How to Benchmark, Implement Best Practices in Your Organization
Over the years, I have written numerous articles, as well as taught and attended countless workshops, regarding benchmarking and the identification of best practices when it comes to “people, processes, and technology.” During the workshops and throughout the articles, the focus would be on gleaning ideas for improvements by looking at what other organizations have done to drive innovation and reduce costs when they changed the way they perform certain tasks. (For a refresher on these ideas, see the article “Why Not the Best?” in the November 2018 issue of PAYTECH.)
These “ideas” often form the basis for benchmarks, which set the standard for best practices. Benchmarks can either be identified externally when we compare ourselves against another company, or they can be done internally when we establish a goal or a target based upon a previous year’s performance.
Benchmarking can be formal, such as when you participate in a study with set criteria and agreed-upon definitions; or informal, such as speaking with your fellow professionals at the APA’s Annual Congress or at a chapter meeting. Whichever way you choose to gather your information, you should keep two lists of benchmarks. One list should include the goals you want to achieve in the short term, and the other those that may take more time. Remember that achieving short-term goals is often a great way to keep your team interested and motivated.
Be careful, however, when making a decision on benchmarking for your organization, especially if the best practices are implemented by another company. There is no one-size-fits-all solution when it comes to best practices. There can be a number of factors affecting which practice you wish to implement, among the most important being the culture of an organization. There is a quote which is often attributed to Peter Drucker, a top management consultant: “Culture eats strategy for breakfast.” Simply put, despite the best efforts of people to change the way things are done, if the culture of the organization is opposed to the change, it will either fail or not be implemented to achieve the maximum result. A good example of this would be when you hear of another organization achieving 100% electronic pay distribution. While this is a worthwhile benchmark to achieve, your organization might have many employees who are unbanked and do not want to use a paycard. It might be more realistic to set an internal benchmark more in line with your employee population.
Because there is so much information on best practices and the different trends in the marketplace, there has recently been a shift from discussing what a best practice for a particular function might be to asking questions about how to implement said best practice.
Keeping that in mind, let’s focus our attention on how to actually implement a best practice and review some ways to overcome obstacles that may be in the way of your success.
Find Executive Support
Do not underestimate the need for executive-level support for your effort. This individual can be very helpful in explaining why a function needs to change and driving the needed support. If there is a cost involved in implementing the change, this executive may be able to help secure the necessary financing. Even if additional financing isn’t needed, a well-placed word from an executive can help everyone to see the mission-critical need to move forward with the change. If you are having difficulty finding a willing champion, very often you can use the information you have gathered from benchmarking to sell your idea and show how the change can be profitable—either from the standpoint of dollars and cents or just improved morale.
Just as you should never underestimate the need for the executive support, you should also never underestimate the change effort and the resistance to the plan. I once worked in an organization where there were multiple internal institutions spread across the entire company. Each of these had their own department head who had to be consulted and onboard with the change before it was rolled out. One way to ensure a change would fail was to have this leader find out about it from one of their own people rather than from the person leading the change. Understandably, they never wanted to be in a position where, if asked, they would have to say they did not know anything about it. Each person was an important stakeholder. This called for meetings with department heads to take them through the need for the change and, most importantly, explain how it would benefit their department.
Perhaps you have heard the term WIIFM (What’s in it for me?). People are not as resistant to change as you may think. After all, there is very little in business that hasn’t changed over the years. This has caused everyone to adapt in order to be successful. However, you don’t want to bring people onboard kicking and screaming. It is important for you to understand how this will benefit them and their department and then clearly convey that message. Whenever possible, get them to participate in the implementation. See how you can accommodate their needs and have them perform some of the testing, so they are slowly brought into the change. This way they feel that they now own it because they are part of the group that made it happen. If you can demonstrate that their lives will be easier because of the change, then that is half the battle. Here is also where a little internal benchmarking can come into play. You can demonstrate how a competing department is doing better with the change acceptance and use that as the standard or benchmark to get others to “buy in.”
Fix the Process First
Too many people are under the misconception that technology can cure all the ills in their department. Certainly, you will need the technology to drive results; however, automating a bad process will just make the bad things happen faster. Before relying on the technology, take a hard look at the process itself and eliminate unnecessary steps and fix the flaws. Process reengineering is considered one of the keys to success. Even if there is not a technological aspect to the change you are implementing, keep in mind the effect it could have on your team. If the process is broken, they might become frustrated and see the change to the best practice as a failure rather than placing the blame on the process itself. A quote by statistician and educator W. Edwards Deming sums this up: “When a bad process meets a good person, the bad process always wins.”
Along those same lines, once the change has taken place, it may now mean that the individual who had been performing the work no longer has the skill sets or competencies to continue in that role. After all, the job may now be considerably different. This may be a good time to consider restructuring and redesigning positions to see if there may be a more suitable match elsewhere on your team. Use the data you gathered from your research to see the number of people in other organizations who have completed the certification process. Perhaps that is a good internal benchmark to set, as in having “X” percent of your team with either a Fundamental Payroll Certification (FPC) or a Certified Payroll Professional (CPP) designation.
Consider Additional Resources
If the best practice that is being implemented is a major project, consider trying to supplement the staff with some additional resources, especially consultants with a background in that area. Someone from the outside may come in with a more holistic view of the process or introduce different ideas that you may not have considered. They have probably done some significant benchmarking themselves and can help you to see which might be best for the short term as well as for the future. If a consultant is not an option and you are staffing your project with team members, perhaps you can hire a temp employee to take on some of the more everyday tasks, so the people on the project can focus on the change. If you do, remember to build the cost of the temp into your budget. If you can’t bring on any additional resources, keep in mind that someone on the team is now doing double duty as they continue in their current role while also taking on the project. That person may need some additional down time.
One important role to consider when starting this process is a project manager. This is an individual who can work with the team to identify the critical steps, dependencies, and timeline needed to see a successful implementation through to its conclusion. This person will need to be firm and resolute when speaking with the team and keep them on track. They should also be willing to raise any potential impediments to the change being completed on time. A detailed project plan with reporting at regular intervals should be part of their toolkit.
It Takes Time
As you can see, there is much more to implementing a best practice than simply comparing yourself to others and identifying what it is you would like to change. There are numerous things to consider. You need to ensure that the benchmarking you have done is comparing apples with apples. Sometimes being in the same line of business is helpful (especially when it comes to unique time schedules as you might see in health care or public service). I have generally found that the line of the business doesn’t matter as much as the size of the organization or the functional requirements. Achieving the change you seek requires careful planning, communications, detailed testing, support from leadership, possible restructuring, and change management. Give these steps the attention they deserve and you will be on your way to a successful implementation. Who knows? Someone may then benchmark against you.
Dennis G. Danilewicz, CPP, is a retired payroll professional. He is a former APA President, received the APA’s Meritorious Service Award, a Special Recognition Award, and was named Payroll Man of the Year in 2000. Danilewicz also received two APA Payroll Prism Awards for Best Practices (both for Management, in 2007 and 2008) on behalf of his departments and is a member of the Board of Contributing Writers for PAYTECH.