Phases of the Benchmarking Process - Assignment Example

If overestimation of performance is common then the organization’s employees already suffer from the Lake Wobegon effect. This means that employees already perceive that their performance is better than it is in reality and as such they naturally do not see the need of implementing new procedures. Betts, Croom and Lu (734) agree in this regard when they state that the degree to which employees perceive themselves to be vulnerable – in our case in relation to average performance – predicts their likelihood to engage in performance promoting behavior. Perceived weakness in performance would therefore be an important motivator for staff to support activities, such as benchmarking, that are geared towards improving their performance. Furthermore, when we analyze the statement, management attempt to introduce benchmarking procedures what comes to mind is that the organization at its current state lacks these procedures. This essentially implies that management will be engaging in a change effort. Kotter (96) reminds us that change efforts are done under many banners. The basic goal for introducing benchmarking procedures is to make fundamental changes in how the business is conducted in order to help it cope with new, more challenging market environments. Kotter’s statement confirms this to be a change effort. For this reason we find the need to discuss this question from two viewpoints: firstly as a Lake Wobegon effect challenge and secondly as a change effort challenge. As the Lake Wobegon effect challenge, this problem is a double whammy. For starters, management is faced with the challenge of transforming employee perception on the organization and secondly, the tool that they think is most appropriate for bringing a solution faces resistance of adoption because of the very perception that they seek to reign in. This is the dilemma. Let us try to breakdown the problem into more comprehensible parts. First, employees perceive that their performance is better than it is in reality. This means that they will not see the reason to implement any new performance enhancing procedure such as benchmarking. Second, management have identified that there is indeed a problem that has to begin with changing employee perception. Management believes benchmarking is the way to go and would like to implement it. Third, employees – in our deduced scenario – resist managements push to implement benchmarking since they are convinced that what they are currently doing is already better than their peers. Once we have decided to view this challenge as a change effort problem Kotter (100) reminds us that transformation is impossible unless employees help and employees will not do so unless they believe that useful change is possible. Here another question arises: what is the need for the change? Is there an apparent crisis? Tichy and Devanna in Betts, Croom and Lu (735) stated that where there is no apparent crisis, opening up the organizational culture to be receptive to change is especially more difficult than where there is a crisis. The first activity that management will therefore need to take is to structure their communication in such a manner as to capture the hearts and minds of its staff. Communication comes in both words and deeds, and the latter are often the most powerful form. Also, management need to be aware that communication needs to be accompanied by action, as Kotter (100) puts it; nothing undermines change more than behavior by important individuals that is inconsistent with their words. The quandary therefore is how to overcome employee resistance to change. Issuing directives from the top would be an attractive proposition however it would only aggravate employee resistance since they will not have been involved as willing participants. A more workable strategy would be one that makes the employees share in the vision behind benchmarking and in the decision process that selects it as the most appropriate course of action. Beer, Eisenstat and Spector (8) refer to this approach as mobilizing commitment to change through joint diagnosis of business problems. It may seem too obvious such as to warrant management to ignore but Beer, Eisenstat and Spector (8) remind us that the starting point for any change effort is to have a clearly defined business problem. This means that management must be able to clearly communicate to employees the reasons why they want to implement benchmarking despite the employees ‘misguided’ perception of their own superior performance levels. To enhance buy-in, management should work with employees in order to arrive at a shared diagnosis of what is wrong within the organization to warrant the need for introduction of benchmarking procedures. It is only through such joint diagnosis on the business problem and joint resolution on what can and must be improved, that management can effectively mobilize the initial commitment that is necessary to begin the change process (Beer, Eisenstat, and Spector 8). Another probable cause as to why employee would resist management’s drive towards introducing benchmarking procedures could be the organization’s current formal structures and systems. Employees may be looking at their roles and responsibilities as well as how they currently conduct business in the company and despair as to whether any newly introduced initiative would have a meaningful change. Communicating the organization’s new mission, vision and strategy may only go so far if staff goes back to the same work routine that prevented them from adequately meeting the previous mission, vision and company strategies. After all this may be the reason as to why management wants to introduce benchmarking. Many a time employees may comprehend the new mission, vision and strategy that the organization is pushing for to the extent that they want to help the organization make it happen. However, as Kotter (101) puts it, an elephant may appear