A new benchmarking tool has been created for improving the efficiency of companies and public organisations. Organisations can use this tool for measuring their ability to produce innovation. The benchmark was developed by the Marketing Director of Finnish Road Enterprise, Jukka Yliherva, in his new dissertation research conducted for the University of Oulu.
According to Yliherva, the lack of proper benchmarks hinders organisations' efforts in developing meaningful innovation. Innovation, i.e. new solutions that bring economic benefits with them, play a key role in enhancing productivity. The need to improve productivity is caused by population ageing, outsourcing of jobs to countries such as China and India, and international tax competition.
"The best opportunities for improving productivity exist when the organisation has both the ability to renew itself and the ability to innovate," Yliherva stated in a press conference in Helsinki.
Yliherva's benchmark takes a three-stage approach that includes evaluating the strengths and weaknesses of both the organisation's internal staff and external partners. The benchmark produces numerical data that the company's or public organisation's management can use for developing innovation skills.
So far, more than one hundred organisations have benchmarked their renewal and innovation skills and received analyses and recommendations for improving their productivity. The benchmark is available on the Internet at www.innovaatiomittaus.fi.
Case Study: Finnish Road Enterprise
In his study, Yliherva used Finnish Road Enterprise as his example organisation. During the benchmark, subcontractors evaluated that the greatest strength of Finnish Road Enterprise was the professional expertise within the organisation and the greatest weakness was its shortsightedness.
Finnish Road Enterprise has started developing its procedures to increase effectiveness. According to Yliherva, the benchmarks have been received well among subcontractors, as well, and have attracted plenty of interest.
The benchmarking may also play a larger role in the economy, as the Council of State has underlined the importance of improving the public sector's productivity. Yliherva believes the first stage should be a study on what differences in efficiency truly exist in the public sector so that any decisions made regarding improving efficiency will be more than just empty words.
The value of public sourcing is approximately EUR 11 billion per year, which equals one third of the expenses of the public sector. It is estimated that improving sourcing efficiency will allow savings of up to 25 percent. According to Yliherva, his tool can also be used in the Council of State's productivity improvement program.
Partnership as a way to improve productivity
Yliherva emphasises the fact that cooperation between organisations has become an ever more important way of improving productivity. In addition to internal structure and human resources, each organisation has external connections that all need to work to support innovation skills.
Various views have to be presented within the organisation, goals must be set, innovation must be rewarded and organisational values must support innovation in order to improve the innovation skills of the organisation. It is also important that organisations are aware of how they rank in relation to other similar organisations.