Best case examples and benchmarking have something in common – neither is good practice

Every time I conduct training on value chain diagnosis, innovation system promotion, or Local Economic Development, I get asked the to explain important principles or ideas with examples. The question usually posed is “can you give us more examples?”. Or even worse, “this is too much theory, please give us a clue how we can use this information in practice. Give us the best practice”. The hope is that there is a magic formula, silver bullet, case study or a high standard (benchmark) that can be followed that will guarantee us some success without risking too much. Within Mesopartner, we have agreed as trainers to be very selective with our case examples, as they typically narrow down the options our trainees should go an investigate themselves. We promote that people conduct a diagnosis or analysis of their environment, and then develop some strategic options, assess their options – and then make a decision and start with their action. If they made the wrong decision, then they should detect this as soon as possible in order to make corrective action. There are no shortcuts!

The same logic goes for benchmarking. Tim Kastelle recently published an excellent blog post on benchmarking and the myth that knowing how we compare with others will allow us to improve our own performance. This post is a must read. I love the title “You can’t benchmark your way to greatness“. From a complexity perspective I must add that the context wherein you have to define your own strategy is unique, and therefore we know that blueprints from elsewhere cannot work. Somehow everybody knows this, yet everyone wants to hear how others dealt with their situation. This is a circular logic that just doesn’t make sense.

But I must add that in the early days of benchmarking there was a more explicit understanding that you benchmarked yourself with companies that were completely different from your own. So automotive manufacturers benchmarked certain processes (like procurement of components) with photocopier companies. This was then an opportunity to learn and benefit from the different contexts that the respective firms were in. The idea was not to copy the process, but to learn how others used unique factors in their environment to address a specific issue. This is still the important for innovation, as learning from other contexts can provide important ideas on how to try something different. Nowadays, customers asks me to assist with benchmarking because they want to know what similar entities are doing better in order to replicate or copy the processes themselves. The main assumption is that if we do the same things as them then we will get similar results.

So coming back to examples. In my training I like to tell stories of examples, but I try to avoid describing “the method” too much. I rather try to explain the logic, the key principles, or the choices the decision makers in “the example” had to make based on their assessment of their options. I do believe we can learn from other contexts, but I believe the real value is sometimes to recognize that “the example” had figured out what choices they had to make. This is often what my learners are hoping to avoid. It is instinctive to copy the decisions the “best case examples” have made, and not to copy the fact that the example DEVELOPED OPTIONS AND MADE A DECISION, or sometimes they skipped the options part and they just took some specific action (innovation by accident).

To connect this back to benchmarking. The problem with benchmarking with competitors or other locations, is that their current performance is in fact informed by strategic decisions made some time ago. So if we chase the numbers in a benchmark, we are essentially chasing shadows, the competitor is already today making decisions that will result in performance indicators and processes that we will have to chase in 3 years when we catch up with their current numbers (which by then is old news for them). By then, the competitor have already adapted to their new context, while we are still struggling to fully integrate this new learning into our activities.

In conclusion, benchmarking and best case examples (or good practice as it is often softened down to) are not good practice in development. We cannot copy the blueprint, the practice or the approach of someone else. Firstly, context matters. As complexity in developing countries increase, so the importance of basing decisions on the local context increases. Secondly, the thinking behind the options and the decisions made matters even more than the outcome or the visible practice that can be identified during benchmarking or in a case example.