LEARNING FROM THE BEST- MANAGERIAL HANDBOOKS 2008 - NO. 2
MANAGERIAL HANDBOOKS 2008 - NO. 2
“ LEARNING FROM THE BEST”
“APPRENDERE DAI MIGLIORI” QUADERNI MANAGERIALI 2008 - NO. 2
copertina3.indd 1
20-11-2008 17:22:49
“Learning from the best” MANAGERIAL HANDBOOKS 2008 - N. 02
Index AVETE PROGETTI PER IL FUTURO? BANDI 2007
Chapter I
pag. 6
Chapter II
pag.10
Chapter III
pag. 19
Chapter IV
pag. 24
The principles of
The methodology of
Operational
Operational tools &
benchmarking
benchmarking
benchmarking
templates
Manual of Fondazione Cariplo 1 What is benchmarking 2 The fundamentals of benchmarking 3 Why benchmarking 4 The benchmarking sphere 5 Benchmarking typologies
1 Plan phase 2 Collect phase 3 Analyse phase 4 Adapt phase
1 The benchmarking Code of Conduct 2 Flow-chart of the benchmarking process
1 Collection of benchmarking proposals 2 Prioritisation of the benchmarking process 3 Benchmarking plan: structure 4 Check list – plan phase 5 Screening questionnaire 6 Selection of the benchmarking partners 7 Partner selection matrix 8 Agenda for benchmarking visits 9 Check list – collect phase 10 Cause and effect diagram 11 Benchmarking report: structure
12 Check list – analyse phase 13 Improvement plan 14 Check list – adapt phase
Appendix Screening questionnaire
pag. 33
Benchmarking Manual
Introduction Benchmarking means ‘comparing’, usually to the best, through a well-defined process. Benchmarking is intended to trigger continuous and non-continuous improvement processes. When followed by internal transformation, benchmarking yields outstanding results. To be effective, benchmarking should be carefully planned and managed in order to ensure all information required for the subsequent improvement actions is properly gathered. Benchmarking involves comparison against the “best in class”. Finally, benchmarking is closely related to learning and creativity. It involves curiosity, method, commitment and imagination. The positive outcome of benchmarking depends greatly on the capacity of people to search for and embrace excellence, wherever it may be. Since we believe that even a creative activity such as benchmarking requires method and professionalism, we have prepared this Manual, a management guide to practical application. The Manual was drafted by a Fondazione Cariplo work team that gathered the most advanced know how on the topic and adapted it to the specific philanthropic context within which the foundation operates. This initiative is part of the organisational “Excellence Program” and it represents a fundamental milestone in the continuous improvement path on which the Foundation embarked many years ago.
Pier Mario Vello Secretary General
Benchmarking Manual
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Benchmarking Manual
Chapter I The principles of benchmarking
1 What is benchmarking 2 The fundamentals of benchmarking 3 Why benchmarking 4 The benchmarking sphere 5 Benchmarking typologies
7
1
What is benchmarking
The process of continuously and systematically comparing and measuring against leader organisations worldwide. A process aimed at collecting information which will help the organisation develop a program to improve its results.
2
The fundamentals of benchmarking
Improvement
Benchmarking
››allows to identify possible performance gaps with respect to best practice organisations ››allows to understand how best practices reach higher levels of performances ››helps identify the necessary actions to fill the detected gaps and start a concrete improvement program
Continuity
››Benchmarking has to be an integral part of Strategic Planning
Method
››The organisation has to adopt and apply systematically a well-defined benchmarking methodology
For benchmarking to be successful it is not always necessary to identify the absolute “best practice” in the world. It is very unlikely that an organisation is the best in everything it does. What is meant by best is those practices that have been shown to produce superior results, selected through a systematic process, and judged as exemplary. The internal transfer of a good practice needs to deal with adaptation to the specific characteristics of the organisation and must not (and can not) be limited to an automatic and impersonal replica.
3
Why benchmarking
Benchmarking is a tool to: • compare your own processes and results with those of other institutions, direct competitors and similar organisations • identify opportunities to close the performance gaps by improving the processes • identify, in an objective way, your strengths and weaknesses • overcome internal resistance to change • justify activities, resources and methods in place • seek innovative methods to stimulate the thinking of internal groups
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Benchmarking Manual
Benchmarking helps to answer some questions: • Are we really achieving superior performances? • Are we sure that our improvement plan will make us world-class?
Benchmarking is not • a mere comparison of numbers • a simple “replica” or “alignment” operation • unrelated to the other activities / strategies of the organisation • a “tourism” activity between organisations • an activity carried out with “convenient” partners; on the contrary, partners’ selection should be based on their potential contribution to performance improvement
4
The benchmarking sphere
• Growth potential • Innovation potential • Financial performance potential • Skills acquisition potential
Comparisons with similar organisations
Strategic benchmarking
Operational benchmarking
Product benchmarking (philanthropic services-intervention)
• Projects • Project support services • Scientific and operational • models • Knowledge transfer
Strategic BMK What
• Time/operational costs for each activity • Management costs
Process benchmarking
Market research
Operational BMK
• Performance of processes & services offered • Claims/suggestions handling • Contractual fulfilment
Process BMK How
9
5
Benchmarking typologies
True innovation often comes from the comparison against organisations that operate within different sectors and with different scopes. Internal benchmarking It involves comparisons within the same organisation, among different functions, units or, as it often happens in larger organisations, the different branches or companies of the same group. Strategic benchmarking It is the comparison between similar organisations and can be conducted through third party research.
