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Hannah Davis, USA
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Best Practices or Next Practices?
C.K. Prahalad says best practices take companies only so far. At best they allow firms to catch up with their competitors, but it will not make them market leaders. Prahalad, who is obviously not the biggest fan of benchmarking, advises to look for next practices instead, big problems / breakthrough opportunities. To find next practices, he recommends the following 6 questions:
1. Is the problem widely recognized?
2. Does it affect other industries?
3. Are radical innovations needed?
4. Can a next practice impact the economics of the industry?
5. Can a next practice be a source of competitive advantage?
6. Can a next practice create a big opportunity for our firm?
Source HBR, April 2010.
The article made me wonder: when is benchmarking better, and when are you better off looking for next practices?
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Aleyda, Cuba
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Concerning the Benchmarking Benchmarking is a very potent tool for the improvement of processes, although in fact the competitor or leader may not show his best practices?
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Zumstein Anton Manager, Switzerland
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Benchmarking on Best Practices Benchmarking in general is certainly a valuable tool to find out where you are positioned right now.
With respect to best practices I agree with Aleyda, it is questionable if the data available is reliable enough. Still, it can be a good basis for further considerations on possible improvements.
It is rather unlikely that you will be able to reinvent the wheel every year. I therefore promote an evolutionary approach, unless of course you have a brilliant idea already in mind.
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amine salah, Morocco
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Benchmarking must not be Copying Benchmarking may be very useful when it isn't a simple copy of other's experience. When it's so, it limits creativity. Improvements in the same activity aren't necessarily the best. But improvements are very interesting when they come from very different activities.
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CHINELO NWOKORIE Management Consultant, Nigeria
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Benchmarking Gingers you Towards Improvement Benchmarking actually is good practice. Why? Because it keeps gingering you towards improvement and that means you do not stop because competition will always be there. You keep moving on to the next level and that way, you are always in touch with present happenings and you keep looking for better ways to do things. It may not be best practices when it is misused... Some companies just keep doing what others are doing without being creative on their own.
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A.S. Ismail, Malaysia
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Benchmarking is Learning Openly Benchmarking is about learning openly from some else best practices with some improvements to suit your needs.
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Catherine Chong, Malaysia
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Benchmarking is a Basis for Improvement Benchmarking is needed to ascertain where we are positioned in comparison with our competitors. With the knowledge of our positioning, we should then be able to work out a plan for improvement and thereafter, to excel in the industry.
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ANNAJULIA HUNGWE, Zimbabwe
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Use Benchmarking as a Stepping Stone for Next Practice To be beneficial, benchmarking should be used as a 'stepping stone' where after, as Hannah Davis says, you aim towards ' the next practice' - two or three steps up. This will then put you on a level where you become the leader in the practice.
If you find your company always benchmarking, it means you are always number 2 and you are not leading - a scenario that is not healthy for your business.
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zakari bukari, Denmark
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Fit Benchmarking into Context Benchmarking is a good strategy for improving performance, however sometimes it needs modification to fit a particular social, cultural and economic context.
Stereotyping in some context without modification and creativity could lead to under performance and failure.
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Firstep Eapl Astimen Manager, Indonesia
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Benchmarking must Combine External with Internal Know-How Benchmarking is knowledge acquisition from an external tacit knowledge resource that should be combined with an internal knowledge initiative.
After this it can be codified to explicit know-how to create new, deeper know-how to provide problem solution.
Know-how can not be copied and pasted directly.
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Jan Uriga HR Consultant, Slovakia
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Confirming Good or Bad Direction Benchmarking is a great tool for traditional, conservative and no risk taking companies to confirm that they are safe or it could be an alarm clock to start thinking and doing different things. On the other hand it ought to be a strategic decision to keep track of strategy while others are getting crazy in doing relevant changes.
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D P BABU Strategy Consultant, India
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Best Practices cannot become Encyclopedia in that Discipline Best practices are not common tools for operation to each organization. Since strategies link organizations with their environment, so also best practices need to link strategies. Strategies are distinctly different from each area, so also best practices different from each discipline.
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Sia Boon Sen aka David Sia, Singapore
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Playing to the Tune of the Industry or in the Background Benchmarking is essential. Just like any other metrics, it should only be held as a guide at best. Do not be happy with our sustaining or surpassing the benchmarks. It is just like playing within the given set of rules of the game or industry. Go for the breakthroughs that others have yet to ponder about. In short, be the leader in our arena.
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Pius E. Africa, Nigeria
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Benchmarking Does not Limit Firms I do agree with Hannah Davis' thought process. However, I have some reservation with C.K. Prahalad's view that benchmarking "at best allow firms to catch up with their competitors, but will not make them market leaders".
