This is one of the first questions that executives always ask me. Because it is a broad question, the answer is often challenging. I usually respond with a few examples that have been gathered in Juran Institute’s 20-year benchmarking practice database, such as Company A is this, and Company B is that. The executives then respond, “We are better than that company. Why are they the benchmark and not us?” Or, “Look what happened to them last year; their business tanked. Ours did not.” My response then is, “You have not tanked yet, but you will because you are not doing what the best do, and your customers do not look at you as the best.”

The benchmarks, or world class, or those that provide superior quality, are those companies, large or small, whose customers cite them as the best. Why? Because their business results are sustainable over time, and they continue to drive to new and better performance levels to stay ahead of the competition.

Why benchmark at all? After all, it is an old tool first made popular by Xerox during the 1980s. Our experience has convinced us that an organization benchmarks its competitors, or the best outside an industry, for three reasons:

1.

 …