You can’t benchmark your way to prosperity.

A Resource For Managers, Business Owners, & Entrepreneurs

You can’t benchmark your way to prosperity.

by

on April 22, 2010

Organizations use benchmarking to try to achieve a number of goals.

Lots seem to make sense.

It seems sensible to find out how you are performing against competitors.

You will find out where you are outperforming your competitors and will find where they have the jump on you.

A number of companies provide this service and do a great job of collecting and presenting data.

The trouble is managers, lacking a coherent strategy, will use benchmarking as their strategy.

This is prevalent in commodity industries where the strategy for many companies is to be the low-cost supplier in their industry.

Others, when they see who the top performing companies are, will try to emulate them.

In some cases, they will try to poach key managers in the hope that the new talent will transfer the success of the front-runners to the company.

The best this strategy will accomplish is to slow down the demise of a company.

It won’t turn around a struggling company and it surely won’t propel a company to the top.

Why do companies use benchmarking?

Mainly because benchmarking:

Here’s the problem.

Benchmarking can shed some light on how you measured up against your competition in the past, but it can’t guide you to success.

Some reasons are:

Would you let these guys set your strategy?

I could go on and on about the evils of benchmarking as strategy, but Tom Peters sums it up quite nicely in this

clip.

Finally, I’m not saying that benchmarking is bad.  It can be useful if you are comparing companies you wish to buy and not manage.  Just don’t let it be your basis for strategy.

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