The question is, why not? Whilst benchmarking provides a standard it does not limit firms as C.K seems to be portraying. Serious minded (innovative, aggressive and intrapreneurial) firms can surpass the set benchmarks overtime, attract more (larger) market share and become market leaders in the foreseeable future.
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Daniels MBA Student, United Kingdom
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Benchmarking Should not Limit Firms The key rule is to play the game on your terms not your competitors' terms. So benchmarking is nothing more than a marker, the problem is too many companies associate benchmarking with best practice the question being best practice for who?
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Krishnan Jagadheeswaran Turnaround Manager, India
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Avoid Herding Benchmarking is good as long as it still differentiates your product from that of your competition. Benchmarking of best practices within an industry could be disastrous to the industry profitability in the long term as it results to less and lesser differentiation of the end product to the customer. This would lead to a concept called as herding in a strategic landscape where you have products of similar performances, marketing efforts, intense rivalry thereby resulting in reduced profitability.
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Joy Tio Student (Other), Philippines
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Benchmarking is for Followers If you are just content with being the follower in the industry, benchmarking will suffice. Otherwise, break out of the box and look for the next better practices instead!
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Jagdish B Acharya Consultant, India
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When and How of Benchmarking Whenever improvements happen, it is because of some process changes, measurements, comparisons and controls. Benchmarking tells about "best" sharable targets or goals and hints at processes behind the...
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Madan Gopal Agarwal Business Consultant, India
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Best Practices or Next Practices? It is like 'Who came first: Chicken or Egg?' Best practices are those 'known and proven' practices successfully implemented by companies. Next practices are those which are being evolved or under alph...
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venkataramanan Financial Consultant, United States
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No Such Thing as a Best Practice In the current ever changing world there is no best practice. It is only the next improved practice. Life is evolutionary. Better and better practices are continuously evolved. The wise follow the cha...
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Vivek Hattangadi Management Consultant, India
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Benchmarking with Other Industries Remember benchmarking need not be in the same industry. For instance, a pharmaceutical company may benchmark a fmcg company for improving its distribution services. Benchmarking can encourage a compan...
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Wilf Marshall CxO / Board, United Kingdom
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Best Practices or Next Practices By definition best practice can only make an organization as good as anyone else. If that is all that is required then it is OK to stay in touch and adapt according to whatever evolves. However, if th...
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elvira v. chua Teacher, Philippines
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Benchmarking of Best Practices Benchmarking is necessary especially if research results are not enough for us to go for a decision; or if we have already made a decision but there is still some uncertainty about some areas of imple...
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Trynos Chimusimbe Corporate Financier, Botswana
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No More Benchmarking for Global Banks on Basel II I wonder if Basel II can still be regarded as the basis for best practice for banks after the crisis in which some bank executives had a hand in creating. The problem of benchmarking of best practice ...
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Vinutha Ajay Student (MBA), United Arab Emirates
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Best Practice as a Tool Best practices help in situations when an organization has reached a point wherein it needs to know what to do next without having to spend resources on 'trial and error' methodologies...
It makes se...
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Patricia Dlamini, South Africa
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Benchmarking and Next Practices While benchmarking is critical to an organizations as it repositions or claims a position within a particular industry/market; "next practice" are no doubt the way to go forward to be a leader. Settin...
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John, Australia
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Benchmarking is Basically Comparative Benchmarking is basically a comparative process. If we find that we are not performing as well as others the next step is to determine what and how we want to improve. If we are doing comparatively we...
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Rebecca Roe United States
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Best Practices Vs. Next Practices Best practices come about after research and development have taken place. Usually at places where there is money for research. Many companies that don't have money allocated for research and monitori...
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Tleli Makhetha, South Africa
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Benchmarking, Lagging and Leading The benchmark is an indication of current best practice. Lagging organisations can learn how far they are from matching industry performance and make the necessary decisions about their future. Leadin...
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E Saruchera Finance & Admin Manager, Malawi
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Continuous Benchmarking helps to Avoid Lagging Behind Benchmarking is a useful tool that could be utilised by organisations to improve on their process flows, quality of product and service delivery. It is important that close scrutiny is done so that we...
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Hassaan Khalid, Pakistan
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Mix Benchmarking with Next Practices I guess its a mixture of both.
You benchmark to maintain a certain standard.
But consumers want value which comes when your product is different from others. So for that you need next practices....
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Tonnis van Dam Business Consultant, Netherlands
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Best or Next Practice Research has shown that organisations that benchmark themselves have higher performance growth that those who don't. So benchmarking is beneficial. But why and how? Copying your competitor will not ma...
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Charles P. Keith Management Consultant, United States
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Benchmarking Innovation Processes and Cultures Are you benchmarking the wrong thing?
Interestingly, many of the comments allude to benchmarking for a particular product or production process (I generalize here). Such benchmarking has value in est...
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