Competitive Benchmarking, A Critical Design Tool Or An Innovation Blunting Exercise That Will Doom Your Product?

Competitive benchmarking: a critical part of the design process that enables your product to exceed customer expectations? Or an innovation-blunting exercise that ensures your product will be derivative, doing little to surprise or delight your customer?

Well, it’s a bit of both actually. Having worked in the product design arena for almost two decades, I’ve seen various approaches to competitive benchmarking, how it has supported the development of some world-class products, and how it has been a devastating impairment to others.

The heavy use of benchmarking in target-setting is the modus operandi for most automotive OEMs. Every attribute of competing products within a market segment is measured: feature content, cost of ownership, performance, fuel economy, etc. Even comfort, appearance, and perceived quality (which are quite hard to measure) will have a metric assigned. Once the picture of your competitors is complete, the design brief can be determined, and targets can be set for the new product to ensure success. For example, “We want our car to be competitive for performance, so it should have a 0-60 of less than 4.5 seconds; we want our car to be the best in the segment for economy, so it should achieve at least 48 mpg; we want our car to be comparable to our best competitor for feature content, so it should have these features, etc.”

“Know your enemy,” as the adage goes. This all makes sense, right? Here are a few examples of how this can go horribly wrong.

Innovation is curtailed.

Put too much emphasis on basing your product targets on your competitors, and the design of your product will be defined by those competitors. Did Apple benchmark Nokia products when developing the iPhone? Did Henry Ford benchmark automotive production before developing the moving assembly line? To create a disruptive product, innovation is key. Game-changing products are never the result of targets solely based on what has gone before or established as the norm.

Company culture is degraded.

An overly strong emphasis on benchmarking will likely have implications on company culture. If the default position amongst a design and development team is to turn to competitors when developing a new product, rather than to approach challenges with a fresh perspective, creative solutions can be quashed in favor of tried and tested results. This flawed approach requires much less risk, time, and intellectual rigor to replicate. “Why should we spend more money and take on additional risk if none of our competitors do?” is a real excuse I’ve heard to push back on original thought. Creative, innovative people stuck in those environments soon either find a way to adapt (be less creative), or leave.

Risk of getting leap frogged.

The nature of competitive benchmarking is that it’s based on products that are available now. For a product as complex as a car, the time between design and launch can be several years, by which time all your carefully defined targets may have been surpassed by a more innovative competitor. “Target futuring,” the process in which targets are set at the best + 10% for example, to take account of competitor advances and the time to launch, can only ever be an estimate. I’ve seen firsthand a new product, about to launch, defined by carefully created targets based around the competition, surpassed by a new competitor weeks before production begins.

You can’t measure everything.

Some product attributes are easy to define, benchmark, and set targets for; others are not. For instance, the visual appeal of a vehicle, or how pleasant a mobile phone feels in your hand, or the elements that contribute to outstanding customer service at a hotel are much more subjective and difficult to measure.

Perceived quality falls into this difficult-to-measure category. For a product manager charged with balancing different product attributes, prioritizing some and compromising others, it’s easier to give priority to the attributes that show a definitive and clear-cut value. For instance, thinning vehicle cabin carpets might reduce mass by 20kg and lower cost by $10, enabling mass and cost targets to be reached. The perceived quality and visual appeal attributes are less easily quantified or understood, and as such, are often incorrectly considered less important.  

Intentional misrepresentation of data.

In some instances, where a product must be compromised due to lack of budget, carry-over content, or other unavoidable constraints, competitive benchmarking data can be used to justify inaction or hide uncomfortable truths. It can go something like this: “2 out of 4 of our competitors perform equally poorly for this attribute, and they have decent sales, so it’s no problem for us!” In other words, the product in development will not be leading (or even amongst the leaders) at launch, but reframing benchmarking data like this can avoid tough conversations.

Benchmarking, its impact.

The automotive sector is slow to adapt and innovate. Look no further than the clunky, outdated, and infuriating user interface screens available on many new production cars, 10 years behind the consumer electronics industry. Or the fact that most production cars have changed very little in their fundamentals for 100+ years. Is over-reliance on competitor benchmarking encouraging an insular, iterative, and analogous approach? It’s no doubt a contributor to the slow pace of change in car design and engineering.

Taking an iterative approach and creating targets based on your competitors alone is the quickest and easiest path to launch. With innovation comes risk, but in the current automotive environment, taking no risk could be the biggest risk of all.

A better way.

In the automotive industry, benchmarking services such as A2MAC1 and Munroe and Associates offer valuable insights into the design, engineering, and manufacture of a raft of vehicles and complex consumer products. They can shorten the time it takes to complete competitor research and can offer solutions to complex issues that are already in the market.

But the traps outlined here are real. I’ve seen new product designers and engineers, and sometimes even seasoned business leaders fall into them. Approaching competitive benchmarking as a valuable support in the design process—but never the lead—is incredibly important.

Get this right, and it can make a huge difference to the culture of an organization, the direction of a product development team, and in the creation of compelling, innovative, and successful products.