How benchmarking can drive innovation in your company

Markets are competitive, and surviving as a business is a constant challenge. Luckily, there are tools available that make this challenge a little easier. Or, at the very least, that it serves as a roadmap or reference. This sheet is benchmarking, which, as we will see, consists of analyzing other companies, whether they are direct competitors or not, to identify aspects that make them stand out and to be able to incorporate them later. After reading this article, you will be able to do the same with your business.

What is benchmarking and how does it work?

Both Pablo Picasso and Steve Jobs once said that good artists copy, and great artists’ steal. The quote is from neither, nor although there are many theories, it could come from the writer W. H. Davenport Adams, who said that imitation was advisable, but that stealing was not worth it.

Benchmarking is along these lines. It is a process of research and analysis of who is a leader in a particular activity. However, there are different types, and depending on which one you are talking about, both what is analyzed and the procedure to be performed vary. Thus, a distinction can be made between competitive, collaborative, generic, internal, or functional benchmarking. It is also necessary to differentiate benchmarking from the study of the competition.

As for the procedure, it consists broadly of researching and collecting data from other companies, and then comparing it with one’s own. From there, and in order to develop business innovation, new and creative ideas are generated, with the aim of improving performance, and even exceeding that of the original strategy.

Therefore, we could say that benchmarking is equivalent to imitating other companies, whether they are in the same sector or another, since practices can be adapted. But be careful, always within the law. These ideas that are obtained are worked on and applied in the organization that carries out the study. In this way, competitiveness is increased, innovation is increased and current market trends that work are progressively incorporated.

Why can benchmarking help you drive innovation?

Identification of current trends

Technological advances are happening at such a speed that it is difficult to keep up with everything. And precisely because of the definition of benchmarking, it is sometimes necessary to pay attention to what other companies are doing to know what new opportunities and possibilities have emerged. Even if it is another sector or activity, it is always possible to come up with an idea or trend that can be applied to the company in question.

Knowledge of current practices

As with innovations and trends, and as we have already seen in the types of benchmarking, this process reveals the methodology that other companies are following to become leaders in these practices. It doesn’t have to involve copying your entire management model, but simply observing what works for you and brings you benefits. This will then be incorporated and adapted to the company you are looking to improve.

Broader market vision

Those spaces that we visit regularly end up becoming invisible to our eyes. That is, we stop paying attention and don’t even notice when something changes. The same is true when it comes to a business or activity in which you operate daily. Vision often ends up narrowing and it becomes difficult to perceive errors or aspects that could be improved.  Benchmarking opens our eyes to new practices and methodologies, which will then be converted into innovation in the company to which they are taken.

Reduced-risk experience

Innovation is an area that is not exempt from risk, since it consists of implementing new ideas, products, services, or ways of working in a company. Even if there is a study behind it so that the objective of increasing income can be achieved, unforeseen events may happen, or the result may not be as expected.

The advantage offered by benchmarking is that these are proposals that are already working in other companies. Of course, their application in one’s own business will have similarities and differences, but it is assumed that they have already been tested. This experience means investing fewer resources.

As a practice for reviewing processes and evolving, benchmarking has exhaustive research behind it. At Ideafoster we can be your innovation partner and advise you in all those areas in which you want to improve. Contact us and book your consultation session.