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April 23, 2018

Say Goodbye to Benchmarking

Summary:

By the time the changes are implemented, the industry leaders have moved on to more innovative products and solutions.

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I cringe every time a company wants to do a benchmarking study. Wikipedia defines benchmarking as “comparing one’s business processes and performance metrics with industry bests and best practices from other companies.” From the requester’s perspective, it is the prudent thing to do. So what’s the problem? The problem is the company’s mindset.

Typically, the company already knows it is falling behind the industry and wants to pinpoint exactly how badly it lags. The company subsequently sets its sights on “catching up” with industry leaders, which will actually only make the company average. The leaders have in effect set a new standard for what their mutual clients expect. Is it really worth investing the time and expense to perform a benchmarking study, digest the results, prioritize, fund and develop new components just so you can become average?

By the time the changes are implemented, the industry leaders have moved on to more innovative products and solutions, forcing you to reevaluate and repeat everything you’ve just completed in an attempt to become par…again. Is that what your customers and investors expect from you? Is that really the best you can do?

You’ll seldom find an industry leader doing benchmarking studies. Rather than focus on the competition, vanguards focus on assessing the needs of the customer. What are the current pain points? What needs are being unmet? How many unnecessary steps or how much excess time does it take for a customer to use your product or service or interact with you? Wouldn’t it be cool if we could only offer/eliminate/change _________ (fill in the blank)? Leaders force their teams to think creatively about solving problems, which in turn often makes their company unique and makes their customers loyal.

See also: Insurance 2025: Smart Contracts  

Talk to the folks on the front line to gather feedback on what is and isn’t working, and ask what they are hearing from customers. What kind of feedback are you getting through social media or customer surveys?

Listening to clients is an acquired skill and often is not fully appreciated for the value it holds. I’ve seen a company implement the wrong strategy after misinterpreting the multiple choice survey responses and failing to study and digest the free form comments. Surveys can become a landmine of misdirection if not done right. How many times have you completed a survey that asked about how well the customer service agent handled your problem, when the real problems had nothing to do with the agent and everything to do with the flawed processes created by the company? Make sure your surveys provide customers with open-ended questions that give them the opportunity to tell you what you can do better. Their comments will only add value if you actually take the time to thoughtfully harvest and analyze them. Ignoring the answers to a free form question is a huge lost opportunity.

Having spent many years successfully leading innovation, I can honestly say that I never looked at what the competition was doing. I didn’t care. In fact, I often felt that, if I studied my competitors, it would taint my view and subconsciously lead me down their imperfect path as opposed to forging my own targeted solutions. It was more important to study our internal processes and any workarounds we had implemented, which is an easy way to flush out underlying problems that affect both the customer and company. Innovation, after all, is really about solving problems in a creative way.

See also: The State of Workers’ Compensation  

Sometimes, what’s going on outside your industry could be more important than what is happening within your industry. Disruptive companies typically come from outside and are not shackled by tradition or legacy technology or benchmarking results. They’ve asked the right questions – what would make things better or easier for the customer – and listened carefully to the responses. That’s where you’ll find valuable answers that will lead you to a new strategy – one where you’ll do more than just keep up with the industry leaders. It’s time to forgo benchmarking as a tool of the past, one that supported businesses that moved en masse at yesterday’s slower pace. Instead, rely on your own customers and internal resources to show you the way forward.

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About the Author

Valerie Raburn is a P&C thought leader who has led insurance innovation at Xerox as the chief innovation officer for financial services, assisted clients as a principal consultant with CSC Consulting and spent 20 years re-engineering claim processes for the nation’s largest publicly held personal lines insurer.

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