to be blocking their path. In some cases the elephant is the organizational structure. Kotter (101) identifies narrow job categories as one of these ‘elephants’ that could seriously undermine efforts to increase productivity or make it very difficult even to think about customers. Whereas it is only through thinking beyond their narrow scope that employees can truly have a chance to overcome the Lake Wobegon effect. In this light, management will need to focus their energy on changing the work itself, and not on abstractions such as changing employee ‘perception’ or ‘culture. For this reason, Beer, Eisenstat and Spector (5) proposed that the most effective way to change behavior is to place employees into a new organizational context, which imposes new roles, responsibilities and relationships on them. According to them, the new goals and accountabilities that arise from placing employees in a new organizational context will force learning. Also, the changes in roles, responsibilities and relationships will foster new skills and attitudes. Finally, the changed patterns of coordination that have resulted from the new organizational context will further enhance employee participation, collaboration and information sharing (Beer, Eisenstat, and Spector 9). Under such an environment employees would have less resistance towards the implementation of new performance enhancing procedures such as benchmarking. The one thing that we must not forget however is that in viewing the introduction of benchmarking as a change effort problem we have one key ingredient needed for the success of any organization transformation effort. We are informed that it is management that is behind this initiative thus we can safely assume management buy-in. With management support, altering the company’s formal structure and systems, establishing a great enough sense of urgency and communicating the vision behind benchmarking and other critical ingredients for change make overcoming employee resistance very realistic. Finally, we cannot ignore the implications raised by the variation of results between the countries surveyed. Betts, Croom and Lu (739) do not categorically state the reason behind the difference between variation of results between US, UK and other countries. They only allude to differences in culture as a possible explanation of the variation in employee perceptions of self. If this were the case then we could also suggest that employee resistance to change would be less for companies operating in communities that are predominantly collectivist for example in South Korea or Japan and therefore the management’s attempt to implement benchmarking procedures will be met with less resistance. 2) What are the potential means of remedying such overestimations and successfully implementing a benchmarking proposal? Potential means of remedying employee overestimations Most individuals vastly overestimate their own competence probably due to lack of consistent accurate feedback from their organization’s reviewers. Prevalence of inflated values of performance evaluations in many organizations manifests the inadequacies of typical feedback processes. Companies that seek to remedy employee overestimations must devise ways to measure employee performance accurately so as to help its staff grow in the needed skills and behavior competencies. Accuracy in measurement requires a structured, objective and practical measurement process that is also reliable. There are numerous employee appraisal techniques that could be applied depending on the organization’s goals, strategy, structure and culture. For example there is the 360-degree appraisal and the Management by Objectives (MBO) appraisal. The unfortunate thing is that in many organizations, as in elsewhere, individuals rarely receive accurate feedback, particularly if it the feedback is negative. This tendency to shield employees from non-positive feedback often leads to inflated performance reviews that neither provides useful feedback to employees nor does it meet the organization’s need for improved performance. The important thing therefore is for organizations to institute measures that encourage the giving of accurate feedback to employees. The best place to start would be those employees who hold critical positions that have substantial influence on the success of the organization. Small changes in these positions make a huge difference that could yield results that are returned exponentially. This means that the prior to implementing benchmarking proposal, the company may be better of starting with evaluating its performance appraisal processes. The organization may need to ask itself critical questions such as: does our organizational culture support Lake Wobegon or does our culture encourage accurate feedback? Solving this problem may just be the remedy for employee overestimation that the organization was desperately seeking. How to successfully implement a benchmarking proposal The American Society of Quality outlines the benchmarking process as comprising of five phases: planning, analysis, integration, action and maturity in that descending order (ASQ). In answering the second part of the question, how to successfully implement a benchmarking proposal we shall evaluate a relatively old case study, conducted in 1999, but that has lessons that are highly relevant to our present day discussion. The case revolves around the experiences of Warwickshire Ambulance Service, a British National Health Service (NHS) Trust that actively embraced benchmarking and applied it in the context of major structural change and performance improvement (Holloway, Francis, and Hinton 17). We shall study how the Warwickshire Ambulance Service implemented its benchmarking process, compare it to the American Society of Quality process outline and propose on the way forward for an organization seeking to implement the same. Warwickshire Ambulance Service is an NHS Trust that operates throughout