Benchmarking – worse than cheating

CheatingDo you remember back to your school days, and the scandalous crime of cheating by copying someone else’s work?

Why was school-boy (& girl) copying seen as such a sin?

  1. The most obvious reason in traditional education is that you are cheating the ‘grading’ system such that people will think you are ‘better’ than you (currently) are;
  2. But, what’s far worse is that you haven’t actually gone through the learning and development process, for yourself…which is what education should be about.

So why am I comparing and contrasting ‘benchmarking’ with school-boy copying? Let’s first look at a definition:

“Benchmarking: Managers compare the performance of their products or processes externally with those of competitors and best-in-class companies and internally with other operations within their own firms that perform similar activities.

The objective of Benchmarking is to find examples of superior performance and to understand the processes and practices driving that performance.

Companies then improve their performance by tailoring and incorporating these best practices into their own operations.” (from Bain & Co. website – a well regarded Management Consulting organisation selling its benchmarking services)

So, essentially Benchmarking is akin to deliberately (and usually openly) finding out who the best kids in the class are and then trying to copy them…with this being seen as a logical and acceptable thing to do. Business is clearly different to Education (right?)

A number of things strike me about this ‘benchmarking’ definition:

  • It assumes that, if I find someone with excellent ‘result metrics’ (in respect of what I chose to look for) then:
    • the metrics I see are true (undistorted) and tell the whole picture (e.g. cope with differing purposes, explain variation,…); and consequently that
    • I should be doing what they are doing…which implies that I can easily, correctly and completely unpick how they arrived at these results;
  • It is about managers looking for answers externally and, essentially, telling the workers which areas will change, and to what degree (commanding and controlling);
  • It is looking at what other organisations are doing rather than what the customer requires (wrong focus)…and likely constrains true innovation;
  • It focuses on component parts of the system, rather than the system as a whole (which will likely destroy value in the system);
  • It incorporates the related, and equally flawed, idea of ‘best practise’ (rather than understanding that, setting aside the above criticisms, there may be better practises but no such thing as perfection);

Sure, we should be aware of what other organisations, including our competitors, are doing for the good of their customers but attempting to copy them is far too simplistic (see my very first post re. ‘perspective’ ).

It is interesting to read what Jim Womack (et al at MIT) had to say about benchmarking after they spent many years studying the global car industry.

“…we now feel that benchmarking is a waste of time for managers that understand lean thinking. Benchmarkers who discover their ‘performance’ is superior to their competitors have a natural tendency to relax, whilst [those] discovering that their ‘performance’ is inferior often have a hard time understanding exactly why. They tend to get distracted by easy-to-measure or impossible-to-emulate differences in costs, scale or ‘culture’…

…our earnest advice…is simple: To hell with your competitors; compete against perfection…this is an absolute rather than a relative standard which can provide the essential North Star for any organisation. In its most spectacular application, it has kept the Toyota organisation in the lead for forty years.”

And to compete against perfection, you must first truly understand your own system:

“Comparing your organisation with anything is not the right place to start change. It will lead to unreliable conclusions and inappropriate or irrelevant actions. The right place to start change, if you want to improve, is to understand the ‘what and why’ of your current performance as a system.” (John Seddon)

Each organisation should have its own purpose, which attracts its own set of customers, who have their specific needs (which we need to constantly listen to)…, which then determine the absolute perfection we need to be continually aiming for.

You can see that, if we use benchmark metrics, we usually end up back with the Target/ Incentive game. We can expect distorted results and ‘wrong’ behaviours.

The real point – Experimentation and learning: Now you might respond “okay, so we won’t benchmark on result metrics…but surely we should be benchmarking on the methods being used by others?”

The trouble with this goes back to the 2nd, and most consequential, ‘sin’ of school boy copying – if you copy another’s method, you won’t learn and you won’t develop.

“We should not spend too much time benchmarking what others – including Toyota – are doing. You yourself are the benchmark:

  • Where are you now?
  • Where do you want to be next?
  • What obstacles are preventing you from getting there?

…the ability of your company to be competitive and survive lies not so much in solutions themselves, but in the capability of the people in your organisation to understand a situation and develop solutions. (Mike Rother)

When you ‘benchmark’ against another organisation’s methods you see their results and you (perhaps) can adequately describe what you see, but:

  • you don’t understand how they got to where they are currently at, nor where they will be able to get to next;
  • you are not utilising the brains and passion of your workers, to take you where they undeniably can if you provide the environment to allow them to do so.

…and, as a result, you will remain relatively static (and stale) despite what changes in method you copy.

“When you give an employee an answer, you rob them of the opportunity to figure it out themselves and the opportunity to grow and develop.” (John Shook)

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