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things are done best in order to adapt these methods for their own use. This technique
is best summed up by the Hindu proverb: “ know the best to become the best. ” In fact,
benchmarking, which is the term preferred by KM, is really a form of competitive
intelligence, the term favored by information professionals.
Benchmarking as a tactical planning tool originated with Xerox Business Systems
in the late 1970s. Japanese affi liates were selling better quality copiers for less than
the manufacturing costs of similar products in the US. Xerox wanted to know why
this was so, and whether or not they could emulate the Japanese companies. Similarly,
one of the fi rst experiments in benchmarking was in the production logistics area
(warehousing, picking, packing, and shipping) when Xerox Business Services bench-
marked with L. L. Bean, a clothing manufacturer who had one of the best logistics
operations in the world.
Benchmarking is a fairly straightforward KM metric that often represents a good
starting point. There are two general types of benchmarking: internal benchmarking,
which involves comparisons against other units within the same organization or a
comparison of a single unit over different time periods, and external benchmarking,
which involves a comparison with other companies.

Box 10.3
A vignette: Benchmarking from within

In one engineering organization, the senior management team wanted to implement an
after action review (AAR) for completed projects. They were unsure of where and how to
begin — with projects in progress? How far back to go when the employees concerned may
no longer be with the company? What should they document? They had a whole series
of questions and not a lot of models to work from. They decided to do some benchmark-
ing — both external, with organizations of similar size and mandates as theirs, and inter-
nally, as they had subsidiaries around the world. The internal benchmarking results proved
the most valuable — one of the subsidiaries, in the Netherlands, had been doing AARs for
three years. They had templates and a good process for conducting the AAR meetings with
a facilitator. They even had a rule of thumb: an AAR had to be conducted no later than
three months after project completion and once ten projects were completed, they were
compared to identify any commonalities. Once thirty projects were completed, the AARs
were sent to the KM team to be further analyzed in order to extract lessons learned that
could have organization-wide interest. The senior managers were quite impressed that
their learning curve had all but disappeared. They adapted the existing questionnaire and
meeting process and requested a teleconference with their colleagues overseas. In this way,
an internal benchmark revealed existing best practices within the same organization that
could be easily transferred and reused by others.