Tag Archive for 'Performance'

On Benchmarking

I passed my higher secondary examination in 1958 coming first in my school and also in the Education District where my school was located . My happiness and sense of achievement knew no bounds and my parents were justifiably proud of me.  During those days , my maternal grand father , a retired police officer , was convalescing  in the medical college hospital at Trivandrum , capital city of Kerala . We went to look him up in the ward and my mother proudly informed her father about my achievement  . He looked straight at me with piercing eyes and commented  ” If you had studied better and put in more hard work , you could have come first in the State ” .

All my ego got deflated and I felt very small on hearing my grand father’s comments . I really did not understand him then . Neither have I heard the term ” benchmarking ” at that age .

Looking back at my career spanning more than 45 years of work life , I can now fully understand the deep meaning behind my grand father’s observation . He was very fond of me and sincerely felt that I came short in his  expectations – meaning I was capable of a state first rank but did not work hard enough to get it !!.

The concept of bench marks came originally from a carpenter’s work bench and later used by surveyors as a reference point for measurement . The management experts used this concept to good use in measuring and comparing performance and achievement  against established standards .

Benchmarking is a very useful tool to measure the gaps between potential and actual performance and it can be gainfully used to give effective feed back with a view to improve future performance or goal setting exercises . Jack Welch of GE used it to decide on divesting businesses which were not number one or two in their segments . Governments and Corporate Leaders as well as NGO’s use this technique to excel in whatever the endeavor they are .

Do we have the right metrics in place ?

Sometime during the late eighties , I was admitted in an Army  Hospital in Central India  for treatment of multiple fracture suffered during a vehicle accident. I happened to over hear a conversation between the Registrar of the hospital and the Superintendent who was giving the daily report to the Registrar. When the Superintendent told the Registrar that the bed occupancy was only  60 percent due to large number of discharges of patients during the last seven days, the Registrar was visibly annoyed. His response was on the following lines-

“My dear S uperintendent,you will get this hospital closed very soon. Don’t you know that The Army Standing Committee is visiting next week to review our establishment and they will reduce the staff drastically in the new authorisation if they notice the low bed occupancy. From today onwards, no patient will be discharged  without my  personal clearance.OK.”

Now, what should be a good metric for a hospital’s performance ? The bed occupancy or quality of treatment? or recovery rate of seriously ill patients?. When you look at the commercial objective , bed occupancy generates more revenue like a hotel . But is that what hospitals are meant  for? . A super market may look at the footfalls per day to measure the popularity and acceptance in a locality but individual shops will have to consider sales value per visitor to arrive at its profitability. Similarly, a service provider of  cell phones can boast of  a large market share but if the revenue per call is lower than a competitor ,the market share alone will not keep them there long.

In short,metrics should facilitate business goals both in the short term and over a longer time horizon and more important, it should also align with the laid down mission of an enterprise . All other measurements are waste of time.