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ACCA Strategic Professional · Strategic Business Leader · Enabling success: performance excellence

Harcourt Bank benchmarked its loan approval time against the best bank in its sector and found it was 40% slower. It copied the rival's procedures in full, but approval times barely improved and staff morale fell. Which is the most likely underlying weakness in Harcourt's benchmarking?

The likely weakness is that Harcourt copied the leader's procedures without understanding the enablers behind them or adapting them to its own systems, culture and context. Benchmarking should explain why performance differs, then adapt practice, rather than imitate it mechanically.

  1. AIt chose a metric that was too easy to measure
  2. BIt benchmarked outcomes and copied practices without understanding the enablers and its own culture, systems and contextCorrect
  3. CIt used internal rather than competitive data
  4. DIt compared itself with a sector leader rather than an average performer

Explanation

Benchmarking should identify why the leader performs well and adapt practices to the organisation's own context. Copying procedures without understanding enablers such as systems, skills and culture often fails. Choosing a sector leader is normal best-practice benchmarking, so the final option is not a weakness.

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