The process of comparing an organization's performance, processes, or practices against industry leaders or competitors to identify areas for improvement and set performance targets. It involves measuring gaps and adopting superior methods.
From 'benchmark,' originally a surveyor's mark cut in stone to indicate elevation (1842). Business meaning emerged in the 1980s when Xerox pioneered competitive benchmarking, referring to using external standards as reference points for internal improvement.
The biggest mistake in benchmarking is copying what successful companies do without understanding why they do it. Context matters enormously—what works for Google might not work for your 50-person startup. The best benchmarking focuses on principles and outcomes, not just practices.
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