Benchmarking and best practices are stupid

A friend and colleague, Steven Shapiro has a new book Best Practices Are Stupid coming out at the end of the month. He is right best practices really are stupid, but I repeatedly hear managers asking for benchmarking reports.

But why are they stupid. An article in the McKinsey Quarterly on Strategy (sorry lost the link) puts it well:

Spurious frameworks and torrents of data often obscure the basic principles of good strategy. To beat the market, companies must exploit imperfections that stop (or at least slow) its workings. Such competitive advantages are scarce and fleeting because markets drive a reversion to mean performance as middling companies emulate the best and the worst exit or undergo significant reform.
Good strategies therefore emphasize difference—versus direct competitors, potential substitutes, and potential entrants—not industry-wide best practices.

Instead ask yourself, what could be the ‘killer-app’ that could be developed and take over our market? Then get on developing exactly that.

 

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