Benchmarking has been a buzzword for four or five decades. It came true in the years when TQM (Total Quality Management) was the only gospel truth on how to become the best. The Japanese had taken over the world and America and Western Europe to catch up; they needed to compare the best of what the Japanese were doing. And who proposed and continued to propose these ideas? You’re right, the big boys: BCG, Bain, Accenture, PWC, McKinsey, KPMG, Deloitte, Gemini, and the rest.
Benchmarking 101 simply says to get all the metrics of how your best competitor is doing and compare it to their performance. Wherever you perform worst, that’s the gap. You’ve soon cracked the code. Take immediate action to close the gap and you can be as good as them (your competitor) or even beat them. They backed up their presentations with fancy two-by-two charts (visual processes, as Alan Weiss calls them) and CEOs looking for increasingly expensive quick fixes would accept the recommendations and their treasuries would be poorer for it.
Tell me, if benchmarking really is this cure-all antidote to lackluster performance (the big boys would deny they said it was a panacea), how come Kodak didn’t look at its path to survival? How come Nokia couldn’t compare its way to success and beat Apple and Samsung? How about Motorola who invented cell phone technology and Xerox who taught the world how to copy? Why couldn’t the bluest of the blue, with all his technological wizardry, get it done and have to send John Akers into the workforce? Beware, the elephant cannot dance unless and until he decides to dance by changing his genetic code.
So here are the top three reasons why you should never touch benchmarking with a ten-foot pole if you really want to be great, break new molds, and make the competition irrelevant.
1. Benchmarking ignores the culture of the top performing organization
This is the mother of all reasons why benchmarking is a fatal flaw. Assuming you are Intel and the Japanese are eating your lunch, what do you do? Do you go on a retreat and compare the Japanese to blow them out of the water? Will he call a town hall meeting to make everyone aware of the Japanese threat and quickly form Quick Action Teams (QATs) to benchmark the Japanese and pave the way for their glorious return? Do you send your top executives to Harvard to learn the best of benchmarking in order to form a tidal wave movement that makes them invincible overnight? Nope! Nope!! Nope!!! You do what Andy Grove, Robert Noyce (and Gordon Moore) did. They say goodbye to themselves and start all over again. Remember, only the paranoid survive. You can’t beat the Japanese in close combat because the cultures are different. Period! Haven’t you heard culture will eat strategy for breakfast?
2. Benchmarking looks to the future with the rear view mirror
Assuming you’re IBM and you’re the most admired company in the world and you’re mocked as Big Blue, and you hear two little kids are playing in their mom’s garage and they say they want to topple IBM. Do you postpone your board meeting and send spies to see what the guys are up to, or do you compare them? Compare what? Benchmark Apple I or Apple II or iMac that doesn’t exist yet? The Big Boys would deny ever saying that it should be compared in such circumstances. But didn’t they say benchmarking was the alpha and omega of competitive tools? You will never see the future with your rearview mirror, even if you are a wizard. The truth is, when there is an interruption (air travel interrupts sea travel, computer interrupts typewriter, bow and arrow interrupts weapons, etc.), everything resets to zero, so no amount of benchmarking can save you. We live in an age of discontinuity, thanks to Peter Drucker, and when discontinuity catches up with you and your industry, benchmarking is recklessness of the highest order.
3. Benchmarking ignores critical thinking and cannot help you invent the future
The best way to own tomorrow is to invent it. Benchmarking cannot help you do that. Benchmarking is actually the antithesis of reinvention. The most revolutionary inventions of our time were not and never are the product of benchmarking but of critical thinking. Think of products as mundane (now) as paper, post-it-note, and light bulb, to name three. These things never existed before until people’s imagination brought them into reality. To invent the future, you start with a clean slate. You ask simple questions like “why is this job important?”, “what is it for?”, “why this (and not that?”) These kinds of questions allow you to think critically, dig deeper, and invent tomorrow as you others are busy benchmarking and catching up with the supposedly best companies.
There you have it, the three reasons why benchmarking should be avoided like the badge: Benchmarking ignores the culture of the top performing organization, Benchmarking looks to the future with the rearview mirror, and Benchmarking ignores critical thinking and does not it can help you invent and reinvent the future.
If you look closely, benchmarking is at the heart of so-called international best practices in industries around the world and who are the proponents of this “best in class” concept? The great powers of consulting! At best, let me admit it, benchmarking can help you make a little incremental (additive) progress, but that’s not what you need. What you need is exponential (geometric) progress. Now that you’ve read the top three reasons why you should never benchmark, don’t waste your time benchmarking. For any new project you want to start, start with a clean slate. Yes, reinvent the wheel. Remember, Apple reinvented the phone with the iPhone, Starbucks reinvented coffee shops, and you can reinvent yours. Go ahead and do it.