[The following article appears in the August 1994 edition of
_Public_Sector_Quality_Report_, page 4.]

                "BENCHMARKING" BEING BANDIED TOO BROADLY

     You can hear or see it almost every day now, in a phone
conversation or an e-mail message. Another public sector agency
announces it's about to embark on a "benchmarking" process to
measure and improve its organizational effectiveness.

     But what exactly does that term "benchmarking" mean?

     From all indications, it means different things to different
people. In recent months and even years, PSQR has noticed the
term "benchmarking" being bandied about in two decidedly
different ways.

     In the private sector, particularly, the term traditionally
has been used to describe an organization's effort to look
outside itself to study and learn from the "best practices" of
others. For example, a business where the accounts payable
process is deemed hopelessly slow, inefficient, and costly might
"benchmark" other organizations whose systems for cutting checks
are vastly more efficient.

     More recently, particularly in government circles, the terms
"benchmark" and "benchmarking" have been used to describe a
process of creating performance or outcome-based measures by
which an organization can gauge its progress toward improvement.
In some cases, the term "benchmark" is used not only to describe
the overall measurement and goal-setting activity, but also to
label the individual indicators of performance, or the baseline
numbers from which progress will be measured.

     Perhaps the most notable example of this is the Oregon
Benchmarks efforts, which for all its value as an innovative,
often-emulated model for setting strategic goals and measuring
performance in a large public organization, might have helped to
send imitators off on a tangent when it comes to the commonly
accepted definition of benchmarking.

     So what's the correct use of the term? A check with several
sources indicates that "the search for industry best practices"
is the commonly accepted definition of benchmarking.

     In response to an e-mail query by PSQR on this topic, Robert
Bowser cited a book titled "Benchmarking" by Robert Camp
(American Society for Quality Control, 1989), in which the author
defines benchmarking as "the search for industry best practices."
It turns out "the search for industry best practices that lead to
superior performance" also happens to be the subtitle of Camp's
book.

     In a recent issue of The Public Innovator, Curt Johnson,
chief of staff to Minnesota Gov. Arne Carlson, was quoted
defining benchmarking as "finding and implementing 'best
practices' in high performing work processes that satisfy
customer requirements."

     Similarly, Harry Hatry, director of the State and Local
Government Research Program at the Urban Institute in Washington,
DC, says "the term 'benchmarking' has come to be associated with
this business of looking for best practices elsewhere. I think
there's no question about that, and I think people now are
recognizing a confusion over the term."

     So then, if creating a set of performance standards for your
organization is not benchmarking, what is it? Bowser says better
terminology might be establishing "metrics." Hatry prefers the
terms "performance measurement" and "targets." An organization
establishes a sound, outcome-focused performance measurement
system, then sets improvement targets which it strives to meet or
exceed.

     "It is important that it be understood what is and is not
benchmarking," adds Bowser. "The process of just establishing
metrics for a process is not benchmarking. The process of
establishing metrics for a process and then comparing them to
industry metrics is not benchmarking. Neither of these processes
identifies any methods that you can use to improve the current
process, because they do not identify how the organization that
you are benchmarking against accomplished what you would like to
accomplish. Thus, the difference between metric analysis and
benchmarking is that benchmarking will show how the gap (between
your agency and a state-of-the-art organization you'd like to
emulate) can be closed."

     Two final points: While discrepancies over the proper
definition of "benchmarking" are not a huge issue in the great
cosmic scheme, in any field of endeavor it helps to have
agreement on terminology, and the field of public sector quality
management is no exception. Secondly and more important, to miss
the true meaning of benchmarking--identifying and benefiting from
the best performers in your business--might mean you're
overlooking an important tool for improving your organization's
performance. 

[For further information about PSQR or to subscribe, contact:
Public Sector Quality Report
17733 Kingsway Path
Lakeville, MN 55044-5209
Phone: (612) 898-5058
Fax:   (612) 892-7710
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[SysOp note: this text is also contained in a downlodable file.
Filename: BENCHDEF.ZIP.]