Process benchmarking and sharing knowledge

Jonathan Bendit describes a system for sharing process information.

Most people understand benchmarking to be about so called "like with like" or "apples with apples" comparisons - the process of comparing and improving performance against the best or better practitioners. They often assume that such benchmarking is generally quantifiable, for example, time to build a car, numbers of passengers on ferries, trains on time, etc.

In reality, such straightforward benchmarks are both infrequently applicable and, in many cases, irrelevant to the process of identifying routes to performance improvement. Too often, companies benchmark in this way to "see how they are doing". The effect is to put them into a state either of comfort or despair. Either way, if their target is continuous improvement, using benchmarking in this way won't generate much progress. It is the underlying processes that determine performance.

Recent developments in benchmarking have taken the tool beyond the former relatively narrow applications. Benchmarking now provides companies with the means to learn techniques from one another, adopting and adapting systems that work. Far from being seen as "idea stealing", such mutual exchanges of data, information and know-how between organisations should be regarded as an important step in the process of continuous improvement.

For example, the Safety, Health and Environment Intra Industry Benchmarking Association (SHEiiBA) is one of the UK's best known health, safety and environmental benchmarking programs. Since its launch in 1997, over 150 companies have participated in the s_cheme.

SHEiiBA runs its benchmarking based on the beliefs that:

good practices can cross industry sectors - not every determinant of good performance is industry-specific

it is the processes - both management and technical - that drive performance

SHEiiBA began with support from six companies from diverse sectors - Lucas, Rolls-Royce, Courtaulds Chemicals, British Steel, Blue Circle and Kellogg's - who collectively formed the organisation's advisory council. They felt unanimously that SHEiiBA should not simply focus on retrospective performance data (accident statistics) and league tables, the obvious route to health, safety and environmental benchmarking.

Instead, it should provide safety, health and environmental professionals with a collaborative mechanism to compare processes and resources, share successful practices, network, and adopt know-how. They will also learn about one anothers' management practices, internal structures and technical expertise. Benchmarking shows how they are performing, enables them to learn from their peer group, and saves them from reinventing the wheel. The advisory council felt that sharing process information was the cornerstone of successful performance. Moreover, it saw a cross-sector approach as fundamental to broadening the learning scope. As a consequence, recruitment to SHEiiBA is assiduously pan-sector. There is no particular industry emphasis apart from a focus on companies with greater levels of risk.

How it works
The process of gathering and disseminating information in SHEiiBA relies on a software program, developed specifically for the purpose, called "Know-how Net". The program is generic, allowing it to be easily adapted for other benchmarking projects:

The tool works by asking all participants an identical set of questions via a screen-based questionnaire. The answers to this are pooled and delivered back to the companies, attached to a data browser so that users can search and manipulate the data, according to their needs

The questionnaire contains many qualitative questions such as: "What methods have proved effective in achieving successful employee ownership and self-motivation of health and safety issues?" and "What is your key environmental management challenge over the next two years?" It also asks quantitative questions on performance, focusing on accident statistics

Members answer the qualitative "open ended" questions in "free-text" response cells. Collectively, this produces a knowledge base of ideas and practices used in health, safety and environmental management, which members can access on demand. Accident statistics are presented as an anonymous league table of the latest years' injury incident rates. Participants' details are also provided, allowing for networking and for further, more detailed, benchmarking between individuals

The data is organised to help users quickly identify examples of successful practice, which can be built on with further one-to-one contact between participants. It is up to participants themselves to use the database and identify companies whose systems they wish to learn more about. Users can interrogate the database by clicking through the different companies' responses to one question or working through one member's answer "set". Sub-sets of participants can be created by setting criteria such as industry sector, emission type, etc, or by entering criteria such as "explosion" in a question on key hazards.

The result is that participants have the means to access highly relevant information for their needs that they themselves subjectively analyse and value, according to their own knowledge and experience. Such a score-less system worries some people, who consider league tables and the application of differing values as the only way to accurately benchmark. In reality, many practices which are fundamental to the success of any initiative are not easily or routinely measured, making quantitative comparisons virtually impossible.

Equally the best performers may rely on expensive technology beyond the scope of smaller players, making benchmarking against "the best" irrelevant. The concept of identifying better or "appropriate" practices is more applicable for most companies. In order to succeed in this, the net has to be thrown out far and wide, capturing as much relevant information as possible.--

John Bendit is a director of Corporate Benchmarking Services

Code of conduct
Benchmarking is a powerful tool in the quest for continuous improvement. To contribute to efficient, effective, and ethical benchmarking, the Confederation of British Industry (CBI) has developed a code of conduct for partners benchmarking with other organisations.

Principle of legality

Avoid discussions or actions that might lead to or imply an interest in restraint of trade, such as market or customer allocation schemes, price fixing, dealing arrangements, bid rigging, bribery or misappropriation. Do not discuss costs with competitors if costs are an element of pricing.

Principles of exchange

Be willing to provide the same level of information that you request.

Principle of confidentiality

Treat bench marking interchange as something confidential to the individuals and organisations involved. Information obtained must not be communicated outside the partnering organisations without prior consent of participating benchmarking partners. An organisation's participation in a study should not be communicated externally without its permission

Principle of use

Use information obtained through benchmarking partnering only for the purpose of improvement of operations within the partnering companies themselves. External use or communication of a benchmarking partner's name with their data or observed practices requires permissions of that partner. Do not, as a consultant or client, extend one company's benchmarking study findings to another without the first company's permission

Principle of first party contact

Initiate contacts, where possible, through a benchmarking contact named by the partner company.

Principle of third party contact

Obtain an individual's permission before providing their name in response to a contact request

Principle of preparation

Demonstrate commitment to the effectiveness of the benchmarking process with adequate preparation at each stage, especially at the first meeting.

Etiquette and ethics
In actions between benchmarking partners, the emphasis is on openness and trust. The following guidelines apply to both partners in a benchmarking encounter:

In benchmarking with competitors, establish specific ground rules up front, eg "We don't want to talk about those things that will give either of us a competitive advantage, rather, we want to see where we both can mutually improve or gain benefit"

Do not ask competitors for sensitive data or cause the benchmarking partner to feel that sensitive data must be provided to keep the process going

Use an ethical third party to assemble and blind competitive data, with inputs from legal counsel, for direct competitor comparisons

Consult with legal counsel if any information gathering procedure is in doubt, eg before contacting a direct competitor

Any information obtained from a benchmarking partner should be treated as internal privileged information

Do not disparage a competitor's business or operations to a third party

Do not attempt to limit competition or gain business through the benchmarking relationship.

chmarking

Know and abide by the benchmarking code of conduct

Have basic knowledge of benchmarking and follow a benchmarking process

Work out what to benchmark, identifiy key performance variables, recognise superior performing companies, and complete a rigorous self-assessment

Develop a questionnaire and interview guide, and be prepared to share these in advance if requested

Have the authority to share information

Work through a specified host and mutually agree on scheduling and jneet-ing arrangements.

Follow these guidelines in face-to-face site visits:

Short words to the wise

Keep it legal

Be willing to give what you got

Respect confidentiality

Keep information internal

Use benchmarking contacts

Don't refer without permission

Be prepared at initial contacts
www.cbi.org.uk

Probe
The CBI has four benchmarking tools, delivered under the name of PROBE -PROmoting Business Excellence. These benchmark manufacturing, service, environment health and safety, and management. Each takes a maximum of two one-day sessions and provides instant analysis, and a feedback report within two weeks.