Functional benchmarking It involves comparisons at functional level between organisations, despite the sector they operate in. This approach makes the collection of data easier and often yields the most innovative practices. Generic benchmarking It is similar to functional benchmarking, but focused on processes that are common to every organisation. The benchmarking partner should be the “best in class� (an excellent organisation) and the comparisons are generic. The technological lack of homogeneity between an organisation and its benchmarking partner can make an objective comparison difficult, hence it is often advisable to engage an external consultancy company.
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Benchmarking Manual
Chapter II The benchmarking methodology
1 Plan phase 2 Collect phase 3 Analyse phase 4 Adapt phase
11
The benchmarking methodology
››The benchmarking concepts and methods presented
hereafter are inspired by the EFQM Benchmarking Methodology The EFQM approach has been developed as a result of a benchmarking study The contents of each phase are based on the best methodologies available
›› ››
What to benchmark Deciding what to benchmark implies the identification of the possible areas for improvement within the organisation, in light of the superior performances achieved by other organisations. The prioritisation of the process(es) to benchmark has to be based on the evaluation of:
››the actual performance of the process, hence the
identification of the processes that are in greater need of improvement the strategic importance of the process
›› PLAN COLLECT
Skills of the benchmarking team
ACT ANALYSE
1
Once the process to be benchmarked has been selected, it may be useful to map it (for example by creating a flowchart) in order to analyse and identify in more depth the problem areas within the process.
Plan phase
During the Plan phase one must: 1) Decide which process(es) to benchmark 2) Analyse the process and identify the benchmarking object 3) Form the benchmarking team 4) Develop a benchmarking plan
››Team spirit ››Strong motivation ››Ability to plan workload ››Knowledge of the processes, the organisation and the strategy ››Predisposition toward innovation ››Communication skills Development of the Benchmarking Plan The following have to be accurately described in the Benchmarking Plan:
››the activities and the resources (temporal, financial and human) necessary to carry out the benchmarking study ››the measures and the indicators that will be used both during the benchmarking study – to compare the organisation’s process performance with that of the benchmarking partners – and following the benchmarking study, to evaluate if and to which extent the implementation of improvement initiatives has produced the desired results
At the end of the Plan phase we suggest to use the “Check list – Plan phase” (paragraph 4.4).
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2
Benchmarking Manual
Information sources
Collect phase
During the Collect phase the project team has to: 1) Consult the information sources available for the research of benchmarking partners 2) Identify potential partners 3) Develop the screening questionnaire 4) Select partners 5) Collect data 6) Manage benchmarking site visits
• It is advisable to start by consulting and analysing the secondary research sources (documents and information readily available within the organisation or of public domain) before undertaking (expensive) primary research (i.e. information collected through studies and ad hoc surveys) • The secondary research is finalised to the creation of a first list of possible benchmarking partners. This research can have a qualitative and/or quantitative focus. Example of secondary research sources:
››Library research ››Consulting firms (and the networks or databases they base their researches on) ››Associations and professional organisations (chamber of commerce, public research agencies, etc.) ››On-line databases ››Universities, Business Schools ››Conferences and seminars N.B. A mediocre secondary research is a prime cause of benchmarking failure!
Data collection hierarchy
Direct contact Conference calls, phone interviews and BMK visits
Research and Investigation Questionnaires, surveys, consultant studies
Site visit Site visit questionnaire Screening survey Primary research
Public domain information Esperti e studi interni, referaggi
Internal information Internal studies and experts, referrals Low-key monitoring Press reports, newspapers, sector magazines, news
Secondary research
13
Data collection on the whole system Every process is part of a more complex system made of interacting parts: therefore, the data should be collected both on the specific benchmarking object and on the partner’s organisational system on the whole.
›› ›› ››
Process
Organisational Structure
• The organisation promoting the benchmarking study should illustrate the prospective benefits of the initiative to the potential partner • Identify the “benchmarking contact” (person appointed for the benchmarking initiative) within the partner organisation • Mail the screening questionnaire to: establish the willingness of the partner to participate determine the time requirements describe the benefits • Provide a copy of the Code of Conduct and highlight that the benchmarking study will be conducted according to its guidelines and principles • Conduct the screening
Technology Human Resources
Identify potential partners WHAT TO DO • Remember that an organisation does not excel in everything it does • Select more than one partner and identify the best elements from each • Select partners based on clear criteria • Verify that the organisation is a leader in the area of interest WHAT NOT TO DO • Select a partner in a random way, or based on “convenience” (for example, because it is located in the same territory or simply because it showed an interest in participating to the initiative)
Communicate with the potential partner • Once the list of potential partners has been drafted, a screening has to be conducted so as to identify the ideal partner for the benchmarking study: this screening is carried out by submitting a questionnaire (screening questionnaire)
Screening questionnaire • The screening questionnaire must focus on the key success factors related to the specific function or process that will be submitted to benchmarking • The screening questionnaire has to: be concise (no more than 20 questions) include “qualifying” questions (formulated expressly for the specific partner) contain closed and open questions, depending on the information to be collected: use the former when processes can be described through quantitative data, and the latter when process analysis can’t disregard qualitative information assign a weight to each question according to its importance (optional) be tested internally before sending it to the partner avoid ambiguous questions make easily understandable questions include only necessary questions, i.e. that can provide a clear and comprehensive view of the subject, and that are related to the functions and the processes to be benchmarked be sent to the partner before the site visit; this way they can comment on it, add other questions and collect data before the first visit.
