The cost of not knowing

I am exposed to organizations doing some very innovative things with their organizational processes. They are state-of-the-art in managing leveraging process-improvement tools, such as Lean, Six Sigma, or other homegrown or hybrid improvement methodologies. They focus a great deal of effort in refining processes, better managing processes, and/or reducing waste from their organizational processes.

I also get another unique perspective. My organization is very active in helping organizations execute process benchmarking activities. Believe-it-or-not, most organizations new to the process journey are investing significant time (and cost) into their chosen approach and tools with very little (if any) understanding of what others, outside their organization, are doing. They wing it, at least early in their process management maturity.

Flip a Coin

Good decisions start with either luck or credible data. Benchmarking helps with the latter when done correctly. Outside of that, you might as well flip a coin at each decision point. I understand that there is usually a LOT of experience in the room when these early decisions are made, but it still perplexes me the number of organizations that don’t conduct at least some cursory examination of outside information. I think it ties directly back to the inward focus of many of the improvement methodologies.

Most of the best-know improvement methodologies focus on the performance of a process related to past performance or a theoretical ideal level of performance. Refining it over many iterations of making changes, watching, adjusting, measuring, changing, etc.; the classic PDCA cycle. The vendors supporting these approaches will talk about external learning, but seldom build it into their approach. It has been my experience that this only happens in the best-of-the-best organizations.

And they tend to be the best because they are able to achieve breakout results not focused on an inwardly-focused “get better than last time” approach. Their view is that of “how can we totally change the way we do this,” instead. They are more mature in their benchmarking and it increases their ability to improve their organizational processes more quickly and mitigate the risks associated with their efforts.

Everything Old is New Again

It seems like every 3-5 years, benchmarking will reemerge as a “new” idea. I was involved in my first ever “tweetup” focused on benchmarking just a couple of weeks ago. There are new and different approaches that emerge, and very different levels of benchmarking capability. Some organizations have very formal processes, while some take more organic approach. But, they do have some things in common. Primarily, a focus on learning externally.

We’ve developed an online assessment to help our members understand their benchmarking capability. If you’d like to better understand your capabilities and see how others use benchmarking results, please feel free to take the assessment.

I’ll definitely report more on this topic in the near future.

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Categories: BPM, Continuous Improvement, Disruption, ERP, Innovation, Learning, Process Management, Strategy

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