Benchmarking in Corporate America: Uses and Abuses
by Jerry Stone

It was just last week a healthcare professional of a large prestigious healthcare organization was exploring support-staff productivity benchmarks with us in an effort to identify potential areas for improvement opportunity, as well as, areas of excellence. Having worked with this particular administrator and organization for some time, it was reassuring to know they were going about the exercise of benchmarking in a proactive, effective, and overall beneficial manner. This particular organization is using benchmarking comparisons as a means to point them in the right direction, and not to calculate THE absolute “right number” in terms of support-staff needed at any given location or department.

The conversation reminded me of times in my past when organizations, less diligent than the one mentioned above, seemed to slip from support-staff benchmarking to something more closely resembling support-staff headhunting. As co-founder of MedicalGPS, LLC, a company with its beginnings deeply rooted in healthcare benchmarking, I’m all for appropriately using support-staff productivity benchmarking comparisons as a way to identify potential opportunities for improvement and to share best practices, however, it is distressing whenever support-staff benchmarking comparisons are used to create an environment of high-pressure tactics, designed to coerce front-line supervisors and mangers to “be the best”. Often, little is known about a particular department’s unique operating characteristics beyond the number of support staff FTEs and maybe, the department’s patient volumes, when the decree comes down – “just get to the number”.

Having spent the better part of the past 27 years, creating and deploying benchmarking systems, and/or being on the operators-end of receiving benchmark comparisons, I have seen support-staff benchmarking techniques used appropriately, and I’ve seen benchmarking techniques abused.

So, why do well-intended executives, managers and supervisors resort to relying on just a few productivity indicators in an attempt to manage (reduce) their organization’s overhead? Here is one theory based on personal experience. Many organizations in corporate America plod along pretty content that things are just fine, when, all of sudden, unexpected circumstances arise that place financial pressure on reducing expenses. In most service industries, including healthcare, 40% or more of the organization’s operating expenses are represented by one single line item -- human resources. The rest of the operating expenses are often spread across several line items, making it hard to quickly identify significant dollar opportunities for improvement. As a result, human resources are an “easy target”. The unfortunate irony is, whenever service organizations resort to “quick fixes” of reducing human resources, more times than not, the organization’s ability to provide the very product they’re in business to produce – service! – is substantially limited.

An appropriate use of benchmarking, especially internal benchmarking is conducted on an on-going basis, much like the organization mentioned at the beginning of the article. Continuous internal benchmarking allows operating managers the wherewithal to monitor their organization’s performance near real-time. By creating a culture of excellence, both in terms of high productivity as well as superior customer service, operating managers can be more proactive and less reactive. Proactive operating managers have the luxury of understanding the real opportunities, and the real limitations of their organization, without having to hurriedly react, and, perhaps make a bad decision, under the pressure of a “just-get-to-the-number” exercise.

By monitoring both quantitative measures like support-staff and provider productivity, workflow efficiency, and other quantifiable measures of production, as well as, qualitative measures such as patient feedback, patient wait time, patient cycle times, telephone and message turnaround time, the proactive manager, when equipped with a balanced blend of key performance indicators, will usually exceed the organization’s service level and budgetary expectations.