- Let's look at the three different types of benchmarking. Benchmarking is used by lots of companies to compare their own performance against reference points where you basically compare what you do to others in order to gain new insights and improve your own processes. We're looking at three different types of benchmarking.

The first one is when we benchmark where you do process benchmarking. So you compare your own business processes. And you try to compare them either internally, so, for example, you might have lots of different call centers. And you say, how do we handle calls? How do we handle calls? And you look at the processes and what they do and how to improve it.

Others go beyond their own organization, look at external benchmarking or trying to even define global best practices. So one of my insurance clients, for example, wanted to look at their claims handling processes so how calls come in, how do they get processed. And actually, they then thought Domino's Pizza is doing this pretty well.

They're getting calls in there, then process this. They then deliver a pizza. What can they learn from this? So you then send a delegation out to say, what does Domino's Pizza do well? How do they run their processes? What can we learn from this? And what can we then bring into our own organization to make our processes better?

The second type of benchmarking is where you actually benchmark your strategy or your business plan or your business model where you say, how do we operate as an organization, and how can we look at others? And what do they do differently? So, at the moment, I help lots of companies around the their business model optimization. I've just done a video on the nine most successful business models, which you can see on this channel.

And basically, what happens is that organizations say, what are some of the new business models? Let's say a platform businesses like Amazon or Uber or Airbnb . What do they do differently to more traditional businesses, and what can we learn from this? How can we transition to this new business model? What can we learn from this? So you, basically, have this comparison in a more strategic macro level.

The third type of benchmarking is where you compare yourself, where you do performance benchmarking. So you look at your outcomes and your results as an organization, and you compare this with others. And again, you can do this internally. So you can compare the profitability between different divisions of your organization, for example, but you can also do this across organizations. So, for example, if you're an oil company and you've just released your results on profitability and revenue growth, you would then compare this with other oil companies to put this into perspective.

So performance benchmarking helps you to understand how you're doing in comparison to your competition, for example. Lots of telecom companies now look at their net promoter score so how well they're scoring on customer satisfaction and loyalty. And they compare this across the industry to see how well they're doing. Cities are now using this to look at lifestyle indicators and health indicators. And they compare different cities to determine the quality of life that they offer and the services they are offering.

But you can also use those benchmarks then to define better performance targets for your own organization. So if you're this oil company, your results were not as good as another oil company. You can then say maybe, next time, we need to up our targets. So this is hopefully giving you a good understanding of the three types of benchmarking, which are process benchmarking, strategy benchmarking, and performance benchmarking.