Organizational Excellence for the human side of business

    You Don’t Need to Use Competitors for Benchmarking

    Benchmarking“Benchmarking is a way to study the methods of ‘best organizations’ to adopt their ideas, and to become, quickly and efficiently, the best in the world” (Balm, 1992). When we think of benchmarking, the first thing to come to mind is to seek out what our competitors are doing better than us, and then copy that practice. But this concept immediately creates two obstacles when taking advantage of this awesome methodology. First, it’s difficult to ask your competitors if they would mind sharing details about a best in class practice that gives them a larger share of the market. After all, they are your competitors. Secondly, even if you were to copy what your competitor does well. It doesn’t make you better than the competition, it simply makes you the same, which is not a fantastic motivator for enticing their customers to use your products and services instead.

    One way around this conundrum is to think outside of the box, or in this case, think outside of your industry. A fantastic example of this is when Apple Inc. decided launch their famous Apple Stores in 2001. How did Apple design and launch its own stores when the company had no retailing experience? As the development team responsible started designing its stores, it asked an 18-person focus group to describe the best service experience they’ve ever had, and 16 of the 18 respondents referred to a hotel. How do you create a store that has the friendliness of a Four Seasons Hotel? You put a bar in the store. But instead of dispensing alcohol, you dispense advice. Thus was born one of the signature elements of the Apple Store, its Genius Bar, where Apple experts dole out tips, field questions, and perform repairs on Macs, iPods, and iPhones. The Apple Store’s emphasis on friendliness extends well beyond the Genius Bar however. Apple Store employees are instructed to treat customers like season ticket holders; people who will visit again and again, before and after their purchases. Training procedures encourage employees to “be who you are” and answer difficult questions with, “I don’t know, let’s find out.” That relaxed atmosphere, together with the positive buzz generated by Apple’s products, makes the Apple Store a popular place to work. Apple reports that it turns away 90 percent of its applicants.

    How well is this retail strategy working? Well, at the time that Apple opened its 174th store, with an iconic glass cube entrance on New York City’s Fifth Avenue, Apple Stores were generating $4032 in sales per square foot. Want some perspective on that number? The world-famous jeweler Tiffany & Co. sits half a block away and takes in $2666 per square foot. Strangely enough, the information for the above case study on Benchmarking came from a book on Organizational Behavior by Jason Colquitt, Jeffery LePine and Michael Wesson. It just goes to show that “what you’re looking for” isn’t necessarily where “you think you’ll find it”.

    Leave a Reply

    Your email address will not be published. Required fields are marked *