›› ›› ››
›› ›› »» »» »» ››
14
Benchmarking Manual
Management of Benchmarking visits • Benchmarking visits, thanks to the direct comparison with the partner, facilitate the exploration of the benchmarking object (face-to-face visits usually favour the collection of sensitive information on the partner’s processes) • The visit should be scheduled after the conclusion of the secondary information collection and the analysis of the screening questionnaire results • For the positive outcome of the visit: the objectives and the specific subjects that are going to be explored during the visit are clearly defined each member of the team has the right competencies and, if needed, training sessions are arranged before the visit the team is organised in subgroups made of two persons, respectively dedicated to running the interviews and processing the report each subgroup has its own questionnaire and guidelines for the interview the hosting organisation has previously received the list of the areas of interest and the questionnaire
›› ›› ›› ›› ››
3
Analyse phase
During the analyse phase it is necessary to: 1) Analyse the benchmarking results 2) Identify the current performance gaps 3) Establish the causes of the performance gaps 4) Develop an improvement plan
Analyse the benchmarking results • Following the benchmarking visit, the work team should hold a debrief to compare notes and the information gathered by the various subgroups • Hold review sessions to: analyse the “lessons learned” from the benchmarking visit evaluate the benchmarking partner verify if the partner is really achieving better results understand what is causing the partner’s superior results quantify the performance gaps identify the partner’s best practices evaluate the opportunity to adopt and incorporate these best practices (and how)
›› ›› ›› ›› ›› ›› ››
Analyse performance gaps • Determine the performance gap between your process and your benchmarking partner • Use all the data – qualitative and quantitative – to assess strengths and weaknesses • Analyse the performance trends, other than its current values: higher current performances should not detract from the goal of continuous improvement • The reasons for the gaps can be understood by analysing: the processes the HR organisational structure operational location the systems and technologies in use • The cause and effect diagram (fishbone diagram by Ishikawa) can be used to understand performance gaps (what, how and why it happened)
›› ›› ›› ››
15
Develop an improvement plan By definition, benchmarking activities are aimed at collect information which will help the organisation develop an improvement plan. Therefore, every initiative should, end with the compilation of a benchmarking report, through which the work team can communicate and share the knowledge acquired. The improvement plan should be based on the information collected and indicate the performance objectives of the processes analysed. Performance targets should be established considering both the level of performance achieved by the excellent organisations, and the needs expressed – and considered priority – by the client/beneficiary. Furthermore, the improvement plan should indicate performance indicators at least for the key internal processes. Achievement of targeted levels of performance often requires process redesign (or redesign of a specific philanthropic intervention). The new designs, functional to the improvement process, can be multiple; therefore it is necessary to examine and draw up a rank order of the various alternative designs, before selecting the optimal solution. The following chart contains some of the criteria that may be used to rank the alternative solutions:
Performance criteria
Implementation criteria
• Impact on customer satisfaction
• Cost/difficulty to implement
• Impact on process performance: Process cycle times Error rates Cost savings …
• Implementation times
• Effects on employees
• Impact on other processes/organisations
• ...
