Best Practice: Benchmarking moves on to bench-testing: Old methods are being pulled into the light

BRING business people together these days and it is likely that the talk will eventually get around to benchmarking. This is significant not so much because they have picked up on another management fad (this happens all the time), but because all this talk, if translated into action, represents a fundamental shift in attitude.

Not so many years ago, most companies were insular. They might have had well-developed international operations and exported their products all over the world, but when it came to how they did what they did, they acted as if theirs was the only way.

Now the blinkers are off, and increasing numbers of companies are exposing their internal workings, to compare and measure - or benchmark - their business processes against those of market leaders in not just in their own industries, but in all sectors worldwide.

For example, ICL, the computer company, has measured its training methods against those of the Royal Mail. A regional airline in the US strongly improved turnaround time for its aircraft by studying the methods of pit crews at the Indianapolis 500 car race.

At first, as in the quality movement, it was the better companies that embraced benchmarking. But the laggards are realising how much potential there is in the approach.

A participant in a recent seminar organised by the IBC Technical Services consultancy and Arthur Andersen, the international accountants and consultants, put it this way: 'Some people were a bit dubious at first - then they recognised that they were likely to be gaining much more than they gave away.'

Laudable though benchmarking is, putting into practice the results of the exercise is quite another. This is where the conference supported by Arthur Andersen comes in.

As suggested by the seminar title, 'Applying Best Practice to Improve Performance', it was designed mainly to help companies over the hurdle between identifying processes and approaches that are better than their own, and adapting them for their own use.

In the words of one of the Andersen slogans, it is 'putting insight into practice'.

Several companies that are considered to be at the leading edge in this area were on hand to help at the one-day seminar in London last month, which was attended by about 200 people. For example, Dr Wayne Rosenkrans of the US arm of SmithKline Beecham, the international pharmaceuticals company, spoke on how to set up a best practice strategy in research and development.

Roger Davies, of British Airways, addressed the practical issue of selecting a company against which to benchmark; Susan Cottrell of Milliken, the textiles firm, offered advice on coping with the pitfalls of maintaining the sought-after 'best in class' status; and Howard Coulson, of Exxon Chemicals, looked at the use of the supplier and customer partnership, and the project approach.

Graham Walker, an Andersen partner who was involved in the programme, said he had been encouraged by the response to the seminar.

'A year ago, people were fairly unsophisticated. Now they realise that if they want to do the job properly, they have got to be a lot more sophisticated. And at the same time, they realise that it has to be done,' he said.

To build on this, Andersen is researching - with companies that participated in the seminar - the best way of following this up. Among the plans for this month are a workshop or individual briefings designed to guide directors and managers through the practicalities of such key issues as customer satisfaction, new product development, and purchasing.

This is not pure altruism on Andersen's part. The seminars and workshops are a way of introducing businesses to the firm's 'global best practices initiative', with which it is hoping to steal a march on its competitors in the benchmarking field.

The Global Best Practices Knowledge Base, which is at the heart of the scheme, is not a service that is for sale to clients, but a resource that Andersen's staff can draw on and help to expand.

Bud Baskin, partner in charge of audit and business advisory training at Andersen's training centre at St Charles, near Chicago, where much of the expertise is being developed, stresses that the project is not a database - 'because if you don't have an expert using it, it won't work'.

Moreover, he sees building up information on best practices, performance measures and the like as a way of making the firm a more effective 'learning organisation'.

As part of this, Andersen is working with a number of market leaders - such as DEC and Xerox - to develop a process classification scheme.

By detailing information on the measurement of customer satisfaction, logistics and the formulation of environmental management strategies, it aims to create a universal language for the field. It is also establishing its own team of process experts, to be based at St Charles, who will act as advisers to Andersen personnel throughout the world.

Although Mr Baskin is confident that the scheme will take Andersen to the next step in terms of education and training policy, the company warns its staff not to see the knowledge base as a 'magic solution'.

Rather, it is a tool designed to help provide insight into how processes can be improved. Therefore, it must be tailored to specific situations.

(Photograph omitted)