Before embarking on a project for any client, whether strategic planning, new program development, or communications planning, one of the first items typically called for is a “benchmark analysis”.
Essentially, a benchmarking analysis examines practices of other companies’ particular programs, initiatives and/or policies with the goal of finding best practices, trends and industry expectations.
A benchmarking analysis can be an effective tool, so long as the data is interpreted and used correctly. Given the wealth of information readily available through online research and social media outlets, it’s easy to delve into a large—and expensive—research project unnecessarily. But before you embark into data collection, here are some initial thoughts to keep in mind:
1. Choose the right set of companies
Selecting the right number and type of companies to review is a nuanced process and one that should be done with project objectives in mind. Before jumping in, consider the answers to the following questions:
- What am I trying to find out? What are my key objectives?
- What will be done with this information? Who will I share it with?
- Which one of the following do I need:
- To know what my industry peers are up to?
- To learn what are companies doing in a particular social issue or cause?
- To understand current ‘best practices’ in areas such as communications, grant making, evaluation, and/or stakeholder engagement?
2. Benchmarking does not equal best practice
Although our job as consultants is to help get the inside scoop as to what’s going on at Company X, the reality is that most benchmark findings are based on publicly available data. This should be information that has been approved by corporate PR and posted voluntarily by the company being reviewed. A good reviewer will help you uncover key discoveries and understand how to interpret what companies leave unstated, what elements are missing. In fact, a comforting outcome of benchmarking analysis is finding out that even the programs with the best reputations are imperfect after all.
3. Benchmarking gives you what is happening now
Benchmark data is based on past or current activities—not future planning or intent. Innovation requires that we “skate to where the puck is going, not to where it is”, as the old adage says. Benchmarking is skating to where the puck is today. While it may be helpful to find out what companies are actually doing today, it’s important that the data itself inform your company’s own decision-making rather than guide it.
4. Know what you can reasonably—and accurately—find
A recent client wanted to do a benchmark analysis to determine the decision-making process on how national foundations choose which nonprofits to grant monies to; not the publicly stated process, but how it “really happens.” Unfortunately, that information is virtually impossible to secure without intimate knowledge of the politics, inner systems, and thought processes of the grant makers. To expect such intimate details is unrealistic and ultimately not helpful.
Benchmark studies are simply one piece of data that should inform decision-making. However, once you determine what you want to learn and what you will do with the findings, benchmarking can be a powerful weapon in your quiver of intelligence.