• IT system requirements
›› ›› ›› ››
• Degree of process participants buy-in
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Benchmarking Manual
Every proposal of redesigned process should be supported by a business case, a document that provides the strategic and economic justification for the start up, prosecution or termination of the initiatives it refers to. The business case should illustrate:
››Basic Assumptions ››Benefits from »»a financial perspective »»an internal organisation perspective »»customer’s perspective »»the innovation and learning perspective ››Costs »»one-time »»on-going ››Risks »»sensitivity analysis »»strategies for mitigating risk The improvement plan should also ensure and provide for the: • design of the improved business system: Process, Technology, Organisation, People • integration of the goals into the organisational strategy • the key stakeholders’ support (process owner, management, customers/beneficiaries, etc.) • anticipation of possible barriers to implementation • definition of the project teams in charge of the implementation of the improvement plan • obtainment of the executive approval for implementation, i.e. of the content of the improvement plan and the resources required to implement it
4
Adapt phase
This last phase is concerned with: 1) The internal transfer of best practices 2) Overcoming resistance to change 3) Implementing the improvement plan 4) Managing and monitoring the implementation 5) Recalibration 6) Developing a plan for continuous improvement 7) Have an end-of-project revision
Internal transfer of best practices The ability to transfer best practices internally is correlated to: A. the completeness and the degree of deployment of the benchmarking approach adopted by the organisation. Special attention should be paid to: a clear definition of the roles of process owners, project leaders, and of the benchmarking support group the preventive definition of the modalities and procedures to adopt at the end of the benchmarking study to ensure the effective use of the results as input for strategic planning B. the availability and effective use of tools for sharing best practices. Examples: Department and team meetings IT/Intranet Workshops to present/discuss the end-of-project report Informative workshops …
›› ››
›› ›› ›› ›› ››
17
Overcome resistance to change
Management and monitoring: pilot test
Possible resistances to change have to be foreseen and the necessary actions to overcome them must be taken. The force field analysis is commonly used by organisations for the purpose of analysing the factors (forces) that can help (positive factors) or work against (restraining factors) meeting an objective. Different factors can obstruct the actual transfer of best practices within an organisation:
• Since no process design can be perfect, it is advisable to run a test to: verify the design prove the implementation plan Follow the implementation schedule Keep track of milestones achieved Revise the solution to reflect the “lessons learned” Monitor the results of the pilot test Measure process results to determine whether process performance has actually improved • Run a root-cause analysis to identify and take action if the process is not producing the desired results
››top management’s insufficient perception of the importance assigned to the benchmarking project ››difficulty or impossibility to standardise the best practice process ››organisational structures that encourage “silo thinking” (no sharing of the acquired knowledge within the different areas/functions) an organisational culture that fosters individual expertise rather than the creation and sharing of knowledge lack of contact and information exchange lack of time
››
›› ›› ›› ›› ›› ›› ››
Measure project performance
›› ››
Implementation of the improvement plan The implementation of the improvement plan must be managed in the same way as any other project: Identify each action Assign owners to each action Establish schedule and milestones Define measurements/indicators criteria Identify the resources required and justify with a business case
›› ›› ›› ›› ››
Did the plan work (were the desired results achieved)?
NO Root-cause analysis
Before implementation, it is advisable to run a pilot test to:
››demonstrate that the changes lead to the desired results ››demonstrate that the implementation plan is solid.
Review the plan and implement the necessary changes
YES
Continue to rollout
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Benchmarking Manual
Management and monitoring: rollout
Recalibration
• The rollout consists in the step-by-step implementation of the improved process, following the evaluation of the pilot results • A rollout plan should be developed to guide future implementation efforts. Such plan should include the following elements: description of the rollout approach implementation areas rollout responsibilities rollout schedule key milestones and measures of success resource requirements • Create process documentation (flow-charts, indicators, etc.) that can be used in different situations/areas of the organisation • Extend the implementation of the solution resulting from the pilot test – if applicable – to the other departments of the organisation • Define a training plan for all those affected by the solution
Research has shown that following the implementation of an improvement plan, nearly 50% of the organisations do not evaluate best practices to verify the real benefits obtained. However, the following questions should always be asked: • Have we reached the established objectives? • What is the current and future status of our benchmarking partner? • Do we need to review our goals and operational strategies? • Are there other organisations we should benchmark against?
›› ›› ›› ›› ›› ››
Plan for continuous improvement • Needs will continue to change… beneficiary needs change continuously new resources may become available inside the organisation the performance and/or the best practices of the other organisations can evolve • It is, therefore, necessary to adopt a continuous improvement approach to keep the process vital, as well as its capacity to respond to the needs
›› ›› ››
Project closeout review At the end of the project the benchmarking team should: • Prepare a presentation of the benchmarking study containing: an overview of the benchmarking process a summary of the main results the performance gaps compared to the best practices the improvement actions implemented the tangible and intangible benefits the resources used • Everyone interested in the implemented initiative should be involved in the presentation • Process a final report • Conduct an analysis of the “lessons learned” What worked What did not work What improvements can be made in the future to the process/method of benchmarking.
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›› ›› ››
19 Chapter III Operational benchmarking manual of Fondazione Cariplo The general methodology proposed by EFQM has been simplified and adapted to the needs of the Fondazione Cariplo, and the benchmarking tools and internal procedures have been accordingly selected and defined. The benchmarking code of conduct proposed by the foundation is based upon the codes used by EFQM and APQC (standard of the American Productivity & Quality Center).
1 The Benchmarking Code of Conduct 2 Flow-chart of the benchmarking process
20
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Benchmarking Manual
The Benchmarking Code of Conduct
Principle of preparation The Fondazione Cariplo shall:
››
›› Demonstrate commitment to the efficiency and
››
››
Benchmarking must be conducted in an ethical way: it is based on the principle of free exchange of information to benefit all the parties involved It is essential to carry it out within an ethical framework, such as the European Code of Conduct of benchmarking, that contains a series of outlining principles Preparation Contact Exchange Confidentiality Use Legality Completion Understanding and Agreement
›› ›› ›› ›› ›› ›› ›› ››
Introduction
›› Benchmarking - the process of identifying and learning from good practices in other organisations - is a powerful tool in the quest for continuous improvement and performance breakthroughs The Fondazione Cariplo guarantees the confidentiality of the information and an ethical behaviour in the benchmarking operations carried out by its employees, both inside the foundation and towards external organisations The present code is aimed to guide benchmarking encounters and to advance the professionalism and effectiveness of benchmarking in the non-profit sector
››
››
Adherence to this code will contribute to efficient, effective, actual and ethic benchmarking.
