No comparison: judging your company against the competition could be fatal

Comparisons are a source of endless illusion. As long as we appear to be doing better than someone else, we can feel that we must be doing well, so we don't need to change. These illusions can begin when we compare ourselves with our own past performance (rather than simply learning from it) or with the performance of other organizations.

The companies we're comparing ourselves to may all be performing at lower levels than the market requires. They may all be doing it wrong. Since every organization is unique, another company's solutions may not apply to us. Imitating others may take too long or come too late.

This problem is compounded by the fact that we may not even know what those we're comparing ourselves to are really like. We can allude that we know what these other organizations are doing, but we may be basing our opinions on partial, incomplete or erroneous information.

In our volatile world, standards can change faster than our ability to improve against them. If we've grown at an annual rate of 15 percent compared with an industry average of 5 percent, we may be wildly successful - unless a new competitor from an unexpected direction or unrelated industry finds a way to deliver our service at 60 percent of our cost. We may copy something that is successful today but will be obliterated tomorrow.

Comparing can ultimately lead to a disastrous illusion because it's looking at the past (maybe up to the present) rather than to the future. The past and the present can be a useful guideline, but measuring against the future is where true success is found. Comparison can help us try to get a bigger piece of what we perceive to be the pie, but it can't show us how big the pie really could be or where other pies are.

CAUSES OF THE ILLUSION

What leads us to the idea that comparing can be a successful way to run our business? Here are some possible factors:

* Since from the time we're children many of us feel pressure to be like the "best" - the most popular, best-dressed, most athletic, smartest - comparing can become the "normal" thing to do.

* Many of us have an inherent fear of being left behind, so we constantly check to make sure we're keeping up.

* Because it's much easier to compare and copy than it is to lead and set our own standards, we can let our own lack of originality drive our plans.

* Since it's much easier to look at or analyze the past than to anticipate or create a future, we can easily allow ourselves to become immersed in the past.

* Many of us have a tendency to hero worship, which can lead to the erroneous conclusion that the big guys have already thought of everything and are doing it as well as possible.

SHREDDING THE ILLUSION

Our action plan to shatter the comparison illusion begins with an organizational commitment to look for new paradigms, new rules, a new game. The most important question becomes "How do I lead?" rather than "How do I follow?" We have to find ways to create breathing room for ourselves rather than just fight for a little bit bigger piece of an already divided pie.

In sports, world-class athletes focus first and foremost on their own game. Great sprinters don't necessarily look over their shoulders. Top golfers don't always fret over the leader board. The best wide receivers run their patterns and often concentrate on the football rather than on the defender.

World-class organizations approach their work the same way. They focus on how they can best meet their customers' needs. They are aware of their competitors, but they don't let others dictate their directions or practices.

The survive-and-thrive goal today has to be to develop an organization that isn't exactly like any other - not just to be different, but because difference means something special to all stakeholders. The uniqueness needs to be both external (creative services and products, unusual and original responses to market conditions and customer needs, refusal to merely satisfy minimal trade or government guidelines) and internal (policies that promote rather than restrict freedom of movement, procedures that encourage flexibility of response, systems that measure and benchmark what no one else considers important - or considers at all). In other words, rather than comparing ourselves to standard industry practice or even "best of class," we are constantly asking ourselves the question, "What do we do (or what could we do) better than anyone else?"

Success generally comes from successfully exploiting contrasts rather than from ensuring performance similarities. Marginal advantages in comparative categories have little power to open new doors. It's difficult, if not impossible, to copy others at a fast enough clip to ensure success or even survival. We need to follow analysis of market needs with the question "How can we meet this customer need in a way that no one else is doing - or even considering?"

It's the focus on the special that wins the prize. As Michael Treacy and Fred Wiersema said in their book The Discipline of Market Leaders (Addison-Wesley), "By relentlessly driving themselves to deliver extraordinary levels of distinctive value to carefully selected customer groups, market leaders have made it impossible for other companies to compete on the old terms. . . . No company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market."

We don't, of course, want to reinvent the wheel. But we don't want to race down the competitive highway on retreads, either.

LEADERSHIP ATTITUDES

As leaders, we need to believe and spread the idea to our people that it's contrasts, not comparisons, that lead to breakthroughs and competitive advantages.

We need to learn from but not be content to be compared to our competitors on processes and management methods.

The better route is to look for things that nobody else is doing and exploit these areas. Our competitors, for example, are focusing on price, terms and delivery - so we watch those things, even as we focus our strategy on product value and service.

This is really benchbreaking: the focus on measuring ourselves against the contrasting, unusual or critical - and often very difficult-to-measure - items that will really determine our future success.

The first part of benchbreaking involves measuring the differences between ourselves and others and looking for ways to exploit these differences. Rather than trying to close the gaps or ignoring the ways in which we're different, we try to find opportunity in the gaps and leverage the differences to the limit. In marketing and advertising, differentiation has long been the supreme guiding principle. Today, it has to be a way of thinking in everything we do.

A second key component of benchbreaking is looking for the unusual. It's looking at employee turnover as a measure of how we and our competitors are doing on employee incentives and empowerment - key items for success in the 21st century. It's comparing ourselves to different kinds of organizations - like the concrete company, struggling with getting trucks on site with the right moisture content, that compared its delivery process with a pizza delivery company. It's looking outside the culture for wisdom wherever it can be found.

A third major component of benchbreaking is focusing on the things that no one else is thinking about or measuring. This includes issues like how thoroughly the corporate vision is understood or followed, acquisition or exploitation of unique market knowledge, the organization's learning capacity, new product and service innovation and success rates, percentage of revenue and profit from new products, the ease of information transfer, and the number of new ideas and innovations generated by customers, suppliers, teams and employees.

LEARNING AND ASKING

Comparing generally gets us focused on the wrong thing: yesterday's news, yesterday's results, yesterday's victories, and (at worst) yesterday's illusions. If we do finally beat the benchmark, we can end up in a truly fatal position: believing that we're superior and resting on our laurels. This kind of contentment is deadly.

The only antidote is to remind ourselves and our workers constantly that there's someone out there, someone we don't even know, who's planning ways to wipe us out and take our "secure" position away. It's illusion to believe that what we're dealing with is totally different from anything anyone has ever encountered before, a completely brand-new problem or opportunity. But a more deadly illusion is to think that we can build a future on comparisons and copying.

We need to be pulled by the future, not pushed by the past.

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