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Strategy Spotlight: Benchmarking & Baselining Your Organization in 6 Easy Steps

You cannot conduct strategic business analysis or project management without benchmarking and creating a baseline. That is a fact.

I have seen times where executives and professionals skip this part of the planning process, thinking that they have all the information they need to document the current state. I have seen a lot of incidences where these people have been wrong and engage in a form of blame-storming when something was missed.

Related Article: Strategy Spotlight: 8 Common Strategic Planning Mistakes You’re Making

When working on a project, whether a pre-initiative or post-agreed, you need to focus on your benchmark and create a baseline to ensure you are clear about your present situation. A benchmark is a standard point of reference within your industry against which things may be compared or assessed. A baseline is the starting point used to compare your historical performance. Both are connected in the world of business analysis, sometimes interchangeable. The definition can change based on context.

Benchmarking became an important part of business performance management and a key input into financial analysis and business process improvement. It is also a powerful tool in change and transformation analysis forcing executives to look at the reality of the business through the facts. This is a practice that can become extremely uncomfortable for some people at times.

When I was thinking about this blog, I reviewed some of the steps that I have taken to benchmark a client’s internal and external situations. I realized that for me, benchmarking and baselining followed a standard 6 steps of activities.

1. Preparation

You will often hear me say preparation is the key to the success of any engagement. That is the truth in facilitation and in benchmarking activities. In this case, preparation has to do with your initial interviews and discussions with the leadership team to help you understand where their thoughts are at present, focusing on finding out ‘what, why this and why now.’ As part of this preparation, you need to know to what level the stakeholder is invested in the situation. Is it an emotional connection, being dictated from elsewhere or are they just stepping through the steps? This is all important to know.

2. Research

Getting the information you need is all about data collection. Information can be considered primary or secondary. Primary information is an account of the event from an original source. Secondary information is an interpretation of the account of the event.
There are many means of getting the information you need. I often use a three stage questionnaire process with the primary information holders and pre and post interviews to get a present state understanding for benchmarking. I expand my understanding by adding documentation reviews from inside and outside the organization.

3. Analysis

This is a key part of the pre-planning process often requiring information integration, leveling data and checking the sources and facts. You may need to normalize the data to ensure that a direct comparison is possible for operational subjects and issues. The analysis needs to provide comparisons, look at the gaps, cover all strengths and weaknesses, and be improvement focused. By this point you should have a clear state of the company, the project, the industry or application.

4. Presenting

This could be called reporting. It is just a matter of what the deliverable is. Prior to doing any planning type session (workshop, review, discussion), I do a summary of findings. This summary is laid out in such a way that the high-level stakeholders get a story of their present situation and is used for future planning. It is often delivered as a high-level, point form, executive summary with the supporting summary of findings behind it. It is not an extensive report – only a summary of findings. There is a difference. Accompanying a summary of findings might be a 6-slide deck using images to capture the data components.

5. Lessons

I have always liked the expression “forewarned is forearmed”. I think that is what lessons learned should be about, especially when we are doing benchmarking.

During the process, the business analyst should have gotten a clear picture of what I call the “truth”. The issues at play are known, and you should be able to pre-determine how things are going to play out and therefore plan more effectively. At a higher level, the best performing organizations share information and best practices for the benefit of all. If your baseline and benchmark are clear and honest, then you can start to focus on solutions and actions that need to be taken.

6. Actions

It is great to use the word “actions”, but it should not come before planning. In other words, “plan to act” with a well thought out implementation or action plan. This can only be done after the lessons have been accepted, integrated into the key stakeholders thinking (planning team) and the lessons learned can feed into the planning process.

The focus here is what you need to do to go forward based on your benchmark and baseline for your organization with all the common constraints. Dialogue should be forthcoming.

I can’t even remember the number of times that I have been part of benchmarking an organization or system through a combination of interviews, surveys, documentation, industry reviews, and workshop facilitation. I’ve participated in all of these activities just to get a clear picture of the state of things.

I do believe the process can be standardized and applied to any situation where getting clear on the present state is important and benchmarking to internal or external standards.

Developing good benchmarking and baselining skills is important. Chances are you will find yourself following a very similar process each time. I would encourage you to document your approach and share it. It is the place where good business analysis and planning starts. I hope this helps.

And remember:

Be your best, invest in the success of others, and make your journey count.


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