[Brain Candy] Why strategy is not about benchmarking

???However, when some companies are trying to justify venturing into the unknown, the most comforting thing is to know that someone else has already tried it. Actually, that someone isn???t just anyone ??? it???s usually a competitor. A competitor can provide proof that something works or doesn???t, in the exact same context as you. If the signs are that something works, then somehow, proof is shown and a company feels assured it???s a safe area to venture in to???.

I could not agree with Jonathan more; ???The Fallacy of Proof is a killer. It???s a killer to both innovation and improvement???.

But there is another problem with following another organisation when making strategic decisions, or decisions around innovation, and that???s the assumption that the company you???re observing has in fact done its homework, the assumption that they know what they???re doing, and that following them is therefore beneficial (like allowing you to pass an exam).

What would you say if I told you that in a recent McKinsey Quarterly survey of 2,207 executives, only 28 percent said that the quality of strategic decisions in their companies was generally good, a whopping 60 percent thought that bad decisions were about as frequent as good ones, and a meager 12 percent thought good decisions were altogether infrequent?

Let me break this down for you:

  • 28% said quality of strategic decision good
  • 60% said bad decisions were as frequent as good ones
  • 12% said good decisions were infrequent

This means that if the answer to the question ???Can we find an example of someone who has already done this????, is yes, then we can also assume that there is a 72% chance that the quality of that strategic decision was bad!

I???m not a gambler but those do not seem like good odds to me!

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