How to Escape the Innovation Benchmark Trap
Benchmarking compares your organization to others to measure your performance and identify areas for improvement. When done correctly, benchmarking can help you learn from your peers and identify areas for improvement. However, benchmarking can also have negative consequences if done incorrectly. How do you escape the innovation benchmark trap?
Good Vs. Bad Benchmarking
Proper benchmarking helps you understand how you compare to others in your industry and makes it easier to identify best practices. It can also help with planning strategic initiatives and resource allocation. An example of bad benchmarking comes from the story of MCI WorldCom in the late 90s and early 2000s. MCI WorldCom was involved in fraud which inflated their assets. Ultimately, many companies benchmarking themselves with MCI WorldCom went bankrupt.
Innovation Benchmark Uncertainty
Innovation benchmarking, which compares how an organization innovates to others, is becoming more popular. This is growing because leaders are feeling more uncertain about innovation. This uncertainty comes from a lack of confidence in their ability to generate new ideas.
Some consequences of innovation benchmarking include:
Leaders -
- Run unnecessary risks trying to replicate benchmark results exactly.
- Benchmark themselves out of uncertainty and into comfort without realizing it.
- Benchmark their competitors rather than taking a fresh look at their innovation approach.
Escaping The Innovation Benchmark Trap
The best way to avoid the trap is to benchmark with purpose. Learn from peers, but don't assume that what worked for them will work for you. If you follow blindly, your organization can fall apart. It's critical to understand their thought process and discern if their approach is worth experimenting with.
To know more about benchmarks, listen to this week's show: How to Escape the Innovation Benchmark Trap.
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