Warwickshire and its neighboring areas, serving a resident population of over 500,000. It has three core areas of activity, namely the provision of Emergency Ambulance Services, routine Patient Transport Services, and Logistic Medical Services. At the time of the case, Warwickshire Ambulance Service’s had been awarded the largest contract for routine patient transport services in the UK, a successful tender attributed particularly to their low overhead costs. Under the UK’s Department of Health 1995 Patient’s Charter, Warwickshire Ambulance Service was only obliged to report their performance against national targets for arrival at the scene of a call-out. The nationally set targets for call-outs were that 50% of ambulance responses to 999 calls should be achieved within eight minutes and 95% should be achieved within either fourteen or nineteen minutes, for urban and rural services respectively (Holloway, Francis, and Hinton 19). This was the sole compulsory benchmark for the organization. However, Warwickshire Ambulance Service went beyond aiming to follow the compulsory benchmarks and set additional operational benchmarks on itself that it reported in its annual reports. One particular aspect of Warwickshire Ambulance Service operations which the organization examined in great detail was the time taken at the scene to which the ambulance had been called (time at scene). This provides the first lesson for the successful implementation of a benchmarking proposal. Holloway, Francis, and Hinton (14) found that among the commonly cited benchmarking problems were difficulties in finding partners who were considered suitable comparators, resource constraints (especially time), access to other organizations, staff resistance and confidentiality. Planning The first stage of benchmarking is obviously the planning stage. Here the organization will need to define what to benchmark? (ASQ Para 3) proposes that one thinks about the output of a process or function since these are the most appropriate targets for benchmarking. Possible targets include strategic planning, process management, human resource development, customer and market focus and business results. While choosing what to benchmark, management must simultaneously be thinking about what is core to its vision and mission and where it opportunities lie for greatest improvement. The company must be realistic when selecting the number of processes that it seeks to benchmark. In the case study, Warwickshire Ambulance Service chose a core operation element as its first candidate for benchmarking. The organization chose to examine in great detail the time it took at the scene when an ambulance is called – also referred to as time at scene (Holloway, Francis, and Hinton 22). After defining the processes that the organization would like to proceed with to benchmark, the next logical step would be to identify whom or what to compare with (ASQ Para 4). There is a range of typologies of benchmarking activities, namely: internal, competitive, functional and generic. Internal benchmarking is where the organization compares similar operations within it. Competitive benchmarking involves comparing the organization with the best of its direct competitors. Functional benchmarking refers to comparison of methods to organizations with similar processes in the same function but outside one’s industry and generic benchmarking involves a comparison of work processes to other organizations that have innovative, exemplar work processes (Camp 16). The power of benchmarking increases as one moves down Camp’s typology with internal being the least and generic being the most powerful (Holloway, Francis, and Hinton 31). Warwickshire Ambulance Service selected all four: internal, competitive, functional and generic benchmarking but only succeeded in implementing the first three. Internal benchmarking was successful in reveal significant differences between stations which were to be addressed by changes in practice and establishing maximum times to be spent on scene (Holloway, Francis, and Hinton 28). The organization commissioned the District Audit, a local arm of the UK government’s Audit Commission, to provide it with comparative data on “time at scene” collected from other local government and health services (Holloway, Francis, and Hinton 22). These are basically its direct competitors in the British National Health Service. Warwickshire Ambulance Service then attempted to benchmark with commercial organizations such as TNT, as a generic benchmarking approach, but did not succeed in making a link. Such experiences demonstrate some of the challenges of selecting whom to compare oneself with. The organization may have identified and clearly selected the processes that it seek to benchmark but then fail in getting its intended comparative data. This does not imply that the organization should give up. It could identify an alternative company to compare to or like Warwickshire Ambulance Service move down Camp’s typology to find whom to compare itself to. Warwickshire Ambulance Service was more successful in getting comparative data from the Police and Fire Service than TNT, though it experienced a number of challenges for example in defining the metrics, and the problem of consistently coding and recording data that was not compatible with how ambulance services record their data (Holloway, Francis, and Hinton 24). The final stage in the planning phase is data collection. There are numerous ways through which data can be collected ranging from surveys, hard records, telephone interviews and site visits. Here to organizations may be faced with problems of access to information especially if the other company feels that it may lose its confidentiality in the process. In the health services industry, access to other organizations information and confidentiality are huge barriers to the benchmarking process. However, Warwickshire Ambulance Service found a way around this challenge by commissioning