effectiveness of benchmarking by being prepared prior to making an initial benchmarking contact Prepare in an adequate way every benchmarking meeting to make the most of the benchmarking partner’s time Help benchmarking partners prepare by providing them with a questionnaire and agenda prior to benchmarking visits Request legal advise every time it is deemed necessary, before starting any benchmarking contact, and in particular before sending out the questionnaires
›› ››
Principle of contact The Fondazione Cariplo shall: Respect the partner’s organisational culture and cooperate on the basis of shared procedures Use benchmarking contacts designated by the partner organisation if that is the preferred procedure Agree with the designated benchmarking contact how communication or responsibility is to be delegated in the course of the benchmarking exercise, and ensure the reciprocal comprehension of these procedures Obtain an individual’s permission before providing his/ her name in response to a contact request Avoid communicating a contact’s name in an open forum without the contact’s prior permission
›› ›› ›› ›› ››
Principle of exchange The Fondazione Cariplo commits to: Make available the same level and type of information that is requested to the benchmarking partner, provided that the principle of legality is observed Communicate fully and early in the relationship to clarify expectations, avoid misunderstanding, and establish mutual interest in the benchmarking exchange Be honest and complete
›› ›› ››
21
Principle of exchange The Fondazione Cariplo shall:
›› Treat benchmarking findings as confidential to the individuals and organisations involved ›› Not communicate such information to third parties
without the prior consent of the benchmarking partner who shared the information. When seeking prior consent, the foundation and the benchmarking partners shall specify clearly what information is to be shared, and with whom Consider the participation of an organisation in the benchmarking activity confidential, hence it shall not be divulged to the outside without the organisation’s prior permission
››
Principle of use The Fondazione Cariplo commits to: Use the information obtained through benchmarking for the sole scope defined and agreed for with the benchmarking partners Request authorisation from the partner before using communication of its name with the data obtained or the practices observed Not to use in any form the contact lists or other contact information provided by benchmarking networks for purposes other than benchmarking
›› ›› ››
›› Not discuss, disclose or use any confidential
information that may have been obtained through improper means, or that was disclosed by another in violation of a duty of confidentiality Not pass on - as a consultant, client or otherwise – benchmarking findings to another organisation without first getting the permission of the benchmarking partner and without first ensuring that the data is appropriately “blinded” and anonymous, so that the participant’s identity is protected
››
Principle of legality
Principle of completion
The Fondazione Cariplo commits to: Take legal advice if there is any question regarding the legality of an activity If the benchmarking is conducted with for-profit organisations: Avoid discussions or actions that could lead to or imply an interest in restraint of trade, market and/ or customer allocation schemes, price fixing, bid rigging, bribery or any other competitive practices Not discuss the pricing policies of the partner with competitors Refrain from the acquisition of information by any means interpreted as improper, including the breach or inducement of a breach, of any duty to maintain confidentiality
The Fondazione Cariplo commits to: Follow through each commitment made to the benchmarking partner in a timely manner Endeavour to complete each benchmarking study to the satisfaction of all benchmarking partners as mutually agreed
›› ››
»» »»
››
›› ››
Principle of understanding and agreement The Fondazione Cariplo commits to:
›› Identify and take ownership of the partner’s expectations and behave accordingly ›› Agree with the partner on how to share and disclose the information provided, and do not use it in any way that would break that agreement
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Benchmarking Manual
Benchmarking protocol The participants to the benchmarking activity: Know and abide by the benchmarking Code of Conduct of Fondazione Cariplo Have basic knowledge of benchmarking and follow the benchmarking process defined by the foundation Before initiating contact with potential benchmarking partners they should have: determined what to benchmark identified key performance variables to study recognised superior performing organisations completed a rigorous internal analysis of the process to be benchmarked Prepare a questionnaire and interview guide, and share these in advance, if requested Possess the authority to share and are willing to share information with benchmarking partners Work through a specified contact and mutually agreed agreements
›› ›› ››
»» »» »» »»
›› ›› ››
When the benchmarking process proceeds to a face-toface site visit, the following behaviours are encouraged: Provide the meeting agenda in advance Maintain a professional, upright, courteous and dynamic behaviour Introduce all attendees and explain why they are present Adhere to the agenda Be sure that neither party is sharing proprietary or confidential information unless prior approval has been obtained by both parties, from the proper authority Share information about your own process, and if asked, consider sharing study results Offer to facilitate a future reciprocal visit Conclude meetings and visits on schedule Thank your benchmarking partner for sharing the information on its process
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23
2
Flow-chart of the benchmarking process
Activities
Phases
Define priorities / macro-themes of the BMK program
SG
BMK
Project
BMK
Bod
Team
partner
Bodies
Support
Document / Tool
Team Annual program plan
START
Create project team
P L A N
Decide what to benchmark
BMK process prioritisation matrix
Develop a benchmarking plan
Benchmarking plan
Verify Plan phase check List
Plan Phase - Check List
Forward benchmarking proposals
Benchmarking proposal
Approve BMK proposals
Notes on the evaluation of the proposals (to forward to BoD)
YES
Select BMK proposals
NO
YES
BoD meeting minutes
NO
C O L L E C T
A N A L Y S E
Consult information sources and identify potential BMK partners
Secondary sources Primary sources
Develop and test screening questionnaire
Screening questionnaire
Select partner
BMK partner selection matrix
Submit screening questionnaire and gather data Manage benchmarking visits, if applicable
BMK visit agenda
Verify Collect phase check list
Collect Phase - Check List
Analyse BMK results, identify performance gaps (and its causes)
Cause and effect diagram
Process benchmarking report
Benchmarking report
Communicate/share benchmarking report: int /@lab
Communication plan
Verify Analyse phase check list
Analyse Phase - Check List
Evaluate opportunity to develop an improvement plan
NO
SG notes BoD meeting minutes
YES (Re)Set up project team A D A P T
Develop an improvement plan to transfer best practices internally
Improvement plan
NO
Approve the improvement plan Manage and monitor improvement plan implementation
YES
Verify Adapt phase check list
Adapt Phase - Check List
End of process Process owner
Meeting minutes
END
Secretary General
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Benchmarking Manual
Chapter IV Operational tools & templates
In this section some tools, techniques and operational advices are offered to support benchmarking activities. Some of these tools are specific to benchmarking, others are widely used within the management and organisational field throughout the world.
