Top-quartile success is something to be celebrated with those responsible, but it is also something to be shared.
This success has been achieved by individual managers or franchisees, which found an ingredient to boost the oxygen in a flame so high, that it becomes as bright and powerful as an arc-welding torch.
With this mind, benchmarking is a vital component in any business management tool box, and a critical element to adopt, in a bid to keep up with the ever-changing Namibian business climate, thus ensuring consistent profitability.
Essentially, it is about a lot more than just collecting numbers, for the sake of some vague historical record.
Benchmarking starts with collecting specific numerical indicators. But after that, businesses need to harness the power of benchmarking, by making use of these numbers to evaluate specific business areas, against the standards that have been set for them. The evaluation and the insights it offers, make up a major step in the journey to building a sustainable business.
In many succeeding businesses, benchmarking is core to the financial pillar of these entities. However, benchmarking is only as good as the numbers on which it is based, and therefore it is vital to choose key performance areas carefully.
These choices will dictate the key performance indicators that a business can distil from these figures, and allows it check them across the entire value chain.
It is also essential to note that that benchmarking departments or franchisees against each other reveals who is performing in the top-quartile and why. It allows a business to identify the gold standard, and then export it across the business or group, benefiting the business as a whole.
For smart and progressive firms, they make sure they harvest the creativity and insights that make them outperform their peers, and then retrain everyone else to leap this higher hurdle, as well. It is successes such as these that also enable businesses to refine business models, continuously.
The management truism is that you can’t manage what you don’t measure. So measuring and benchmarking puts the power of management in the hands of a business manager. This is also why it is important to establish basic values to track, while benchmarking, such as the number of sales and their value. Gut instinct for this simply is not enough.
No matter how well a business operates at the front end, no matter how good customer service is, no matter how much margin a business succeeds in receiving, it will not succeed in building a sustainable business of scale, without paying attention to management accounts, financial statements and their relation to benchmarked key performance indicators.
Confidente. Lifting the Lid. Copyright © 2015