a third party, the District Audit, which is trusted by all industry players to conduct the comparative studies while guaranteeing all players anonymity. The District Audit is a local arm of the UK government’s Audit Commission and as such is able to collect comparative data from within an industry while guaranteeing these companies anonymity when sharing their data. It is also at the planning stage that the organization picks the team to spearhead the benchmarking process and defines each member’s roles and responsibilities. Some team roles that could be considered for filling include: team leader, benchmarking expert, an expert in process area of interest, a data expert and so on. Employee buy-in is therefore vital for the entire process since they will constitute the bulk of the team. Employees who share in the vision behind benchmarking and who participated in the decision process that selected benchmarking as the most appropriate performance improvement process are more likely to be committed to making the process a success. Analysis The second phase of the benchmarking process is referred to as analysis and its core purpose is to compare the quantitative results of the organization’s process with those of its best-practice partner. The end result of this phase would be to provide clear answers to each of the following questions: (1) is the other organization better than us? (2) Why are they better? (3) How much better are they? (4) What best practices are we using now or can we anticipate using in future? (5) How can our organization adapt these best practices for our use (ASQ Para 7)? From the Warwickshire Ambulance Service case study, the analysis part is depicted by the independent review of the organization’s performance, in particular time at scene, which was conducted by the District Audit. From the study it was clear that other ambulance services were faster than Warwickshire Ambulance Service at the incident/accident scene: “On average they [Warwickshire] spend 17% longer at emergency scenes, equating to over 1,000 crew-hours per year (Holloway, Francis, and Hinton 22)”. This statement answers ASQ (Para 7) first three analysis questions. From these findings, Warwickshire Ambulance Service sought to fully understand the reasons behind them and their implications for patient care. For example in Diabetes patients’ emergencies, Warwickshire crews spent 50% longer at the scenes than the average for other ambulance trusts. However, this longer time meant that the care given at the scene reduced the prevalence of most of Warwickshire’s diabetic patients from requiring hospitalization (Holloway, Francis, and Hinton 23). Integration Integration is the third phase of the benchmarking process and its key goals are to communicate benchmark findings to gain acceptance and to establish functional goals. Integration is like the first step towards adapting the best practices to one’s organization. Here management looks at what are the enablers and/or barriers to the integration of these best practices into the company. Also, management needs to obtain feedback, buy-in, and support from key stakeholders at this stage. From the Warwickshire Ambulance Service case study, it is hard to make a clear distinction between the integration phase and the next phase the action phase. Action The fourth phase of ASQ (Para 11) benchmarking process is referred to as action. As the name suggest here, the organization implementing this process puts in place specific actions that are to be taken so as to complete the process. Completion here refers to the purpose for which the benchmarking process was initialized, which is to increase the organizations performance on the selected key areas. One action plan from the Warwickshire Ambulance Service case study that was yet to be fully realized was to develop interdisciplinary co-operation through the use of teams for benchmarking. The organization’s Finance staff was seen as narrowly focusing on only financial deliverables and having a limited appreciation of operational management. The organization appreciated that there was need for interaction between operational and financial benchmarks. On the other hand, the move to have a shared headquarters with the Fire Service was a smart action that would enable both organizations learn from each other’s best practices to improve their organization’s performances. One key element of this phase is the institution of methods to monitor the organization’s progress as it implements the specific action plans and recalibrating the benchmarks to reflect changes in the business, industry and macro-environment. Maturity The last phase of the benchmarking process is realized only when the organization can honestly state that its practices as superior within its given industry. This could be manifested through peer nominations, industry awards and awards from accredited bodies such as the American Society for Quality (ASQ) and so on. An organization is said to have reached benchmarking maturity when the process is not only institutionalized but also carried out at all applicable levels of the organization by non-specialists (ASQ Para 16). Works Cited ASQ. “Benchmarking - The Process - Learn About Quality.” ASQ.org. Web. 28 Dec. 2011. Beer, Michael, Russell A Eisenstat, and Bert Spector. “Why Change Programs Don’t Produce Change.” Harvard Business Review November - December (1990): 4-12. Print. Betts, Alan, Simon Croom, and Dawei Lu. “Benchmark to escape from Lake Wobegon.” Benchmarking: An International Journal 18.5 (2011): 733 – 744. Print. Camp, Robert C. Business process benchmarking: finding and implementing best practices. Wisconsin: ASQC Quality Press, 1995. Print. Holloway, Jacky, Graham Francis, and Matthew Hinton. “A Case Study of Benchmarking in the National Health Service.” Mar. 1999 : n. pag. Print. Kotter, John P. “Leading Change: Why Transformation Efforts Fail.” Harvard Business Review January (2007): 92 - 107. Print.  Read More