Regression to the Mean

Two of my least favorite memes are "best practices" and "benchmarking". Hardly a day goes by where I don't hear these terms, and never have I seen anyone question their validity and their, well, just plain usefulness. Calling them out as ill-founded notions would be like saying that it's bad to learn from our mistakes.

But then, maybe it's the same thing? Calling attention to the fact that best practices and benchmarking are generally of little value is a form of learning from our mistakes. Both "best practices" and benchmarking represent good ways to regress to the mean. If we followed these concepts to their logical conclusion, we would all strive to be just like everyone else -- or at least the better cases of everyone else -- and our ability to differentiate from our competition would be diminished.

But it's worse than that. Using these techniques does lead to regression to the mean, but more insidiously I believe these are tools for weak thinking, and they are opportunities for vendors to generate poorly earned revenues (I believe good revenues come when you actually help your customers, rather than yourselves).

Getting nicely-packaged advice on best practices, or getting a set of benchmarking numbers, are great ways to safeguard one's job. Who could get fired for following the practices of the industry leaders? [Answer: anyone with a smart boss who realizes it should be your goal to BE the industry leader, not to COPY the industry leader].

Before I go on, let me point out that I am not opposed to competitive intelligence, or to learning from everyone around me. I do it all the time. The difference is in the approach: if you take an approach of constantly observing, questioning, and learning from everything that goes on around you, both in and out of your industry, you would be continuously learning.

Out of this melange of many sources will pop up truly innovative ideas, techniques, and yes even questions. But if the approach is (as is more common), let me spend some time and money asking what the leaders are doing so I can adopt their best practices, and let me get some KPI benchmarks that I can test myself against, then I am practicing followership. I am not practicing critical thinking. What I have observed is that people who pursue best practices and benchmarking studies are looking for reassurance and the comfort of being able to follow someone else -- hardly the mental attitude I would expect from someone who aims to be a leader.

Of course there are valid tactical (a.k.a. cynical) reasons for getting and using this kind of information. Unfortunately, we live in an imperfect world and often our leadership will expect us to justify something in terms of "best practices" or benchmarks.

For example, some large corporations might expect their subsidiaries to measure up meaningfully against industry benchmarks of "percentage of revenue spent on R&D" -- even if there is a sample size of only a couple of hundred quite varied companies, most of them with quite distinct business models.

I personally NEVER use best practices or benchmarks as a tool for thinking, but I have to acknowledge that they won't go away because it is simply too useful to have something to point to that justifies what may in fact be a good idea (for instance, shifting some R&D to lower-cost locations to reduce the R&D percentage to improve profitability without sacrificing innovation).

Using bad ideas to justify good actions certainly has its place. So what is my point? Simple: don't let the pursuit of others' best practices get in the way of critical thinking and developing your own. Strive to

be

the benchmark against which others measure themselves (hint: you can't do this by following).