One of the standard tools in the business toolkit is benchmarking, and I'd like to suggest that it has limited value. The idea of benchmarking is simple - we assess what we are doing against our competitors. If they are doing something wonderful that we are not, we copy them.
Problem 1: If we benchmark ourselves against competitors, we are looking at the results of their old thinking - in other words we're seeing the results of something which they planned some time ago, and it will take us some considerable time to implement what they are doing. By the time we do, they - if they are any good - will have moved on to something else, so we are always riding in the wake of their success.
Problem 2: I used to be a professional musician and there was an instrumentalist I particularly admired. I learnt, painstakingly, to play just like him. I was delighted one day to read a review in the music press which compared me to him. Then one morning I woke up to the realisation that the best I could ever be, if I continued to pursue this route, was a copyist - someone with no style of their own. I set out to create my own brand and style and received far better plaudits from reviewers who never again compared me to him.
The best businesses have their own brand and style, their own flair and edge. They may well look at the competition but ultimately it's their internal recognition and development of their own talented people that creates their success. If we are simply copying what others are doing well, then we are copyists and not originators. Our brand is a shadow brand, without any real form or substance.
Problem 3: How do you compare like with like? Because your organisation is (theoretically) different, it's almost impossible to know whether you are really comparing things which are similar. For example, your production processes and equipment may not allow you to do what your competitors are doing without huge financial outlay; the other organisation may have people skilled in areas which your organisation can't match.
Problem 4: It's expensive and time-consuming. Why not pour that time, money and energy into positive developments within your own organisation?
Problem 5: You'll never find your own talents if you spend your life comparing yourself to others. Which was really problem 2, but I liked it so much I thought I'd paraphrase it. It provided a useful benchmark...
There is a place for competitor analysis and for quick and dirty comparison with other organisations. But don't let benchmarking gather momentum and become an end itself.
David
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In my opinion you didn't quite understand what benchmarking is about. Looking at the competitors is only a very small and weak part of this powerfull management tool. It is a very usefull methode to innovate by adapting good and best practices from other organisations. The main focus are better practices. And these can not only be identified at competitors.
ReplyDeleteM.Grau
Michael - thanks for your post. My comment reflects what I have seen many organisations do in the name of benchmarking, and it has slowed them down, rather than improved their businesses.
ReplyDeleteI accept fully that effective benchmarking involves more than this, but to the small to medium sized enterprise, it's often about trying to copy what others have done at the expense of seeing what they can do for themselves.
David