1 Collection of benchmarking proposals 2 Prioritisation of the benchmarking process 3 Benchmarking plan: structure 4 Check list – plan phase 5 Screening questionnaire 6 Selection of the benchmarking partners 7 Partner selection matrix 8 Agenda for benchmarking visits 9 Check list – collect phase 10 Cause and effect diagram 11 Benchmarking report: structure 12 Check list – analyse phase 13 Improvement plan 14 Check list – adapt phase
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1
Collection of benchmarking proposals
Benchmarking projects’ proposals can be brought to the attention of the Secretary General by the different departments of the Foundations (Strategic observatory, Senior Program Officers, Project leaders, Committees). Benchmarking projects can be referred, within the philanthropic field, to the processes and strategic goals of the foundation, as well as to the analysis of possible new complex projects. The presentation of the project proposal must include: Reference to the micro area / process to be benchmarked Brief description of the benchmarking project objectives Hypothetical project team and benchmarking partners Estimated project’s time
›› ›› ›› ››
2
In order to successfully prioritise the process to be benchmarked it is necessary: • To evaluate the strategic role of each process by attributing a score based on the contribution of each process to the realisation of one or more Critical Success Factors (use an evaluation scale from 1 to 10, with 9 = substantial contribution, 6 = good contribution, 3 = weak contribution, 0 = no contribution) • Identify the criteria to analyse the process Performance: these criteria should consider both the internal performance measurement and the measurement of the clients’ external perception on the process performance (use an evaluation scale from 1 to 5, with 5 = excellent performance, 3 = good performance, 2=poor performance, 1=embryo phase) • Sum up the scores that each process obtained based on the performance criteria; perform this operation for the “strategic importance” variable.
Prioritisation of the benchmarking process
The matrix that follows analyses two dimensions of the process: Strategic importance of the process: how strategic is this process for our business? Current performance of the process: how well is the process being performed?
›› ››
Performance (internal/external)
1
2
3
4
5
Overall strategic importance ∑
P1
3
9
0
3
6
21
2
1
3
2
12
P2
0
1
6
0
9
16
4
5
3
4
19
P3
3
3
6
6
0
18
2
2
4
2
15
0
0
3
9
3
15
3
2
1
2
10
3
6
3
0
6
18
4
2
3
4
18
Process Variables
Pn Arithmetic mean
Critical success factors
17,6
2i
3i
4e
5e
Overall performance ∑
14,8
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Benchmarking Manual
• Transfer the scores of the processes analysed in the previous matrix on Cartesian axis, indicating on the abscissa the variable “strategic importance” of the process, and on the ordinate the process “performance”, maintaining as value at the origin of the axis the arithmetic means obtained for the two variables Average Performance
P2
19
Pn
18 17 16
P3
15
15
16
17 14 13 12 11
Px
18
19
20
21
Average Strategic Importance
P1
10
The processes above average strategic importance but below average process performance, are a priority for improvement and benchmarking.
3
Benchmarking plan: structure
The benchmarking plan should include: A mapping and analysis of the process, the indication of the problem areas and explanation on why a benchmarking project is deemed to be significant and useful Description of the work team, its competencies, and of the workload distribution Identification of an adequate set of indicators/ measurements for the process Description in detail of the activities that are going to be carried out Information on the potential benchmarking partners Project’s time requirements Project’s management costs
›› ›› ›› ›› ›› ›› ››
The benchmarking plan must be submitted to the Secretary General and eventually be approved by the Board of Directors.
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4
Check list – plan phase C H E C K
L I S T - P L A N P H A S E
1
The key processes of the organisation have been prioritised and priorities shared with the benchmarking process owner?
2
Has the selected process been mapped and analysed?
3
Have the beneficiaries of the process and their needs been clearly identified?
4
Have the problem areas within the process been identified?
5
Has a work team with the appropriate skills been formed?
6
Does at least one member of the work team have a good knowledge of the benchmarking methodology?
7
Has an adequate set of indicators/measurements for the target process been defined in order to allow its performance (time, cost, quality) to be benchmarked against others?
8
Has a project plan, containing a detailed description of the scheduled benchmarking been carefully defined?
