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4 Reasons to Benchmark Against the Private Sector

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I’ve always found it a bit disheartening how far-removed some government departments seem to be from any semblance of performance-based accountability. I ask, “would these folks survive a day out in the real world if there was an ounce of competition?” Considering that I work for the government as well, I have to assume that others have evaluated my team or my performance in a similar way….

From time to time, there’s a new buzz-phrase or management model that examines how government can learn from the corporate world, but the results rarely last.  At least in my small world, the silos, bureaucracy, and inefficiencies persist.

Yet, I do think there’s a lot of value in benchmarking against the industry. Here are a few reasons why.

Benchmarking:

1. Spurs competition.  A challenge, whether from an internal or external source, can help motivate teams and improve efficiency.

2. Forces us to consider metrics.  Many of the teams I’ve worked with have no meaningful method to evaluate success.  In the corporate world, support elements like human resources and training departments are perceived as cost (as opposed to profit) centers.  Having to justify budget and staffing on the basis of return on investment forces these business units to find ways to measure performance–for better or worse–to help leaders make tough decisions.  Even if we have different expectations and processes for evaluating performance in the government, we can still use heuristics from the corporate sector as a guideline for performance improvement.

3. Prompts us to consider broader horizons.  When we look outside our teams, departments, organizations, or even the government sector, we’re presented with different ways of doing business. Even if the private sector has unique structures and wildly divergent missions, there’s still often a lot we can learn about creative methods for collaborating and overcoming challenges.

4. Helps us communicate. To borrow language from a much better written post by a former featured blogged, @BarryCondrey, benchmarks help “tell your story” in a credible and relatable manner.

On my team, we’re tapped into inter-departmental collaboration efforts, but we’re also  turning to the private sector for guidance on the way ahead.  We’re using industry reports to help inform our strategic posturing.  We’re reviewing evaluation research to find new ways of measuring our eLearning solutions.  And we’re connecting with other professionals in our fields via professional development opportunities.

Have you had any success benchmarking outside your organization or translating lessons learned into measurable success?

Dave Barton is part of the GovLoop Featured Blogger program, where we feature blog posts by government voices from all across the country (and world!). To see more Featured Blogger posts, click here.

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Mark Hammer

If I could count on the folks doing the benchmark comparisons to be able to tell when the comparison was valid and not, that would be one thing, but I tend to hear comparisons (and admittedly, these are only HR-related ones, so others may have a better hit rate) that lead to a lot of face-palming.

Example 1: Pay-for-performance. Typically, in the private sector, higher performance results in greater revenue or reduced costs, offsetting the cost of that increased pay. In the public sector, higher performance either has no bearing on revenues or expenditures, or can even increase costs (catch more criminals, or find more neglected/abused children, and it costs the system more).

Example 2: Dismissal rates: I recently heard a senior official kvetching about how dismissal rates in the public sector were way too low, compared to the private sector; hence we must be somehow protecting or otherwise hanging onto “dead wood”. Of course, when an employer has the latitude to employ-at-will, as the private sector does, then they have the luxury of deploying fast-n-loose hiring methods, simply because they can fix their hiring mistakes by firing people. In the public sector, because we don’t anticipate firing many (especially because some jobs require a lengthy training period), we make it harder and slower to get in. Different systems and approaches to hiring, hence no point in comparing dismissal rates.

I could go on, but you get the point. Again, I repeat the caveat that there may well be domains where comparisons are entirely reasonable to make. But the comparer has to know enough about each system/sector, and the context they operate in, to know when the comparison is a valid one .

Profile Photo Dave Barton

Thanks, Mark. Good examples of why the context of comparisons is so important. In a similar vein, I’m always impressed by organizations or individuals that take “best practices” so literally that valid lessons learned from one performance environment are expected to seamlessly apply in a completely different environment.

Mark Hammer

Absolutely, Dave. One always has to lead with the question: “Is there something about the circumstances that is either favorable or inhospitable to applying what goes on *there* to what goes on *here*?”. Sometimes it CAN work, and there is a rational and empirical basis to making comparisons. But a lot of times it’s apples and oranges.

Know your fruit! 🙂