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Strategic Analysis - May 17, 2010

How Social Media is Redefining Benchmarking

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Social media is forcing many leading global companies to re-examine their benchmarking goals, processes and culture. Can benchmark partners be recruited online? What can be benchmarked online, and with whom? How open can the organization afford to be? These answers can be found in the GIA White Paper, “How Social Media is Redefining Benchmarking”.

Aleksi Grym, GIA’s Director of Product Management, tells us a little more about the topic.

What is the impact of social media on benchmarking?

“A lot more information is available on professional and social networks nowadays, which you would never have dreamt of just a few years ago. It has certainly lowered thresholds for companies to conduct benchmarking drastically.

It has in particular, changed the way companies look at cooperative benchmarking, where business executives meet with direct or indirect competitors to exchange information on in-house processes, visit each other’s premises to observe each other’s operations and discuss challenges and best practices.

Today, many cooperative benchmarking exercises are initiated over professional networks such as LinkedIn.

All sorts of companies are experimenting with different benchmarking approaches through social media. We expect benchmarking to look very different even one year from today - you could say that this is the first ‘big leap forward’ for benchmarking practices in two decades!”

What is the case example in the white paper?

“Companies like Nokia are constantly looking out for ways to do things faster or better - and always at a higher quality. Social media can be an excellent platform for benchmarking, and at a relatively low cost.

Minna Takala, Senior Manager, Innovation and Benchmarking at Nokia, will present some examples from her experience.”

Can you tell us some of the longer term implications?

“Benchmarking used to be about hard data such as manufacturing output, profit per square foot, number of employees per sales dollar generated, for example. These were useful as performance metrics for balance score-cards.

The current school of thought is much more qualitative. Companies want to benchmark themselves against best practices from within, and outside of, their industries. It is less engineering oriented and now more people oriented.

Along the way, companies also realized that they should not only investigate how good the best-in-class companies are, but also how they got there. Identifying ‘enablers’ takes much more time and analysis, but is an important part of benchmarking. Doing so can help companies address the challenge of implementation at their own companies later on. Social media allows for greater access to information on enablers than ever before.”

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