The Weaknesses of Benchmarking

A common mechanism for identifying opportunities for improvement within public sector organizations is the use of benchmarking. Usually performed by external firms, benchmarking involves selecting a number of areas of an organization for examination and comparing their practices, approaches, and outcomes to one or more similar organizations.

Ideally, the benchmarking effort results in a list of fully vetted and mature ideas ready for implementation. The reality is that benchmarking in the public sector typically results in few if any meaningful opportunities. In many cases, public sector organizations are truly unique with specialized missions, needs, and operations with few if any similar organizations. In other cases, the benchmark targets are comprised of other public sector organizations with the same sets of systemic or cultural challenges. After one federal organization for example completed a bench-marking study of their practices against other federal agencies, the project sponsor declared, “I thought we were bad, but I actually feel better about the way we do it here now.”

Another issue for public sector organizations associated with benchmarking is the lack of value in comparative quantitative data. The ability to define and compare equal metrics is often difficult and the root cause of what is driving the results of the metric is almost impossible to pinpoint in a short benchmarking effort. At best, typical benchmarking efforts often only reveal very high level trends that pinpoint areas for additional review.

The highest value of benchmarking however is often not in the quantitative or qualitative comparison between organizations or their activities, which is what many consultancies originally set out to capture. The true value lies in the cross-organizational dialogue that often takes place during the benchmarking effort. To capitalize on that value, many benchmarking efforts emphasize not similarity but differentiation in the targets. The goal of the effort is not about an apples to apples comparison, but an exposure to the 'art of the possible' from a wider variety of organizations. This type of benchmarking is not about comparing metrics but about comparing ideas for the purposes of sparking innovation. Organizational leadership that compares for example their human capital practices to a local cable content provider often stands more to gain than comparing their practices to a similar government organization. What they find won't be a seamless fit but will often provide substantially more ideas to contemplate, evaluate, and implement.