How benchmarking can leave you on the bench
A few weeks ago, my family and I took a trip to the beach. We arrived in the middle of a monsoon, so I parked quickly in an empty row and dashed into the hotel. The next morning, I looked out of the window and saw, with a mixture of amusement and embarrassment, that I had parked at a significant angle. Not only that, but five cars to the left and two to the right had done the same. My parking faux pas had changed the rules of the game.
Measuring ourselves against others is an inherent human trait, at both a personal and business level. It’s basic risk avoidance. But our choice of comparison could lead to sub-optimal decisions.
When we compare ourselves, we make assumptions. Firstly, as in the case of my parking, we assume that others know what they’re doing. They may not. For example, just because a company is the market leader, it doesn’t mean they excel at everything. They may also have made a conscious decision not to invest in an area on the basis of its perceived strategic importance. Website development for large industrial companies is a case in point. To them, the website is often viewed as a company intro as opposed to a key touch point and sales channel. It doesn’t mean it’s not an opportunity for others, though.
We might also be comparing ourselves with the tallest midget, meaning that the entire industry falls short.
Looking at others in the industry is not a bad thing. It’s the basic tenet of market intelligence. But challenging the status quo or looking outside our industry could also lead to significant opportunities. Take Xerox Corporation, for example. Several years ago they were dissatisfied with their their order-fill rate, so they looked at online apparel retailer, L.L. Bean. Turns out they were 3 times more proficient at moving items from inventory to the customer than Xerox. A visit to L.L.Bean’s facility helped them understand why and take away ideas that they could replicate. I hate to reference Apple, since it’s what everyone does, but I was intrigued to learn that their Genius Bar is apparently modeled after the Ritz Carlton’s guest service. Having recently waited 30 minutes just to pick up a new phone, I’m not entirely convinced they’ve nailed it, but they did check me in and remember my name. No fluffy slippers or mints, though.
So next time you are scanning the horizon for comparisons, think twice about where you look and consider a different direction.
How about you…how do you think about benchmarking as a strategic tool?