benchmarking against the competition is stupid

Another reason why benchmarking against competitors is stupid

benchmarking against the competition is stupid

One of the problems of measuring an organizations innovativeness is R&D spending. If you ask people: Who’s more innovative between Apple and Microsoft? They’ll say Apple. Yet if we measure them based on patents and R&D spending, most people don’t know what they’re talking about. Microsoft blows Apple out of the water on R&D.

Yet, the reality is that Apple is more innovative than Microsoft.

Spending huge on R&D does not equal innovation.

You can spend all you want on innovation, but you can’t guarantee success. In fact, the most innovative companies are not necessarily the biggest spenders, according to Booz & Company’s recent global innovation study. What matters instead? The ability to build the right innovation capabilities to connect with the overall business strategy and other critical capabilities.

But what the heck does that mean?

These lists make for good conversation, but they also prove to be worthless if not approached with objectivity. Why?

As Jason Cohen points out, organizations (and humans) have an unhealthy fixation to emulate #1:

We tend to fixate on whoever is #1, in business as with sports, tacitly assuming that the contest is mostly skill and therefore the tournament has selected the rightful leader. But I’m not so sure we know that skill/luck proportion. I’m not so sure we can assume the contest (marketing, sales, product) and tournament (the marketplace) picks #1 based on repeatable, codify-able skill-set. Same with #2 or anyone else.

That number #1 is dictated by a system, a market, not people. On top of that, if you give people a list of the most innovative companies; they’ll want to emulate #1. It’s that simple. We’re suckers for it.

This phenomenon plays out in other areas as well. Look no further than Google’s search results where everyone is aiming for that number one spot. And to take that #1 spot, competing businesses study the domain holding that #1 spot, dissect their tactics and then emulate the same tactics so they can somehow someway get that number one spot. Oh and by the way, these companies somehow ignore that they are not the only ones following the same strategy.

The outcome is quite predictable, and because of this, it makes Google billions of dollars in revenue because everyone is mindlessly betting on the same keywords!

Ridiculous isn’t it?

When everyone is emulating #1, the result is more of the same.

To put it more clear, let me ask you this: Who did Apple emulate? It’s certainly not Microsoft (who was #1 at a time). Most likely it’s Disney and other organizations who have nothing to do with technology. Organizations that are outside the cannon. Unrelated.

What’s the result? You got it, innovation. And lots of it.

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  • Deb Mills-Scofield

    Great post. By always trying to emulate #1 you also drive towards commoditization…not a good thing!

    • Hi Deb,

      Yes! That’s no-mans land 😉



  • Kevin Mcfarthing

    Agree wholeheartedly, Jorge. R&D spend is an input, not an output – innovation is the output. By trying to emulate #1 in whatever parameter, you are starting today with what they started probably years ago. There’s a great book by John Kay, Obliquity, which deals with the best way to achieve your objectives, and that’s indirectly. So companies should focus on being the best they can be in their own fashion. By all means learn from others (actively and definitely) but trying to copy them from soup to nuts is pointless.

    • Hi Kevin (@innovationfixer),

      Thanks. I call it the Copy-to-Benefit Syndrome 🙂

      I look forward to reading that book. Haven’t read it because it’s not in the US but heard about it a few months ago and have been waiting for it.

      Thanks again,


  • Knowing what your competition is doing is vital. Merely trying to emulate the competition is planning to lose.


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