?
The evolution of benchmarking
Benchmarking emerged as a business practice in the 1980's and has been steadily adopted
by companies around the globe.
Over the years, companies have developed their benchmarking methods and business
analysts have published theoretical frameworks about benchmarking. Today, benchmarking
is commonly viewed as a systematic way of identifying the highest standards of excellence
for products, services, and processes by comparing these across companies.
Benchmarking used to be about hard data such as manufacturing output, profit per square
foot and number of employees per sales dollar generated. These were useful as
performance metrics for balance score cards.
The current school of thought is much more qualitative. Companies want to benchmark
themselves against best practices from within, and outside of, their industries. It is less
engineering oriented and now more people oriented.
Along the way, companies also realized that they should not only investigate how good the
best-in-class companies are, but also how they got there. Successful benchmarking requires
finding the root causes of superior performance. While it is useful to start with general
knowledge about what other companies are doing, the ultimate goal is to find out how they
manage to do it.
"Enabler" is a benchmarking term that refers to the underlying drivers that enable superior
performance, such as products, processes or resources. Identifying enablers' takes much
more time and analysis, but is an important part of benchmarking. Doing so can help
companies address the challenge of implementation at their own companies later on.
Social media allows for greater access to information on enablers than ever before.
The impact of social media
Social media has changed the way benchmarking is conducted.
A lot more information is available on professional and social networks nowadays, which one
would never have dreamt of just a few years ago. As a result, new additional sources of
information and channels for data collection have emerged.
Social media has also given companies communication tools that make it unnecessary to
travel and engage in fieldwork as more of that work can be done on-line. As a result,
benchmarking has become less expensive.
Benchmarking is becoming more process-oriented and social media supports this. It has
lowered the threshold for companies to benchmark each other and has changed the
benchmarking process from a one-time event into a continuous iterative process.
In addition, the benchmarking team can be expanded and adjusted at any time.
All sorts of companies are experimenting with different benchmarking approaches through
social media as a result.
Social media tools in benchmarking
There are many social media tools publicly available that can be used for facilitating the
teamwork of a benchmarking process:
LinkedIn (www.linkedin.com) is a widely used networking service that also provides
tools for group work and collaboration.
Twitter (www.twitter.com) is a short-messaging service that also enables
benchmarking team members to create user accounts, connect and communicate
easily with each other.
Facebook (www.facebook.com), while being more targeted at consumers rather than
businesses, also provides many of the same tools as LinkedIn or Twitter.
YouTube (www.youtube.com) is a video-sharing website on benchmarking team
members can upload, share, and view videos.
Slideshare (www.slideshare.com) allows benchmarking team members to upload and
share publicly or privately PowerPoint presentations, Word documents and Adobe
PDF Portfolios.
Photosharing sites give benchmarking team members the ability to share
photographs.
Wikis are is websites that allow the easy creation and editing of any number of
interlinked web pages via a web browser. They are useful as platforms for developing
shared knowledge and profiles.
What to benchmark
Over the years, companies have shown a great amount of creativity in choosing what part of
the business to focus on when engaging in benchmarking activities.
1. Products and services
One very common and natural starting point is to focus entirely on the output of the company
and to benchmark products, services or the entire offering of a competitor. Product
benchmarking improves the general understanding of one's competitive position in the
market and can be based on secondary research to a large extent. For service companies, it
is more difficult to benchmark the offerings of competitors, as services are not as easily
measurable as tangible products. Successful benchmarking of service offerings therefore
often requires a fair amount of interviews or field research.
These days, product or service reviews and benchmarks for certain industries are available
on forums and blogs.
2. Financial performance
Benchmarking pure performance measures may not solve any fundamental issues of
competitiveness but it helps to quantify what can be achieved and what targets to set.
Benchmarking financial performance can often be done at relatively low cost using publicly
available information, some of which is listed online.
3. Processes
Benchmarking processes are common due to their structure and efficiency. Processes are
important because they represent fundamental enablers of competitiveness. It is often the
case that two companies will have access to the same resources and customer base but the
one who has been able to set up better processes, is able to deliver better quality at lower
costs.
However, collecting information about competitor processes is not easy as it may require a
substantial amount of primary research. When benchmarking processes, competitors are an
obvious but not the only choice of benchmarking partners. It is often fruitful to tap into
information sources throughout the competitor value-chain, including suppliers or
distributors. Valuable insight can also be gained by benchmarking companies in other
industries.
Social media has in particular, changed the way companies look at cooperative
benchmarking, where business executives meet with direct or indirect competitors to
exchange information on in-house processes, visit each other's premises to observe each
other's operations and discuss challenges and best practices. Today, many cooperative
benchmarking exercises are initiated over professional networks such as LinkedIn.
Moreover, much of the interaction between benchmarking partners can be done on-line,
making it less expensive and more efficient.
4. Strategies
Making good strategic decisions requires knowledge of competitor strategies. Nevertheless,
like processes, strategies are not easy to analyze. There is a lot of information about
strategy that can be obtained from public sources but many aspects of a company's strategy
are never publicly communicated. In spite of this, it is still possible to conduct successful
benchmarking of strategies by using primary research.
It is sometimes possible to get a hint of a company's strategic direction by the business
related blogs and networking forums its employees participate in.
Companies can also pull out material from YouTube in order to increase the knowledge of
the competition they are benchmarking against. One automotive company features
competitor commercials taken from YouTube as the opening screen of their intelligence
portal. This is to help their staff see what their customers watch in different markets, and
encourage them to think about how they can position their brands.
5. Functions, teams and organizations
Benchmarking is not only about finding out what other companies do, it is also about how
they manage to do it. Therefore, investigating how another company is organized is a
common theme in benchmarking. This may involve any aspect of a company's organization;
what functions or teams it has set up, what divisions or business units it has, how many
people are working in each and so on. Organizational benchmarking may go as deep as
profiling individuals.
Using social media such as professional networking websites has proven to be a new and
very fruitful source for this type of benchmarking activity. It saves the costs of fieldwork and
expensive primary research, and may reveal a lot of valuable information with relatively little
research.
Challenges
Utilizing social media is not without its challenges.
The new tools make it easy to expand the team involved in the benchmarking process at any
time but this puts more stress on the management of the benchmarking team, as new team
members need to be brought up to speed with the developments.
While the tools provided by social media would make it easy to allow team members to join
and leave at any time, and carry out the benchmarking process with greater freedom, it also
means that the commitment of team members will vary and the full benefits from the
benchmarking process will not be seized.
Information security should also come under special scrutiny when using social media.
Although on-line groups and collaboration tools are safe and private in theory, whenever
information is uploaded and posted on websites, there is the risk of information leaks. One
way to minimize this risk is to use online tools for live communication such as voice calls or
chats.
Ultimately, the most essential part of any benchmarking process is to act on the information
gained. Social media can help galvanise benchmarking but it is the implementation of
changes and improvements in order to reach the high standards identified that is the biggest
challenge.
This article and others from GIA's Consumer & Retail practice can be found at Global Intelligence Alliance industries.
Understanding Key Differences and Similarities When Testifying in Mediations, Arbitrations or in Court Traditional Media Obsolete by 2030? The Media Underground How To Prevent Premature Early Ejaculation Immediately Competitively Priced Dell Sdlt-1 Tape Media Solution What is a HDD media player? Making The Most Of Media Placements Be The Media Creating And Accelerating Your Message Scoring Heroic Media Buzz For Your Charity Event Brett Favre says He Spoke to Vikings Teammates About Media Leaks New Media - Old Rules. How one quick quip can destroy your reputation Sand Filter Media Seo Media and Its Ramifications