Benchmarking Social Goods

Public goods providers are often monopolies. Thus, they don’t face direct competition. Citizens can’t choose from multiple local vendors for driver’s licenses or building permits. But, citizens can compare the service they receive with their social goods with the service that they get from private sector providers. Citizens often find that social goods providers lag the private market. The answer isn’t to let the private sector take over social goods. That’s not what they’re good at. The answer lies in benchmarking social goods against each other and the private sector to identify where they can improve.

What is Benchmarking?

Surveyors need a reference point in measuring altitudes for calculating slopes. They will put a permanent cut or mark in an immovable wall, pillar, or building to use as a reference for current and future measurements. That cut or mark is called a bench mark.

The business world has adopted the term benchmarking to refer to conducting a comparative study in order to gauge and improve your own performance. Comparisons are made against industry averages or best practices as well as specific competing organizations.

Typical measurements might include the cost, time, or quality involved in delivering a good or service.

Organizations can benchmark the products they offer their customers and clients, and they can benchmark their internal operations.

The Benefits of Benchmarking Social Goods

Benchmarking generates descriptive statistics. In other words, it describes what is currently happening. Benchmarking doesn’t provide diagnosis, prediction, or prescription. The process doesn’t tell you why something is happening, what will happen next, or what you should do in the future.

But even descriptive statistics are enormously helpful.

Here’s a personal example from my experience. When I ran a weekly newspaper, our industry association offered a benchmarking service. Member papers like ours who wanted to participate filled out a spreadsheet detailing their operations. In return, we received all the statistics about operations at other similar papers. This way, we could see how we compared to other, similar organizations. What did they spend on rent, printing, distribution, salaries, benefits?

The benchmarking service alone was well worth more than I paid in association dues each year. I could see where I was excelling. For example, we paid very low printing costs and rent per square foot. I could see where we were wasting money–our distribution was not as efficient as other papers. I could tell my writers that I was already paying salaries that were better than the national average, even though we were a start-up paper in a relatively small market.

How to Benchmark Social Goods?

If you’re a public or social sector marketer or even a private citizen, you can do your own benchmarking of social goods. The practice is very illuminating. It’s also time-consuming, maybe not your core competency, and something you won’t get paid for, at least directly. Luckily, governments create a lot of data–the term “statistics” is related to the word “state.” Governments are also the provider of many social goods, so data should be easy to find.

Also, many nonprofit groups receive funding specifically to research social goods. They can be a good source of benchmark data, as well.

Benchmarking assumes that comparable, objective metrics exist for social goods. That’s usually a good assumption. A benchmark also must contain meaningful measures. Your clients, funders, stakeholders, or employees need to care about what is being measured.

You can think of a benchmark as being like a scorecard or a report card. What criteria will go into your scores or grades, and why? How will you gather data that support those criteria?

Once you’ve generated your benchmark study, you can decide whether you want to be meet, beat, or lag the benchmark. For many things you measure, it might be perfectly fine that you’re average. Spending money and effort to be better-than-average might not give you any returns. That realization frees you to focus on making improvements where they’ll actually matter.

Examples of Benchmarking in the Public and Social Sector

This recently-published atlas provides a great benchmark of public transit systems in the US. Ever wondered how your region compared to others for public transit service? Now you can see a ranking of 47 major metropolitan areas. This is a good example of benchmarking a product offering.

Organizations can also benchmark their internal operations. The city of San Francisco regularly benchmarks the energy consumption of public facilities. Measuring energy helps them find and then eliminate inefficiencies, saving the taxpayers money. Reducing energy waste also helps reduce the city’s carbon footprint and improve compliance with environmental regulations.

We Can Do Better and Benchmarking Can Help

I’m writing this post partly out of frustration. Many examples of clearly superior social goods exist and yet those goods are not adopted elsewhere. If one city or county or state or even nation is getting consistently superior results in delivering social goods, why aren’t other systems adopting their practices? The monoply system that developed a superior approach isn’t going to lose customers because someone else adopts their methods. I think a lot of it comes down to the attitude of “Not Invented Here.”

Here in the US, we like to refer to the “great experiment in democracy.” We refer to the 50 states as “laboratories of democracy.” That’s a great sentiment, but it’s a waste if we don’t evaluate our experiments and apply the results. Benchmarking provides the method for evaluating the results, identifying superior outcomes, and scaling those for the betterment of all.

(Image courtesy of Flickr)

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