Game Changers - Benchmarking

As we have discussed in resent postings, The Game is Changing!


It has been said that, "A bend in the road is not the end of the road, unless you fail to make the turn". Does your road have a bend ahead? Can you see it or is shrouded in darkness and fog? Are you prepared for it? Are your skills sufficient to negotiate it successfully?


We all travel our own unique practice path defined by education, experience, geography, facility, services, systems, resources, values, philosophy, team, etc. But it is important to remember that each person's unique path is in many ways just like everyone else's!


Thus there is opportunity and value in learning from what others are doing.


I have the distinct privilege every week to talk with many practices across the country and around the world - to understand their challenges, to learn about what they are doing, and to influence the decisions they make and the strategies they implement. Over the next several weeks I will be sharing with you what I am working on with leading practices.


Hint: There's a reason why they are leading practices!


Let's begin with BENCHMARKING.


Benchmarking is the science and discipline of objectively and quantifiable comparing the performance of one thing to another. School teachers compare student performance with grades of A - F, grade point averages - 0 - 4, and class rankings from 0-100. Athletic performance is compared by benchmarking certain performance statistics that are relevant to a particular sport - yards rushing, batting average, shots on goal, shooting average, etc). Wall Street uses benchmarking to compare the performance of various investments - stock price, return on investments, shares traded, EBITDA, PE Ratio, etc. The auto industry benchmarks its products through spec sheets - horsepower, torque, acceleration 0-60 mph, miles per gallon, etc.


Benchmarking provides a systematic methodology for ranking, evaluating, and tracking performance. Benchmarking is transparent - it makes differences obvious. Benchmarking is discriminatory - its purpose is to differentiate and stratify performance. Benchmarking identifies differences, defines priorities, demands decisions, and justifies rewards.


Like GPS, benchmarking tells you where you are, what direction you are headed, your relationship to your destination, and how fast you are traveling. Being lost can have two elements - not knowing your destination or not knowing your location! Both may be solved with accurate information.


In business there are three types of benchmarking:
1. Performance benchmarking measures and compares performance statistics. ...where are we?
2. Operational benchmarking defines and compares work processes and systems. ...what roads are we taking?
3. Prescriptive benchmarking establishes and details best practices for replication. ...who can give us directions?


Each benchmarking strategy offers opportunity to improve performance, increase competitiveness, and earn greater reward. Together the strategies enable businesses to get "un-lost", to find its way out of the woods, to get on the right road, to find Shangri la.


In the health services sector key benchmarks include operational, utilization, and financial metrics. A comprehensive benchmarking dashboard includes approximately three dozen points of comparison (metrics). Each metric provides a unique reference point although incomplete perspective on practice performance. Together benchmark metrics tell a story - a story of achievement and failure, a story of missed reward and future opportunity.


Every practice has room for improvement. Not one-time improvement but improvement that once-secured will provide enhanced reward day after day for years to come! Leading practices understand that benchmarking is a low cost investment with a guaranteed return on investment.


Make no mistake, benchmarking is all about improving profitability, competitive advantage, and building practice equity!


Benchmarking is a simple but sophisticated process. The results are transformational - a real Game Changer! Where is your road taking you?


The next post will consider variable compensation - a potent and necessary Game Changer!


All The Best!


Bob


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Performance Builders