The hidden perils of benchmarking

EVERY business competes. Companies use benchmarking, by comparing key performance metrics, as a way to determine where they stand competitively and to identify ways they can improve. It is widely practised and enthusiastically embraced. But does it deliver, and is the emphasis well placed?

It's not the concept but it's in the application where problems arise. Benchmarking and its close cousin, emulating best practice, are hard to execute. Consider this. Companies have difficulty in benchmarking and transplanting best practices within different parts of their own company.

Large companies, for example, have different employee attrition rates between departments and geographies since they cannot successfully migrate what works in one part of the business to another. When benchmarks can vary quite dramatically internally, how can companies hope to transplant best practices across companies?