The Management Science Behind Our Benchmarking Programs

[Continued...]

 
    Description
Overview
The Characteristics of Industry Peer Networks
How IPNs Help Companies Address Their Limitations
Combating Myopic Tendencies
Conclusions
Notes

Combating Myopic Tendencies
The authors write, "The information accessible through an IPN is critical in counteracting myopia:

  1. "Participating in an IPN allows companies to enhance their capabilities on a regular basis and achieve a better sense of their market position.
  2. "Members typically report that the in-depth information obtained by the IPN is unavailable through other sources.
  3. "In meetings and in informal conversations with their peers, members receive ample and, most importantly, credible information about industry trends and the performance of comparable companies.
  4. Information learned "helps members build realistic expectations for the future and correct for misperceptions about the strength of their own performance.
  5. "The extensive sharing of information helps companies maintain a big-picture orientation by keeping abreast of industry trends... The open disclosure of company-specific information in IPNs helps companies gauge industrywide margins and evaluate with greater precision how they stack up against their peers on key dimensions of performance."

The authors quote an IPN member as saying, "You cannot really get [the] information from other sources... With these guys, in informal conversations and in meetings we talk frankly about what's going on in the industry."

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