9
Have the resources indicated in the project plan been approved by the benchmarking process owner and/or other competent bodies?
10
Has a checkpoint review been held with the benchmarking process owner, to verify the project plan and to obtain approval to move to the collect phase?
5
Screening questionnaire
The screening questionnaire must: Lead to a list of final potential benchmarking partners Allow to identify “good practice” partners deemed worthy of a site visit Be based on the information gathered during the plan phase and on the questions that remained unanswered after the analysis of the secondary data; this information must not refer exclusively to the benchmarking process but to the whole context the organisation operates in, the dominating culture, people competencies, etc… Be tested before being distributed Be the result of cooperation among the potential partners so that all the participants can benefit from it The modality and time of collection of the questionnaire – by fax, email, phone, etc - has to be previously agreed with each partner.
›› ›› ››
›› ››
6
✓
Selection of the benchmarking partners
• Once the benchmarking plan is approved, the team should identify the potential partners by using the criteria the team considers more fitting • Secondary research should lead to the identification of a set of candidates, coherently with the benchmarking typology the team intends to carry out (internal, competitive, functional or generic benchmarking) • A selection matrix can be used to identify benchmarking partners, by listing all the organisations and attributing a score to each (going from 1 to 10), on the basis of predetermined criteria • The organisations with the highest score represent the “best potential partner”
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Benchmarking Manual
Partner selection matrix Partner selection criteria Potential partners
e.g.: ease of gathering information
e.g.: importance of information
e.g.: innovative contribution
etc.
etc.
Overall score
Internal Partner a Partner b Partner c Strategic Partner d Partner e Partner f Functional Partner g Partner h Partner i Generic Partner j Partner k Partner l
8
Agenda for benchmarking visits C HE C K L IST - BEN C HMAR K ING V ISIT
1
Has the host partner agreed and been provided with a visit agenda beforehand?
2
Have the areas of interest/processes that are going to be investigated in depth been identified?
3
Has the team identified the objectives/specific issues it wants to learn during the benchmarking visit?
4
Did a preparatory meeting with the work team take place before the visit?
5
Have flexible questions/guidelines been processed for the interviews?
6
Has the host organisation been anticipated the areas of interest and the questions?
7
Has it been established which members of the team, based on their expertise, will lead the questioning in each area and who will process the report?
8
Has a communication plan that guarantees, at the end of the visit, an effective sharing of the knowledge acquired, been developed?
9
Has a written report been processed?
✓
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9
Check list – collect phase C HE C K L IST - C O L L E C T P HASE
✓
1
Has a detailed secondary research been conducted?
2
Has the list of potential benchmarking partners been shared with the Legal Service and/or other bodies/departments that could usefully contribute to the correct identification of the partners and/or highlight possible constraints or counter indications to certain choices?
3
Have the potential partners been contacted?
4
Has the screening questionnaire been tested internally?
5
Have methods and criteria to collect data been defined?
6
Has a clear and concise set of questions been developed and discussed with the partners?
7
Has the method of data analysis been developed and verified using pilot test data?
8
Has a site visit agenda been drafted and agreed with the partners?
9
Have the site visit findings been documented in a report?
10
Have all the commitments made to partners and survey participants been delivered?
11
Has a collect phase checkpoint meeting been held with the benchmarking process owner and has agreement to move to the next phase been reached?
10
Cause and effect diagram
The cause and effect diagram, also known as fishbone diagram by Ishikawa, can be a useful tool to identify the causes of performance gaps (what, how and why it happened).
cause (methods)
cause (methods)
cause (...) EFFECT
cause (materials)
cause (equipment)
cause (...)
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Benchmarking Manual
Benchmarking report: structure
Section A - Introduction 1
Executive summary
2
Benchmarking object
3
Project team
4
Partner (and selection criteria)
5
Sponsor (if applicable)
››Project motivations ››Summary of the methods used (WBS, workshops, meetings, screening questionnaire, site visits…)
››Main results achieved ››Good practices identified
Section B - Site Visits 8
Site visit - partner 1
9
Site visit - partner 2
10
…
Section C – Screening 11
Screening questionnaire
12
Screening results
Section D – Project time / costs 13
Project planning (Gantt/Pert)
14
Budget / final costs
Section E – Lessons learned 15
Comments and advice on the benchmarking methodology / project
Sezione F – Azioni di miglioramento 16
Proposal of possible improvement actions
Appendixes 17
Information sources
››For each site visit describe the partner and its good practice
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12
Check list – analyse phase C HE C K L IST - ANA LY SE P HASE
1
Has a debriefing of the benchmarking team been held after the benchmarking visit?
2
Has a detailed analysis of collected data been run?
3
Has a root cause analysis been conducted for each performance gap and have all the causes been identified?
4
Have future performance trends and target performance levels been established?
5
Have improvement actions been planned?
6
Have alternative solutions been evaluated and the best one selected?
7
Has an implementation plan been prepared for each improvement action?
8
Has a checkpoint meeting been held with the benchmarking process owner to verify the analyse phase and reach an agreement regarding the possible solutions, resources and timeframes necessary to implement an improvement plan? Has the approval been obtained to proceed to the adapt phase?
