Measuring to improve performance is good management practice. But it doesn’t count for anything unless you apply the lessons learned from the data, says Andrew Brown, freelance PR and writer.
Benchmarking is all about measuring or assessing the performance of something relative to another similar item in a consistent and impartial manner. Think about that for a moment. It is not new. We do it all of the time. Perhaps because it is such a widely used management term that it is dismissed or disparaged, but in every walk of life, someone somewhere is making a comparison and reaching a judgement based on some form of benchmarking.
To those uninitiated to the school of management measurement it might seem new, or worse, just be another piece of consultancy speak, but its roots stretch back to 19th century. The term is attributed to mid 19th century land surveyors who sought a consistent way of mounting measuring equipment, but a more likely source is that the term benchmarking was first used by cobblers to measure people’s feet for shoes. They would place someone’s foot on a ‘bench’ and mark it out to make the pattern for the shoes.
Now, particularly in industry and business circles, benchmarking is used to measure performance using a specific indicator. Facilities managers reading this already know that this might be anything from cost per unit of measure, productivity per unit of measure or more likely a specific service level agreement or key performance indicator specific to a contract agreement. Whatever the agreed measure, the result is what counts – a metric of performance that is then compared to either the performance of other organisations or a previous agreed standard.
However, benchmarking as it is properly understood is more about comparing one’s business processes and performance metrics to industry bests or best practices from other industries. The best and most recent example of this in the UK is in the construction sector.
Since the government commissioned Latham and Egan reports into industry performance, the adoption of key performance indicators has been widespread. This needs placing in context. UK construction in the late 1990s was regarded as being unproductive, over budget and underperforming – the Latham and Egan reports made key recommendations. Egan specifically argued that 20% savings and overall efficiencies could be found by working collaboratively – indeed, key performance areas could be improved upon this way. Hence, the reason why Key Performance Indicators (KPIs) play such a crucial role in the monitoring and improvement of the UK construction sector.
Construction had to improve, but its customers also needed a clear reliable way to determine which supplier was most reliable. Dimensions typically measured are quality, time and cost. In the process of benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compare the results and processes of those studied (the ‘targets’) to one’s own results and processes. In this way, they learn how well the targets perform and, more importantly, the business processes that explain why these firms are successful.
The core construction KPIs are accident frequency rates; if the scheme is on schedule; and if it is in budget. Recently, the benchmarks have begun considering the importance of low carbon and waste management but will also cover issues such as snagging, response times to specific incidents as well as overall customer satisfaction. Headlines tend to focus upon the rate of accidents (deaths on construction sites remain too high), budget performance and schedules, but the underlying KPIs are what sectors such as facilities management can learn from. Because FM does need to learn from other industries.
Much of what FM suppliers deliver is about planned and reactive services. It might be cleaning, it might be the management and maintenance of the building fabric – but it all needs to be done to a required standard. That standard will be agreed specifically at a tender and contract level and then finalised in detail between the client and account managers. Each party will know instinctively if things are going well or not, particularly if they are working in a true partnership arrangement.
This is crucial. If customer and supplier trust each other then a more informal benchmarking process might operate. However, the scale of a project or the specific relationship between client and FM provider might require a more formal measurement arrangement with clear and defined service level agreements and reporting procedures.
But it is not what you measure that is the most important thing; it is important but how you measure affects the results you obtain and then none if it is worth the effort if you choose not to do anything with the data that has been secured. So, it is important to agree why you are benchmarking as well as what you are measuring and how you will use the information to improve performance.
Customer service is always used as a differentiator between different facilities management providers, so let’s use this as a benchmark example. FMs must be seen to respond to calls from their customers quickly and efficiently – it has to have an effective customer service helpline. So, a customer service department may have, as one of its KPIs, the percentage of customer calls answered in the first minute. A KPI for a development organisation might be the number of defects in their code. It might make sense for the customer service to record how many calls it receives but also for its service teams to record how quickly they reacted to the initial call and in what time the complaint or request was resolved and to what degree of satisfaction. It is in effect an ongoing audit of performance.
How you measure is as important as what you measure. In the previous example, we can measure the number of calls by having each team member count their own calls and tell their supervisor at the end of the day. We could have an operator counting the number of calls transferred to the service department. The best option, although the most expensive, would be to purchase a software program that counts the number of incoming calls, measures how long it takes to answer each, records that answered the call, and measures how long the call took to complete. These measurements are current, accurate, complete and unbiased. Fortunately for the FM industry the various operating software packages allow for this. But it still has to be applied and then the results taken heed of.
Collecting the measurements in this way enables the manager to calculate the percentage of customer calls answered in the first minute. In addition, it provides additional measurements that help him or her manage toward improving the percentage of calls answered quickly. Knowing the call durations lets the manager calculate if there is enough staff to reach the goal. Knowing which team members answer the most calls identifies for the manager expertise that can be shared with the rest of the team.
FM is often regarded as a young industry; one that is fast maturing but emerging from the shadows of other built environment disciplines. The faster it grows and the more UK industries realise its potential, the more the FM professionals and their customers must adopt benchmarking. FM has a great deal to offer the UK and the global economy – FMJ readers know that already – but it can achieve its potential by the adoption of benchmarking throughout the industry and if, like the construction sector, the data is shared openly.
April 2012 was benchmarked as the UK’s wettest for more than 100 years. Flood warnings were in place across extensive areas, yet the UK Environment Agency chose the same month to impose a hosepipe ban to preserve water stocks. Though three times the usual rain fell; it was apparently the wrong type of rain. The benchmark is only part of the story. Benchmarking is useful and important in providing a ready comparison. But it is the pertinent data, patterns and stories behind that benchmark that is of most use to organisations who adopt the use of common standards.
In July, Zurich published a report that made some strong criticisms of the FM and commercial real estate market. It highlighted that not enough focus is being paid to the importance of workplace effectiveness. If its findings are correct then if FM professionals and their CRE colleagues are going to create and manage working environments that are more effective – i.e. fulfilling their purpose and not just operating at low costs – then effectiveness needs to be measured.
That can only happen with benchmarking. Luckily, that work has already begun, because benchmarking is all around us. The Leesman Index is arguably the largest contemporary collection of workplace effectiveness data in Europe. It allows organisations to benchmark themselves against the performance of others. But it also provides deep analysis of the performance of their workplace environments for their employees. It has the potential to change the way workplace is measured. But it will only be able to do so if senior industry figures make management decisions based on the data.
You can’t manage what you don’t measure. It is an old management adage that is accurate today. Unless you measure something you don’t know if it is getting better or worse. You can’t manage for improvement if you don’t measure to see what is getting better and what isn’t.
Because it is not benchmarking itself that is the answer; it is what you do with the data that counts.
Extract FMJ August 2012