Benchmarking and business paradigm shifts

It is the purpose of this paper to develop a better understanding of benchmarking, not only based on possible advantages, but also in terms of its serious limitations as a performance improvement option. For limited rates of change in the past, it was sufficient for management to seek incremental improvements in performance for existing products and processes. This is generally the domain in which benchmarking has been most effective. However, change in the business, social and natural environment has been accelerating. A major concern for top management, especially in large and established companies, is the need to expand its scope to ensure not only survival and success in the present competitive arena, but also on how to make an effective transition to a turbulent future environment. Such a transition of an established organization from the present to the future competitive environment is often described in terms of a 'paradigm shift'. This concept is similar to the dramatic change experienced in physics, when physics as a science moved from a Newtonian mindset to one shaped by the theory of relativity and quantum physics. Under such conditions present in several industries, the usefulness of benchmarking is seriously limited.