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Benchmarks: Do You Know the Score?

Operations leaders are uniform in their quest of searching out the next greatest invention, tool, service expert or consultant to help improve upon the current results. These concepts can contribute to the business when properly implemented and deployed. The best tools and services are invaluable when they are correctly aligned with the team responsible for the daily implementation.

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Does your team know the score? Does the team know how their performance contributes to the health and well-being of your business? Each person needs to know the score to understand how their current performance is leading to operational growth.

Think your team cannot handle key performance indicators (KPIs) or benchmarks? Perhaps, the concern is the team will be inundated with data and not actively engaged in the daily operations? Studies show the more the employee is engaged in her/his performance efforts, the more active they are in building skills to support organizational success.

Performance management is the process of measuring and reporting on a specific set of input (activities) and outputs (results). The KPI is a measurable value the company uses to evaluate whether they are achieving key business objectives.

There are four types of indicators: input, output, outcome and impact. Performance indicators measure the effectiveness of operations management actions to meet organizational objectives.

Leading indicators are input measured while lagging indicators are output oriented. Each KPI has its relative qualitative and quantitative values providing insight into operational objectives. Benchmarking is the business rationale of comparing essential KPI to a top-quartile, best in group or high-performing organizations related to a functional area of the operations.

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Each area of the operation should have a quantitative value identifying success modeling of the best-in-class performers. These benchmarks outline the performance standards for the operational team(s) to build their performance strategy.

Regularly review these operational benchmarks as the team works to develop the organizational strategies. Everyone on the team(s) should know the score at three key intervals: beginning the month/quarter; bi-weekly to review performance indicating the progress, resource drains and/or the changes required; and end of the month/quarter.

Regular reviews keep the operational leader(s) and team(s) on target for achieving business growth. Monthly reviews are often too late for mid-month adjustments and process changes and often lead to poor implementation and accountability.

Day-to-day operations can distract department leaders and their team(s) from reviewing metrics with regularity. Time-blocking is the concept of scheduling dedicated hours to discuss the key performance metrics. Specific time blocks are required so the team(s) can identify the input, output, outcome and impact results. The metrics should be commensurate with the overall operational goals and be proportional to benchmark performance. Organization leaders compile the data sets and report on the results. If the results indicate the performance is below the benchmarks, then specific actions, tasks and ownership responsibilities need to be identified with specificity.

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Benchmark discussions directed by operational leaders should focus on two specific areas: the people performing the job and the processes involved in the job completion. The outcome or accountability to achieve the benchmarks is the combined responsibility of the operational leader(s) and the team(s). Proper utilization of the key metrics creates visibility to the operational successes or flaws, process development, training and development, organizational clarity, culture, vulnerability, personnel needs and leadership.

The logic of “analysis paralysis,” whereby a team is unable to move forward with a decision because of over-analyzing the data, is a genuine concern. To prevent a potential freeze in progress, the benchmark meetings should always include next-step discussions with clear and concise goals complete with commitment timelines and process ownership. Unloading an abundance of information would be tedious and have less impact to creating actions.

Instead, the focus will be to accentuate these three goals: understanding why the measurement is there, what the measurement means and how the measurement is used.

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