These Are The Top Three Reasons Benchmarking Is Not Good For You And Your Company

For the past four to five decades, benchmarking has been a fad word. It became popular during the era when TQM (Total Quality Management) was the only proper guideline on how to be the best. To catch up with America and Western Europe, the Japanese had taken control of the world. They needed to compare what they were doing to the best. These ideas were conceived by who? Guess who? The big boys: PWC, Accenture, and BCG.

Benchmarking 101 is simply a way to find out how your top competitor is performing and then compare it with your own performance. The gap is the area where you do worse. You’ve found the key. You can take immediate action to close that gap or leapfrog them. They supported their presentations with elegant graphs two-by-two (process visuals, as Alan Weiss calls it), and CEOs who were looking for more costly quick fixes would take advantage of the recommendations. Their treasuries would suffer.

Let me ask you if benchmarking really is the cure-it-all antidote for poor performance (the big boys would dement they said it was), then how come Kodak didn’t benchmark its way towards survival? Nokia couldn’t benchmark its way to success, beating Samsung and Apple. Motorola invented cellular phone technology, and Xerox taught the world how it copied. The bluest of blue couldn’t do it with all its technological wizardry and sent John Akers to work. The elephant can’t dance until it changes its genetic code.

Here are the top three reasons you shouldn’t benchmark with a ten-foot pole if your goal is to be great, break new ground, and make the competition irrelevant.

1.  Benchmarking ignores the culture of the best performing organization

This is why benchmarking can be fatal. What do you do if you are Intel and the Japanese eat your lunch? You can either retreat to benchmark the Japanese, or you could do the opposite. Are you going to call a town hall meeting to inform everyone about the threat from the Japanese and to quickly form Quick Action Teams (QATs) to benchmark the Japanese in order to make your triumphant comeback? Are you going to Harvard to get benchmarking training for your top executives? No! No! No! No! Fire yourself up and get back to work. Only the paranoid can survive. Because the cultures are so different, you can’t beat the Japanese in head-to-head combat. It’s a fact! Did you know that cultures will eat strategy for breakfast, according to some experts?

2. Benchmarking with the rear-view reflector

Imagine you are IBM, the world’s most beloved company. Two small boys play in the garage of their mother and say they want to overthrow IBM. Are you going to postpone your board meeting to send spies to find out what the boys are doing? Or do you benchmark? What do you benchmark? What is Benchmark Apple II, Apple I, or iMac? These Big Boys would deny that they ever suggested benchmarking in such situations. Did they not say that benchmarking was the most critical competitive tool? Even if you are a magician, your rear-view mirror will not show the future. When there is a disruption (air travel disruptions, sea travel disruptions, computer typewriter interruptions, gun disruptions, bow, and arrow, etc.), you can’t see the future. Everything is reset to zero, so benchmarking won’t save you. Peter Drucker has made us live in an age where discontinuity is a constant. When discontinuity hits you or your industry, benchmarking can be foolhardy of the highest order.

3. Benchmarking doesn’t encourage critical thinking. It can’t help you invent your future.

Inventing tomorrow is the best way to have it. You cannot do this with benchmarking. Reinvention is not possible through benchmarking. Some of the most innovative inventions of all time were, or are still, the result of benchmarking and critical thinking. You can think of products as every day (now), like paper, post-it-note, and light bulbs, just to name three. These products were never there before people invented them. You must start from scratch to create the future. Ask yourself simple questions such as “Why does this work matter?” It serves a purpose. “Why this (and not other)?” These types of questions allow you to think critically and dig deep, and invent tomorrow. While others are busy playing catch-up and benchmarking the best companies, these kinds of questions can help you think critically and go deep.

These are the reasons why benchmarking should not be used as a plaque. Benchmarking ignores the culture and performance of the higher-performing organization. Benchmarking is prone to looking at the past with a rear-view mirror. Benchmarking neglects critical thinking, which can make it difficult to invent and reinvent the future.

You will see that benchmarking is at the heart of so-called international best practices in all industries. Who are these “best-of-class” proponents? These are the big consulting powerhouses. Let me admit that benchmarking can help make incremental (additive) progress at best. But, that is not what your business needs. You need exponential (geometrical) progress. After reading the three main reasons you shouldn’t benchmark, you don’t want to waste your time benchmarking. Start with a blank slate for any project you are considering. You can reinvent the wheel. You can reinvent the wheel. Remember that Apple invented the phone, and Starbucks reinvented coffee shops with the iPhone. Do it.