Benchmarking has its merits as a management tool when some conditions are met. Alas, the tool is often misused.
“Should we have a Facebook page?” “How many articles should we publish on our blog each month?” “Do we need to use video in our content mix?” These are three examples of very legitimate questions that companies will ask themselves and benchmarking is a popular way for companies to gain insights in “best practices” applied by their peers that might provide answers.
The 2017 Bain Management Tools & Trends Survey has benchmarking as the third most often used management tool around the globe (with a satisfaction score below the mean however). Benchmarking has been around for decades. It is one of four tools that already appeared in the 1993 edition of the Bain survey of 1993, it occupied the fifth place at that time. Ansgar Zerfass (University of Leipzig) focused exclusively on German communication managers for his survey on management tools and found out that benchmarking is the seventh most popular tool in German communication departments – no less than 84.8 percent of them have at one time made use of benchmarking.
The case against benchmarking
Although benchmarking can be useful in some circumstances, in many instances it will not offer the best insights into what course of action is recommended. In what follows, I list four issues with benchmarking in communications.
Competitors have disparate needs
Would you, being a single man and woman, compare yourself to a family with five children living next door to you when you had to decide on which new car to buy? Most likely, you would not. The same logic applies to benchmarking yourself against business competitors.
Different competitors can pursue different objectives and it is very easy making a mistake trying to uncover the objective a competitor is trying to achieve with any given measure. And even if you would be able to gauge correctly what your competitors are trying to accomplish, you will often still be left in the dark about their rate of success, which brings us to the next point.
Results obtained by competitors are invisible
At times, measuring whether a competitor was successful with a given approach is a pretty easy and straightforward process. Did certain types of announcements in press releases make for media pick-ups? A simple juxtaposition of press releases that have been sent out with the media coverage they acquired will tell you. Often however, things are not that simple.
Let’s say you notice that a competitor is more popular on Twitter than you are. The company does not only have more followers than you do, but also has more likes. The competitor is seeding lighthearted blog posts that really seem to hit the mark with its audience, but is it actually achieving any of its communication objectives? Maybe the competitor wanted the social media program to drive up traffic to the website and achieved a lot of engagement on Twitter but… never the clicks-throughs to the website it was after. Those conversions (or the lack thereof) are invisible to the eye of external observers.
You are aiming to match, not surpass competitors
Think about it. When you benchmark yourself against competitors you are actually using them as a reference point. This is an emulation game. But should you not be aiming to surpass them?
Let’s say a competitor performs well at recruiting Millennials through a recruitment campaign on Instagram. You might want to catch up with that competitor and emulate its approach. But what if there was another solution on the rise that is poised to become even more efficient at accomplishing the same objectives? By focusing on how you stack up against that one competitor you will not pay attention to the early adoption of a new (hitherto unimagined) solution by other companies and risk being beaten to the punch by those who are quick to adopt the next best thing.
The argument against benchmarking I just presented comes from a seminal article on evidence-based management from Jeffrey Pfeffer and Robert Sutton of Stanford University and so does the next one.
You are emulating the wrong things
Companies apply not one given measure but clusters of measures to achieve their objectives. Some of the measures taken are more visible than others. An outside observer will however not always have an easy time discerning what matters the most.
Pfeffer and Sutton share a telling anecdote about United Airlines. The airline company decided in 1994 to compete with Southwest in the California market by imitating the Southwest offer. A new service was created, called Shuttle by United, with separate crews and planes. The staff wore casual clothes and passengers were not served food. Seeking to emulate the quick turnarounds and enhanced productivity of its competitor, United Airlines increased the frequency of its flights and reduced the scheduled time planes would be on the ground. None of it reproduced however the very essence of Southwest’s competitive advantage and that was and still is today the company management philosophy and the priority it places on employees. The new service never took of (no pun intended) and Shuttle has been discontinued since.
Let’s translate things one more time to a communication context. When you see in a communication department a team be very productive and have regular off-site team building activities with overnight stays in forest cabins and kayaking down rivers, the latter might be a determining factor in the team’s success but it could also be that a third – confounding – variable is at play and that for example very mundane meetings with staff to discuss objectives and the way challenges can be tackled in achieving those objectives are the measure that truly laid the groundwork for success.
Good uses for benchmarking
I started this article by saying that in some instances benchmarking can be an appropriate tool for knowledge gathering. What conditions would now need to be met for a communications team to do well applying benchmarking?
A look at all the circumstances that will have benchmarking derail, offers an answer. If companies are compared with comparable needs, and if it is clear what measures they are taking to tackle those needs, and to which degree they are successful at this undertaking, and you are not in a situation where you are at risk of focusing too much on yesteryears solutions, then benchmarking can be the right technique to apply.
One example of such instance is the benchmarking of the headcount of communication departments facing comparable (enough) challenges at comparable (enough) companies. If such benchmarking would show you to achieve the same level of output of your competitors with a considerably higher headcount, you would know that you have an efficiency issue.
Did you enjoy this piece on benchmarking?
You might also like our interview with Philippe Borremans on the state of corporate communications.
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[…] might also like my piece on benchmarking where I warn against some of the dangers of relying too heavily on the technique in […]