How to Use Benchmarks Effectively

This is the second part in a series of Q&A interviews on the topic of benchmarking. The first part of the series focused on why L&D organizations should use benchmarks and how Explorance’s customers use benchmarks to contextualize their effectiveness in learning program delivery. It also covered the impact and the adoption of the capabilities needed to establish and maintain a sustainable metrics-driven culture within the L&D department. This post will focus on the benefits, challenges, and best practices for using benchmarks within L&D.

What are some of the benefits of benchmarking? What are some of the challenges?

Benefits:

When used appropriately, benchmarks provide a frame of reference to compare your L&D organization’s effectiveness to a benchmark group so you can:

• Learn where you stand relative to peers
• Prioritize where to focus improvement efforts
• Establish data-informed performance goals

Many of our customers use benchmarks to enhance their credibility because using a broadly accepted methodology like Explorance offers with Metrics That Matter is generally easier for executives to accept. Plus, the option to use a benchmark for comparison further validates that your L&D department is using industry-accepted methods and striving for excellence.

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Challenges:

A primary challenge of benchmarking is getting access to a representative data set that is comparable enough to tell you something while being broad enough that the contributors to the benchmark are comfortable sharing their data. It’s important to start with a set of standard definitions and methods for gathering the data, and standard definitions for segmenting the benchmark, so it’s possible to benchmark by industry, region, training topic, etc.; This allows for more meaningful comparisons. On the flip side, sometimes you need to acknowledge that you’re using the best data you have and don’t let the perfect be the enemy of the good.

At Explorance, we have strict standards for our peer and custom benchmarks to ensure that there is a representative data set that is not skewed toward a single contributor. We do not reveal the specific company names of our benchmark contributors, although our customers talk to each other through our user community, so they are aware of the types of companies that are in our benchmark data set.

What should be considered when deciding which benchmarks to use?

Ultimately it depends on where you are in the measurement journey, but four considerations come to mind:

• Quality and relevance of the data set: How many data points, from how many organizations? If it’s not clear how many organizations are contributing, use your judgment, and be prepared to caveat if other stakeholders ask.
• Whether an internal or external benchmark is best for the situation: External benchmarks can provide valuable context, while internal benchmarks, especially in large organizations, can offer valuable insights to recognition or improvement.
• Consistency of the data collection approach and methodology: This is where standards become invaluable. Whenever possible, seek out standard measures with standard definitions – ideally, these should be auditable.
• Select a benchmark that will help you grow. Resist the temptation to choose a benchmark just to make yourself look good. I’m sure no one reading this would consider doing this, but I have seen it happen, so it’s worth a mention.

What steps can organizations take to improve the effectiveness of their benchmarking processes and outcomes?

First, have a clear objective. Why do you want to benchmark? To learn, to prioritize, or to set goals? Next, identify the standards and like-minded organizations and put the processes and systems in place to reliably gather the data you need to benchmark in a meaningful way. This is one of the reasons why so many customers who use Metrics That Matter leverage the standard SmartSheet evaluations; the KPI definitions and contributing questions are clear and established. Finally, make the benchmarks easily available to relevant stakeholders. If you’re scrambling to gather data from disparate sources to pull together the numbers quarterly or annually, you’re probably missing out on opportunities to make more of the small adjustments along the way that add up to big wins. Embed benchmarks in reports and dashboards to provide a reference point for the day-to-day management and decision support.

Closing

When used appropriately, benchmarks provide a valuable frame of reference. Benchmarks help you learn, prioritize, and set goals, and consistent use of benchmarks from reliable, valid sources provides credibility to your L&D effectiveness story.

To learn more about benchmarking with Metrics That Matter’s validated L&D effectiveness measures, don’t hesitate to contact us.