People who benchmark have got it all wrong. There is no reason to do it, and for those who do, you are actually holding yourself back. I had this epiphany while spinning (and for those of you who regularly read my blog, you know I love this exercise and actually find it a great source of business experience).
In my spinning class, there are electronic devices on the bike that show your RPMs, watts you’re generating when you pedal, and the distance you’ve gone. All this information for the 25 riders is splashed across a big monitor at the front of the class. Every Saturday, I am consumed with trying to beat one specific rider who is better than me. Unfortunately, I usually do not succeed. The funny thing is I don’t think he even knows I exist. One class, I decided not to pay attention to his stats, and simply did the best I could. The result: I beat my best record by more than 5% and surpassed my nemesis.
So, what does this have to do with benchmarking? EVERYTHING. Comparing myself to a rider is just another form of benchmarking. But I never reached a breakthrough until I focused on doing the absolute best I could without comparison. Similarly, when a business compares itself to a more successful business in its industry, it is unlikely to achieve that success. The reasons are many: the culture of the businesses may be different, the leadership styles may be different, they might have different customers, and the list of differentiation goes on. These cannot be duplicated in your business. More fundamentally, even if you start to operate like the best, you haven’t really achieved anything. You’re just a copycat; all you’ve done is make yourself as good as that business. And, in order to win customers from an existing leader, you can’t simply be “as good,” you’ve got to be better.
The next reason why benchmarking is all wrong, is that it focuses too much on what your competitors are doing. By benchmarking, you actually assume your competitors have made the right conclusions about what customers want, when they want it, what price they will pay, how it will be delivered (among other items). But why are we so sure your competitors have it right? And even if they are, merely being a copycat will not make you a market-leader.[pullquote]BENCHMARKING FOCUSES ON COMPETITION AND NOT YOUR CUSTOMERS[/pullquote]
The bottom line is, benchmarking focuses on competition and not your customers. You need to relentlessly focus on understanding exactly what your customers want and create a superior customer experience. Instead of looking ahead trying to catch up to your competitors—look from side to side to see who is with you. They are your brand ambassadors. Serving them will do more for your business then chasing behind and comparing yourself to a competitor ever will.