benchmarking process, when they can serve to clarify thinking and intent. We have demonstrated a few areas that the professional services firm may consider benchmarking. The senior executives within a given firm will undoubtedly identify a variety of additional areas that can be improved and monitored with benchmarks.

benchmarkers beware

Common pitfalls that can cause potential problems in benchmarking include:

Objective of the benchmarking process is not clearly defined. Level in scope set is too detailed or not detailed enough to be used for implementation.

Confusing benchmarking with participating in a survey. Benchmarking is the process of finding out what is behind the numbers, not just where you rank.

Believes that pre-existing benchmarks can be found. These may not be applicable to your firm; therefore, you must identify your own benchmarking partners.

The process is too large and complex to be manageable.

Confusing benchmarking with research. Benchmarking presupposes that you are working on an existing process that has been in operation long enough to have some data about its effectiveness and its resource costs.

Misalignment-choosing a benchmarking topic that is not aligned with the overall strategy and goals of the business.

Selecting a topic that is too intangible and difficult to measure. Not establishing the baseline. Analyze your own processes thoroughly. Not researching benchmarking partners carefully. Do not ask questions

that you should have been able to answer yourself. Not having a code of ethics and contract agreed with partners.28

Not being open to change and seeking to understand benefits potentially outside the firms industry, geographic location, or organizational size.

The number of potential pitfalls versus benefits may seem to be a disincentive for undertaking the benchmarking effort-is the potential gain worth the pain? It is helpful to view benchmarking as a holistic process that encompasses and ultimately benefits the entire firm; thus, the benchmarking remedy may be more palatable to the entire organization.29

after benchmarking-what next?

According to Michelle Porter, Global Best Practices-Benchmarking Services group manager:

Understanding the business, establishing clear objectives, customizing a benchmark group that is aligned with those objectives, managing the users expectations, and being open to change are essential components for a successful benchmarking project. Benchmarking results are the beginning of a continuous process for an organization to further understand their business and identify their strengths and areas of opportunity. It is equally important for the users to be open to new ideas and consider best practices when evaluating the benchmarking results.30

A major rationale for benchmarking is to provide context from which measurements and recommendations can be made to senior management. While you can make the scope of the benchmarking as narrow or far-reaching as desired, it should always have objectives that mesh with a business strategy, a budget, and an expectation of return. It should elicit senior management approval and lead to senior management consensus about the reasons for conducting benchmarking.

Therefore, when presenting benchmarking data, executives should consider the business strategy of the firm and attempt to compare spending with the industry, taking into account the life cycle of your firm. Through identification of the right areas to tackle for benchmarking and hard work on the firms benchmarking initiative, executives may be able to more easily implement the findings-or not, if findings do not support the firms business strategy.

An assessment that indicates that the firms spending is low compared to the industry may indicate that the firms strategy is to increase profits. As a result, this does not necessarily indicate that spending should rise in response. A minimal spending approach may make the most sense for a company in a low growth mode, as opposed to an expansion and acquisition strategy that would indicate higher spending levels than the industry benchmarking.

just do it!

Benchmarking is not just about identification of best practices, but implementation as well-putting the data to use. Changing the way a firm or department performs a business process generally requires the involvement of both the human and financial resources dedicated to the task over a period of time. In addition, successful implementation needs a single point of accountability, realistic goals, and the ability to track the progress toward those goals.

Best practices implementation requires mastering the ability to work within your own firm once the benchmarking is complete. Successful implementation is possible only if diligence and focus are given utmost importance throughout the process, including:

Establishing a project sponsor who is actively involved in key meetings Selecting a dedicated team with a defined role for the team leader

Clearly defining the roles and responsibilities of team members and designating the team member in charge of communications

Developing measures of progress and milestones for the implementation team

Creating a budget for the project31

You must have a clear, consistent vision and dedicated, full-time teams assigned to an implementation project, says Mark Krueger, managing director of Ohio-based AnswerThink Consulting Group. Technology has to be viewed as an enabler, not the change agent. You also need to have open, honest communication and rely on leadership by example. 32

Finally, it is important to remember that benchmarking is not just a tool, but also a process-not an end in itself, but a means to improving performance. Thus, it should not be viewed as a one-time event, but as an ongoing commitment to continuous improvement.

summary

The lawyers, consultants, real estate brokers, and others who work for professional services firms may provide superior advice to their own clients, but sometimes forget to apply basic management tenets and techniques to their own firms. Yet, if professional services executives understand that benchmarking helps improve delivery of client service and is a practical, cost-effective tool that can help build consensus within the organization, they might be more willing to consider using it.

The ingredients for successful benchmarking can be found in best practices, committed management, and a well-run business. Effective management of a company or department is not achieved simply by reducing costs; it is also demonstrated by managing and controlling the business. Whatever pressure executives may be under to improve the bottom line quickly, they also face the danger of eliminating key resources that are essential to managing or growing the business or practice. It is smarter and safer to strike the right balance between functional cost and overall business value.

In a growing firm, it is easy to lose sight of the excessive costs, duplicate support services, and lack of consistent processes and procedures. But in todays competitive environment, these costs cant be ignored, even in the short term. The result of implementing best practices achieved by benchmarking is greater operational efficiency and effectiveness.

For those who believe they should benchmark but are hesitant because of time and resource constraints, some last words of advice: Do a quick mental inventory of your firm. It is a safe bet that there are certain elements of your operation that are not entirely satisfactory or could use improvement-