Operating Principle
2–4 min read
Benchmarking against competitors feels like exactly the kind of disciplined, evidence-based improvement a well-run firm should do. Look at what the best players are doing, adopt their strongest practices, close the gap.
Do this consistently, across an entire industry, and something less obviously useful happens. Every firm converges toward the same operating model, the same features, the same processes, because everyone benchmarked against the same set of leaders and adopted similar answers. The industry doesn’t get better at differentiating. It gets more similar, competing harder over an ever-narrower set of dimensions that all firms now share, while the actual variety that used to let customers choose meaningfully between options quietly disappears.
Operating Question
Why It Matters
Firms that benchmark reflexively, adopting whatever the leader does simply because the leader does it, are trading their own distinctive position for a safer, more average one that happens to converge with everyone else’s. Benchmarking operational efficiency is often reasonable. Benchmarking the things that are supposed to differentiate you is usually a mistake, since it erases the exact distinctiveness competitive advantage depends on.
Supporting Evidence
Michael Porter, “What Is Strategy?” (competitive convergence through imitation)
Research Notes
Some convergence is genuinely necessary, table-stakes practices that customers now expect from anyone in the category; the discipline is distinguishing those from real differentiators.
Benchmarking can still surface genuinely useful operational improvements; the risk is specifically benchmarking the dimensions meant to set you apart.
Practical Actions
Distinguish between benchmarking operational efficiency and benchmarking your actual differentiation.
Ask whether adopting a competitor’s practice moves you toward convergence or toward genuine advantage.
Protect the specific dimensions where you’re intentionally different, rather than benchmarking them away.
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