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Obtaining the right focus is key to getting the most out of benchmarking. Often, companies fail to see the broader picture when measuring their own performance.
In the approximately 15 years since Xerox popularized benchmarking as a tool for improving performance, companies have regularly benchmarked a variety of business functions. In many organizations, it is not uncommon for the customer service, procurement, logistics, manufacturing, marketing, and human resources functions to each measure and benchmark their own performance. Each function picks the internal metrics—generally productivity- and cost-related—that seem most pertinent to its goals. They then measure overall performance against these functional metrics, and congratulate themselves when results improve. Given the esteem in which metrics are held, it is no surprise that they often affect organizational behavior. Many managers routinely operate their businesses against internally established metrics. Regardless of other outcomes, they generally are rewarded when performance improves, and are penalized when poor performance is evidenced.
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