Why Is Benchmarking So Critical to Your Organisation’s Performance? Why do organisations benchmark?
5 Reasons Why Associations Should Offer Members Benchmarking
Many businesses already know how to do benchmarking, but sometimes lack the required data to run accurate benchmarks. Trade associations are in a unique position to offer members highly accurate benchmarking services. While it is by no means a unique offering but it certainly is a useful one as it helps businesses understand how well or bad perhaps, they are doing.
The purpose of an association goes beyond just collecting members who participate in fundraising or electing a president. Associations should be dedicated to helping member businesses improve beyond just superficial activities. Benchmarking member businesses offer an array of advantages and not only to the companies but the industry as a whole. In return, it helps associations grow.
If you’re a business owner and the association of which you’re a member does not benchmark there are many reasons to motivate it to do so. While there are dozens of reasons why benchmarking at the association level is so important, we will stress upon the five primary ones. If anything the reasons mentioned above apply to a broad array of businesses and hundreds if not thousands of associations across the world.
Reason no. 1: Help Businesses Grow
Whether it is a trade association, professional association, federation or society, it is essential to understand what is hindering the performance of your members. Granted that some members may be doing great but many may not. Having even a few members who aren’t doing well means there will be consequences one of which is that your membership numbers could dwindle.
As an association knowing as much as you can about your members’ concerns, gains, obstacles, and other issues will help grow the association better. The only way to find out is with proper benchmarking mechanisms in place. Benchmarking allows members to see what may be going wrong and how the association can help them navigate tricky waters.
Apart from helping members benchmarking helps associations too since it provides valuable insight into how the market works. The only hurdle perhaps is what to benchmark? That will depend a great deal of on the industry, and it’s something that associations may already be aware of for the most part. The information allows the association to represent members better and also grow on its own.
Reason no. 2: Gain market insight
What would you pay to find out how the competition is able to sell more than you? A lot! That’s right which is why associations should pay heed to industry-wide benchmarking.
Market insight is one of the keys to running a successful business and associations can be a source of that insight. All business managers want to know how well their competition is doing and then compare themselves with those businesses. So, if companies could have an inside look at a competitor’s operations, it will give them much-needed insight which is especially true for start-ups.
Insights into competing businesses can be made possible with benchmarks. Benchmarks allow firms to get some insight into how competitors are achieving specific goals or tasks. Associations are in a unique position to run these benchmarks and make sure that everything is done discretely. Each business can participate knowing that their inside information will not be leaked to the competition. Though each businesses will be able to see where they stand in the industry.
Industrywide benchmarking is a great way to give everyone a look behind the curtain while ensuring that no secret information is revealed. It also helps to find out which direction the industry is headed as a whole.
Reason no. 3: Establish Industry Standards
All industries should have established standards that businesses should adhere to so the question is: where has your industry standard been derived from? If your association does not have a set of standards then benchmarking is a great way to get there.
Benchmarking helps to establish standards that all businesses can adhere to regardless of size. Usually, that’s possible because the data gathered helps to gain insight into the quality of each member business’s process. The standards can then be compared to all companies to see which are able to meet them and where they may be falling flat.
A single standard perhaps set for different business variables can help individual businesses run their own benchmarks too. For instance, a company in the restaurant industry can run a benchmark to find out how good their customer service is compared to the industry standard on a scale from 1 to 10. The same restaurant can also see how people are rating their hygiene in comparison to the established industry standard.
Reason no. 4: Industry Improvement
All industries have room for improvement, and there are various facets of which can be improved. However, for development to take place, potential areas for further growth need to be identified. Benchmarking and especially one that’s run by a leading association can help identify potential areas for improvement in the industry.
While not all businesses within an industry will be members of an association and there could be competing associations too, but improvement should be at the forefront of the mission statement. When associations help members improve, they are helping the association itself grow as more businesses would like to join and hence benefit from the benchmarking insights. All of which contributes towards the growth of the industry.
Reason no. 5: Adds Value to the Membership Privilege
Associations need to add value in a bid to attract members. One of the ways for associations regardless of their type to add value is to offer business insight. All businesses by their very nature want to make more money, get more clients, improve manufacturing, etc. If a trade association can help, it ups the reason to join the ranks of members.
Benchmarking can help trade associations offer that value. Associations should also brief start-up businesses on how to use benchmarking for performance improvement. Offer benchmarking solutions to members which gives them insights into how they can improve or identify potential issues within the organisation.
The more value an association adds, the easier it becomes from them to grow. Not to mention work towards becoming an all-encompassing association in the industry.
Businesses often know how to do benchmarking, they know the benefits of it but lack the data needed to run it. Associations are a great source of information but only if they make use of it. Many associations have begun to realize the potential that benchmarking holds in the way of helping the industry grow. Plus, it gives businesses an incentive to join the association.
The key to running useful benchmarking is sourcing reliable and current data from all businesses in an industry. It is where associations can do a great job since they are in communication with most if not all member businesses. The larger an association is the more information they have, and hence the more detailed and useful their benchmarks become to members.
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