Hagan School of Business

The Benchmarking Code of Conduct

(from the Benchmarking Management Guide, published by the American Productivity and Quality Center, (APQC, 1993, p. 229)

Preamble

Benchmarking -- the process of identifying and learning from best practices anywhere in the world -- is a powerful tool in the quest for continuous improvement.

To guide benchmarking encounters and to advance the professionalism and effectiveness of benchmarking, the International Benchmarking Clearinghouse, a service of the American Productivity & Quality Center, and the Strategic Planning Institute Council on Benchmarking have adopted this common Code of Conduct. We encourage all organizations to abide by this Code of Conduct. Adherence to these principles will contribute to efficient, effective, and ethical benchmarking. This edition of the Code of Conduct has been expanded to provide greater guidance on the protocol of benchmarking for beginners.

The Benchmarking Code of Conduct

Individuals agree for themselves and their company to abide by the following principles for benchmarking with other organizations.

1. Principle of Legality

• If there is any potential question on the legality of an activity, don’t do it.
• Avoid discussions or actions that could lead to or imply an interest in restraint of trade, market, and/or customer allocation schemes, price fixing, dealing arrangements, bid rigging, or bribery. Don’t discuss costs with competitors if costs are an element of pricing.
• Refrain from the acquisition of trade secrets from any means that could be interpreted as improper, including the breach or inducement of a breach of duty to maintain secrecy. Do not disclose or use any trade secret that may have been obtained through improper means or that was disclosed by another in violation of a duty to maintain its secrecy or limit its use.
• Do not, as a consultant or a client, extend one benchmarking study’s findings to another company without first obtaining permission from the parties of the study.

• Be willing to provide the same type and level of information that you request from your benchmarking partner to your benchmarking partner.
• Communicate fully and early in the relationship to clarify expectations, avoid misunderstandings, and establish mutual interest in the benchmarking exchange.
• Be honest and complete.

• Treat benchmarking interchange as confidential to the individuals and companies involved. Information must not be communicated outside the partnering organizations without the prior consent of the benchmarking partner who shared the information.
• An organization’s participation in a study is confidential and should not be communicated externally without its prior participation.

• Use information obtained through benchmarking only for purposes of formulating improvement of operations or processes within the companies participating in the benchmarking study.
• The use or communication of a benchmarking partner’s name with the data obtained or practices observed requires the prior permission of that partner.
• Do not use benchmarking as a means to market or sell.

• Initiate benchmarking contacts, whenever possible, through a benchmarking contact designated by the partner organization.
• Respect the organizational culture of partner organizations and work within mutually agreed upon procedures.
• Obtain mutual agreement with the designated benchmarking contact on any hand-off of communication or responsibility to the other parties.

• Obtain an individual’s permission before providing his or her name in response to a contact request.
• Avoid communicating a contact’s name in an open forum without the contact’s permission.

• Demonstrate commitment to the efficiency and effectiveness of benchmarking by completing preparatory work prior to making an initial benchmarking contact and following a benchmarking process.
• Make the most of your benchmarking partners’ time by being fully prepared for each exchange.
• Help you benchmarking partners prepare by providing them with an interview guide or questionnaire and agenda prior to benchmarking visits.

• Follow through with each commitment made to your benchmarking partners in a timely manner.
• Complete each benchmarking study to the satisfaction of all benchmarking partners as mutually agreed.

• Understanding how your benchmarking partners would like to be treated.
• Treat your benchmarking partners in the way that each benchmarking partner would like to be treated.