competitive benchmarking. Under this system, each functional area was responsible for closing the gap with the best world-class performer that could be found in that particular function, and success in each function would make Xerox as a whole the best of the best. Competitive benchmarking would shake up every Xerox function and activity, serving as a point of convergence between marketing and operations. Benchmarking is a tool used by many companies today as they compare the costs of performing a given activity against the costs of competitors or against the costs of a noncompetitor in another industry that efficiently and effectively performs much the same activity or business process. This approach thus involves cross-company comparisons of how the basic functions and processes in the value chain are performed, meaning how materials are purchased, how vendors are paid, how inventories are handled, how employees are trained, how payrolls are processed, how fast the company gets new products to market, and so on. The objective of benchmarking is to understand the best practices for performing a given activity, to learn how lower costs are achieved, and to do what is needed to improve the cost competitiveness of the company whenever benchmarking reveals that the costs of performing an activity are out of line with what other companies have been able to do. The main Japanese rival for Xerox at the time was Canon, and benchmarking was used to compare Xerox to its rival from one end of the value chain to the other. Management had believed it had an operation problem, but it was found that it also had a service problem as well.
Another approach used early to respond to the competitive crisis was a joint union/management initiative called Quality of Work Life, an employee involvement strategy designed in imitation of Japanese quality circle concepts. Under this process, Xerox employees participated in influencing their work activ...