In a constantly evolving world, we (especially business owners and professionals) have to find ways to keep up with it all without falling off our feet. It's important that we not only keep moving with it, but we must do so in a way that also allows us to grow and be better individuals and businesses. We won't last long and reach our fullest potential if we go with the flow of things. We all know that working towards our best versions is a better way to spend our days. This is where our topic of conversation today comes in: Benchmarking. Read on to discover how we will define benchmarking, how benchmarking in business works, and how it actually helps the business grow.

What is Benchmarking?

Let’s start with the explanation of the benchmarking meaning. Simply said, benchmarking in business refers to a process done by all business organizations and companies to evaluate a certain part of the business. We can define benchmarking as checking and measuring some key performance indicators or certain steps in a process and comparing it to a predefined standard. The benchmarking definition can get really deep when you really get into it. Still, it truly is just like taking a look at what you have in your purse and checking your shelf (or another's shelf or even purse) and seeing the potential of having more - or seeing something you realize you have to get rid of. Nevertheless, all it really is a way for you to examine your business on an internal and external level and realize the necessary actions you have to take next.

Not everybody is aware of this, but there are actually different types of benchmarking, each with its own benchmarking meaning or purpose. Let’s take a look at each of them:

  1. External Benchmarking. This is the most common and well-known type of benchmarking. Actually, it is frequently what holds superiority above all other benchmarking definitions and methods. On that note, the external benchmarking process simply compares different competitors’ standing, performance, endeavors, etc., with your very own. And this is not to copy or replicate what other companies are doing. On the contrary, this type of benchmarking in business is meant to do better than they are doing or to completely innovate and do all the things they aren’t doing (or couldn’t do). While the constant comparison is never a good thing because it leads to burnouts and inevitable awful pits in your stomach, little friendly competitions never really hurt anyone.
  2. Internal benchmarking. This next benchmarking definition is all about the inner circles of your business and your organization. It is imperative for us to not always look outwards. It is vital that we also really learn and grow from within. And the only way to do that is to see what’s happening inside. This is a good benchmarking management technique because it lets you see how your internal departments and groups are doing and how it all comes together. This will help you evaluate your business performance based entirely on what you are doing and assist you in coming up with ways to improve that business performance.

Collect Internal Data

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  1. Performance Benchmarking. The benchmarking meaning of the next two types of benchmarking revolves around the kind of data collected and used in the process. With performance benchmarking, you will collect quantitative data - numerical data and metrics about your performance. This is most helpful when you want to narrow down certain business or organization performance gaps. In this type of benchmarking, you collect and analyze key performance metrics and indicators and look at what you are statistically doing best and what you can be statistically doing better. You can then work your way up to maintain everything you should and improve those you have to.
  2. Practice Benchmarking. Moving on towards the collection and analysis of qualitative data. Compared to the previous benchmarking process, this benchmarking defines the processes and approaches that the organization is doing. It describes how the business’s whole process works and helps you dig deep and understand how each step and task impacts the whole process. It enables you to gain insights into how and why the performance gaps identified in the previous benchmarking process happen and their best performance and resource management practices.

Franklin scholars benchmarking

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Benchmarking Process

1. Look and Evaluate Considerations

The benchmarking process starts with looking at the different factors in your operations and your business performance. It is vital to the entire process that you first identify what it is, precisely the step, aspect, strategy, product, or service that you are trying to evaluate and look into. And while it can be a general benchmarking process that encompasses the entire company, the fact remains that it is vital to lay down the metrics of the goals you want to achieve. This is the step that will inform the rest of the process. Thus, to really stay true to the benchmarking meaning, you have to really be prepared. You must make sure that you have enough time and resources to continue with this endeavor.

Consider, Collect, Plan

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2. Extract Information and Plan

The next step in the benchmarking process is to actually start collecting the data that you need. This is where you get really specific - more specific than you were in the previous step. This part will allow you to carefully lay down all that you need to do to achieve the exact benchmarking definition and purpose. This is where you will start to do certain tests to get the information you require. Of course, that would mean that you also have to assign a particular team of people to help you accomplish what you want to achieve. And then, with all the considerations organized and appropriately categorized, you can now really commit to a specific plan of action to use as you go about the benchmarking process. Take note that you may have to go outside of your organization to achieve all of these.

3. Analyze the Data Collected

Once you collect the information, you don’t just let it sit on your table or your computer storage and let it rot. Of course, you have to really read and learn from all the data that you collected. This is the part of the benchmarking process wherein you will contextualize and synthesize all of the collected data. This is where you will be able to identify and understand the best practices or assets, resources of your business or organization, and the gaps in the operations and performance. Do not be discouraged when you identify multiple rooms for improvement. Instead, take a close look at it and try to realize and analyze what is necessary to really grow into a successful business.

4. Remember the Important Things

Always come back to your core. When undergoing the whole benchmarking process, you have to constantly keep in mind your primary purpose. You should never look away from who you are and what you set out to do when you established and did this business in the first place. This will help you narrow down the kind of steps you wish to take after the identification and analysis of data you collected is finished. Your core value, your mission, your vision, and your objectives are what makes your company known and loved - don’t let go of it just for the sake of improving a particular factor.

Mission of the Company

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5. Never Stop Adapting

Benchmarking is not a one-time thing. It is not a process that ends once you finish all the steps you listed down initially. Because perhaps the last and most vital part of benchmarking management is to apply all that you have learned so far to your operations and daily activities. It's keeping up with online trends when they arise, it's moving on from certain things when they no longer serve you well, and it's constantly essentially doing a bit of benchmarking each and every day. While it is always important to have a plan, keep in mind that each of the actions you do must keep up with all the changes in your environment and organization and with all the core values and goals you set to accomplish. If you cannot adapt to it all, you will be left in the dust of all the other businesses that do.

There are many tools and strategies that you can utilize to properly accomplish the whole benchmarking meaning. It's not going to be easy - growing to be better will always be a rough and challenging road. But with the proper guidance, the right partners, and the determination to keep on going, you will be surprised at how far you'll get and how amazing you will grow. Let Strikingly be one of the right "ones" for you and your business. Sign up now and let us help you become the best version of yourself.