13
Improvement plan
The improvement plan must be prepared on the basis of the analyse phase results and of the improvement actions suggested in the benchmarking report. It should provide for: Summary of the benchmarking results Performance targets and indicators Process redesign Identification of the strategies to be implemented Definition of the work teams Indication on the implementation time frames Evaluation of the impact on other processes Specification of the costs Proposition of a continuous improvement plan The improvement plan must be submitted to the Secretary General and to the Board of Directors.
›› ›› ›› ›› ›› ›› ›› ›› ››
✓
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Benchmarking Manual
Check list – adapt phase C HE C K L IST - A D A P T P HASE
1
Have the benchmarking findings been documented in a written report?
2
Has the report been provided to all the participants in the benchmarking study?
3
Has a force field analysis been conducted and have actions to reduce resistance to change been incorporated into the implementation plans?
4
Have pilot tests to verify the process design and the implementation plan been completed?
5
Has a plan for continuous improvement of the process been agreed upon and implemented?
6
Has a lessons learned review been conducted and have consequent improvements to the benchmarking process been implemented?
7
Has there been a project closeout meeting with the process owner to verify that all the objectives of the benchmarking exercise have been achieved?
8
Has benchmarking become an integral part of the continuous improvement planning and strategy of the organisation?
✓
33 Appendix
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Benchmarking Manual
Screening questionnaire Selection of the benchmarking partner
General information on the potential benchmarking partner organisation Name / Surname Title Organisation Address ZIP Code City Country Telephone Email Fax
Information on the activity of the potential benchmarking partner organisation
Type of organisation Specify legal status:
profit ______________________________
non profit _________________________________
Primary intervention sector(s):
If a profit:
Pharmaceutical/chemical Distribution Transportation IT/electronics Food
Insurance Banking/financial Consultancy Telecommunications Other: ____________________
If a non profit:
Arts and culture Scientific research Environment Social services Socio-sanitary assistance
Sports and entertainment International activities Education/training Other: ____________________
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Benchmarking object: Management of projects on the theme of “________________”
1. Are projects on the theme of “_____” provided for in the mission and/or strategic planning of the organisation?
no yes comments ___________________________________________________________________ ___________________________________________________________________
2. Has the organisation realised projects on the theme of “_____”?
no sì Indicate a project that you consider a “good practice”: ___________________________________________________________________ ___________________________________________________________________
3. What are the reasons that lead to the start of the project on the theme of “_____”?
• • •
___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________
4. Have the project objectives on the theme of “_____” been clearly defined?
no yes Brief description of the objectives:: ___________________________________________________________________ ___________________________________________________________________
5. Briefly describe the project strategy (i.e. realisation phases, modalities, time frames, budget, etc…)
__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________
6. Has the project on the theme of “_____” allowed to resolve successfully specific problems?
no yes what: ___________________________________________________________________ ___________________________________________________________________
7. Indicate the factors that have contributed the most to the success of the project:
Innovative character of the project Experience of the project partners Financial resources allocated to the project Measurability / visibility of the results Other: ___________________________________________________________________ ___________________________________________________________________
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8. If the project has been realised in partnership with other organisations: what criteria was the selection of the partner based on?
Geographical Activity sector Expertise in managing similar projects Financial Possible strategic impact Other: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________
9. Briefly describe the process of partners’ research and selection
__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________
10. The roles and responsibilities of the project partners
11. The organisation resources used in the project
12. The project evaluation process
10.1 Were they established? no yes 10.2 Were they formalised in a document? no yes 11.1 Have they been specifically assigned to it? no yes comments ________________________________________________________________ ________________________________________________________________ 11.2 Have they been selected based on specific competencies and qualifications? no yes comments ________________________________________________________________ ________________________________________________________________ 12.1 Was it laid out and formalised no yes comments ________________________________________________________________ ________________________________________________________________ 12.2 Is it based on systematic measuring criteria? no yes comments ________________________________________________________________ ________________________________________________________________
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13. In evaluating the project what aspects were measured and / or evaluated?
14. Indicate three strengths and three weaknesses of the project
Results Impact Costs/financial management Risk Competencies
Strengths: 1. __________________________________ 2. __________________________________ 3. __________________________________
Knowledge sharing Lessons learned New follow-up actions Other: ______________________________ ______________________________ Weaknesses: 1. _________________________________ 2. _________________________________ 3. _________________________________
15. Were the lessons learned at the end of the project used to implement follow-up improvement actions?
no yes What: ___________________________________________________________________ ___________________________________________________________________
16. Have the results of the project contributed to the definition of best practices?
no yes
17. Have the results of the project been shared?
18. Indicate the project phases in which the organisation bodies (Board of Directors) are involved
17.1
Within the organisation? no yes specify how: ________________________________________________________________ ________________________________________________________________ ________________________________________________________________
17.2
Outside the organisation? no yes specify how: ________________________________________________________________ ________________________________________________________________ ________________________________________________________________
Entire process Only for strategic matters For approvals For financial matters Bodies are not involved
Other phases ______________________________ ______________________________ ______________________________
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19. Does the management of the project abide by a Code of Conduct?
20. Attach a summary of the project
Benchmarking Manual
no yes comments: ___________________________________________________________________ ___________________________________________________________________