Whatever various individual pursuits a business is undertaking, ultimately, they are all part of the same, broader pursuit; the pursuit of continuous improvement. Profits, customer service, employee engagement, supplier relationships, IT infrastructures, for a company to thrive each element of the business must always be subject to analysis of how improvements can be made. One of the many upshots of continuous improvement is enhanced stakeholder loyalty, an essential component of any business model.
However, achieving continuous improvement can be a difficult endeavour. One of the ways businesses do manage it successfully, increasing stakeholder loyalty along the way, is benchmarking.
What is benchmarking?
Essentially, benchmarking is the process by which an organisation attempts to understand and evaluate their current position in relation to established best practice and to identify areas and means of performance improvement. Rather than looking inwards at ways of achieving this performance improvement, benchmarking is an outward-looking process. That said, first steps must begin inhouse. You must first be secure in the knowledge of your own stakeholder position through dedicated listening sessions, experience and outcomes measures, and employee feedback about service. Following this crucial first step, one must begin examining the successes of other organisations and sectors at a local, national, even international level.
When the keys to these successes are identified, the organisation can begin implementing them themselves as a reliable means of attaining improvement. Stripped to its basics, the benchmarking process consists of five main steps:
- The organisation accumulating a thorough understanding of its current practices and processes
- Accumulating a thorough understanding of the practices and processes found within other organisations and/or sectors
- Comparing the organisation’s performance levels against these other organisations/sectors
- Implementing the necessary changes to try and replicate these successes
- Constantly reviewing both progress, and other benchmarks to provide further comparison
How does it create stakeholder loyalty?
A comprehensive benchmarking process seeks improvements in all areas of an organisation, and each area will have stakeholders of its own. It’s perhaps useful to look at some examples of stakeholders within an organisation, and how a benchmarking program can breed loyalty amongst each.
Employees: An enormous draw for any workforce is having the belief that their employer has their best interests at heart and is always looking for ways to develop them and improve their working experience. Introducing new and better employee processes and structures as a result of a benchmarking process increases engagement, overall satisfaction, and thus loyalty.
Customers: Achieving customer loyalty primarily rests on two factors: the customer believing they are getting value for money, and them always being in receipt of great customer service. An organisation that is able to improve the quality of both its product and service levels can expect a greater degree of loyalty. Both can be dramatically improved by adhering to a benchmarking program.
Suppliers: The expectations of suppliers are, like customers, straightforward to meet. They want to feel like they’re getting properly remunerated for their service, can always reach someone when there’s an issue, and are dealing with a reputable organisation. Benchmarking can lead to improvements in all three and thus enhance a supplier’s loyalty.
Shareholders: Though shareholders often take an interest in such areas of an organisation as employee welfare, ultimately, they want to see return on their investment. The overriding intention of any commercial organisation is increasing profit margins and providing this return. An organisation that implements a benchmarking program which leads to increased returns for shareholders, also strengthens the shareholder’s loyalties to it.
Market perception: Or, in other words, your company’s potential employees, customers, suppliers, and shareholders. By raising standards and performance following a successful benchmarking program, brand sentiment, the perception of being ‘A good place to work’, and commitment to social and environmental responsibilities are all enhanced. As is the company’s status in the business, public and political world.
Getting the right help
The more thorough a benchmarking program is, the more compelling the results. However, the more thorough the program, the more complex it becomes. If benchmarking is a process you wish to deploy as part of a drive towards improvement, it is advisable to recruit a third party with a track-record of expertise and delivery.