As we discussed in our previous blog, a fundamental dynamic of business is paying attention to the organization’s financial performance and stability, not just for now but sustainably into the future. A reliable method for doing this is through the development of financial and nonfinancial benchmarks.
Benchmarking measures performance to track current results and improvements made to the business. In addition, trends are created when benchmarks are compared against different time periods. This information is used to develop strategies as well as responding and taking action.
Industry and trade associations provide standards against which benchmarks can be measured. The idea is to track benchmarks in all key areas of the business, to monitor progress and success. This is an excellent way to engage employees in the improvement systems and processes. They get to see objective measurements that clearly show improving performance, which can engage them and lead cultural change.