Want a stronger, faster business? Start Benchmarking.

Southwest Airlines had a problem. In the 1990s, they were already the fastest airline, in terms of refueling. But they wanted to be faster. Faster refueling means less time on the ground; less time on the ground means better margins. In other words, of course they wanted to be faster.

So, what did Southwest do? Invent a new technology? Hire faster employees? No. Instead, they used a business tactic that has been around as long as business itself, a tactic that is coming back into fashion:

Benchmarking.

Benchmarking is the practice of comparing one of your company’s systems to a similar system within or outside of your organization. The goal is to identify best practices and apply those practices to your own business.

(Note: We say “system,” but really you can benchmark anything: a product, a service, a methodology, etc.)

There are three different kinds of benchmarking: 

#1. Internal Benchmarking – comparing two of your company’s systems to each other.

#2. Competitive Benchmarking – comparing one of your systems to a competitor’s system.

#3. Functional Benchmarking – comparing your system (or simply an aspect of it) to a similar system outside of your industry.

Since they were already the fastest refuelers in the market, comparing Southwest Airlines to their competitors would not have been helpful. So, they turned to Functional Benchmarking.

To improve their own refueling process, Southwest Airlines looked to an industry very different from their own, an industry where speed is everything and refueling happens in a matter of seconds:

Formula One racing.

In F1 racing, drivers travel at speeds of 200mph. Refuelers are expected to keep up. (At least, they were, until the league ended refueling in 2009.) By auditing F1 pit crews and analyzing their systems, Southwest Airlines identified the best practices of the world’s fastest refuelers. Then, they applied those practices to their own refueling process.

The result? Faster refueling, less time on the runway, and a better bottom line.

That is the power of benchmarking.

So, how can your business tap into it?

Start by partnering with a business advisor you trust.

For benchmarking to be effective, work with a trusted 3rd-party who understands your challenges and knows the ins and outs of your industry. Look for creativity, personability, and most importantly, deep expertise.

Partner with an advisor who has a broad range of business advisory skills and extensive experience in your industry. To find creative solutions, they must understand your business.

They will work with you to identify your areas of improvement.

Your business advisor will work with various members of your organization to determine the systems, services, products or methodologies that need attention. They will help you focus on the areas that directly influence your bottom line. (In the case of Southwest, the refueling process was identified as a critical area.)

Your advisor will perform a comparative analysis.

At this point, your advisor will compare your system to similar systems within your organization and your competitors, identifying best practices along the way.

Or, if your situation is similar to Southwest Airlines’ predicament, a truly creative advisor will turn to examples outside of your industry.

They will bring the results to you.

An effective advisor not only gathers information. They perform in-depth analysis, extract actionable insights, and communicate their findings in a way that helps you improve your business.

Your advisor will help you apply the insights to your business strategy.

They will work closely with you and various stakeholders to apply the best practices to your organization. As your business grows and new challenges emerge, they will perform regular benchmarks – always measuring, always evolving. This gives you an edge over competitors and empowers you to continually fine-tune your operations.

…And that is just the beginning.

At Klein Hall, we know that today’s world is rapidly changing. We are here to help your organization get ahead through a wide range of business advisory services. Benchmarking is just the beginning.

Click here to learn more about our comprehensive business advisory services.