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You Can’t Benchmark Your Way to Greatness | The Discipline of Innovation

You Can’t Benchmark Your Way to Greatness

If you want to make your organisation more innovative, you need to figure out how to embed innovation throughout the entire organisation.  This is hard work.  It means that you have to have a clear strategy, and a clear point of difference.  Innovation then needs to be central to improving that advantage.

This takes time, thought and commitment.

You can’t make this change by simply copying the tools and techniques that you see other firms using.  The subtitle of The Circle of Innovation by Tom Peters is: You Can’t Shrink Your Way to Greatness.

That’s true, and it’s also true that you can’t benchmark your way to greatness either.

Jeffrey Pfeffer and Bob Sutton talk about this in their outstanding book The Knowing-Doing Gap.  Their objective in the book is to figure out why managers and firms don’t do the things that they know they should.

Why has it been so difficult for other automobile manufacturers to copy the Toyota Production System (TPS), even though the details have been described in books and Toyota actually gives tours of its manufacturing facilities? Because “the TPS techniques that visitors see on their tours—the kanban cards, andon cords, and quality circles—represent the surface of TPS but not its soul.” The Toyota Production System is about philosophy and perspective, about such things as people, processes, quality, and continuous improvement. It is not just a set of techniques or practices: On the surface, TPS appears simple…. Mike DaPrile, who runs Toyota’s assembly facilities in Kentucky, describes it as having three levels: techniques, systems, and philosophy. Says he: Many plants have put in an andon cord that you pull to stop the assembly line if there is a problem. A 5-year-old can pull the cord. But it takes a lot of effort to drive the right philosophies down to the plant floor.

What is important is not so much what we do—the specific people management techniques and practices—but why we do it—the underlying philosophy and view of people and the business that provides a foundation for the practices. Attempting to copy just what is done—the explicit practices and policies—without holding the underlying philosophy is at once a more difficult task and an approach that is less likely to be successful. Because of the importance of values and philosophy in the management processes of many successful companies, the emphasis on the tangible, explicit aspects of knowledge that characterizes most knowledge management projects is unlikely to provide much value and may be, at worst, a diversion from where and how companies should be focusing their attention.

Here’s the problem with benchmarking.  It does nothing to change your underlying philosophy, and without doing this, the tools won’t work.

Peters has recently put together a great summary of what he’s learned over the years on a site called Excellence Now!.  Here is one of the quotes from his slide deck on innovation:

A friend who’s CEO of a Fortune 500 company explained his learning experience from benchmarking:

“First, Tom, it’s not about, ‘Here are the benchmarks—they are your new standards.’ It’s very likely that the outlier who has produced exceptional results has changed the culture of his unit—this was the case in our safety campaign. So if others simply copy his successful procedures, they will amount to nothing, or very little, or be un-sustainable, or even counter-productive, unless an altered culture is in place. Second, situations differ from unit to unit—one can learn from the benchmark, but one must adapt to local circumstances, not follow it slavishly. Third, to slavishly follow someone else’s process is often de-motivating—at best you are a copycat; leaders of other units need to give it their own stamp to ensure ‘ownership.’”

Best practice

 

Obsession with tools is the large firm equivalent to the start-up’s obsession with features.  And the solution to this problem is the same too: don’t focus on tools, focus on the value that you’re creating.

The value created by the Toyota Production System was cars of extremely high quality.  This in turn led to an array of tools and techniques that supported and created that value: just-in-time delivery, continuous improvement, the andon cord, and so on.

To replicate Toyota’s success, you can’t just replicate these tools.  Instead, you need your own purpose.  Every route to success will be different – you need to make your own map.  That’s innovation.

Once you have your purpose, then you can take in tools from elsewhere, and adapt them to fit your organisation.  That’s innovation too.

But you can’t just take ideas from outside and bolt them on to an organisation that isn’t working.  You can’t benchmark your way to greatness.  You need to do the hard work of finding a purpose, and build on that.

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About Tim Kastelle

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

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10 Responses to You Can’t Benchmark Your Way to Greatness

  1. gsatell 18 November 2013 at 10:21 am #

    Great post Tim. I agree that you can’t benchmark your way to greatness, but you can benchmark your way to mediocrity and I think that’s where benchmarking gets a bad rap. It is often a great way to pull up an underperforming area of your business.

    The crucial point is that benchmarking is a starting point, not a strategy. It won’t get you where your going, but will set you in the right direction.

    If you can admit that you’re crap (and every business is in one way or another), benchmarking can be quite helpful.

    - Greg

    • Tim Kastelle 18 November 2013 at 10:32 am #

      I absolutely agree Greg. I actually have some data that supports your point really strongly. It’s not published yet, but it will show up at some point.

      Part of the issue is that by definition 50% of all firms are below average, and one issue is how to best help them. One of the points with the innovation matrix is that the tools that work for them are likely to be different from the ones that work for high-performing firms.

      • gsatell 19 November 2013 at 12:46 am #

        I would say it’s probably closer to 100% of firms are below average in one way or another. Apple, for example, could have done themselves a lot of good if they benchmarked their ad products rather than trying to break the mold of an industry they obviously didn’t understand.

        • Tim Kastelle 19 November 2013 at 3:20 pm #

          That’s probably true Greg. In his strategy classes, John always talks about being fit-for-purpose in the areas that aren’t core to differentiation, which is basically the same principle at work.

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