In my latest article for the April 2025 edition of Corporate Investment Times, I take aim at one of the most ingrained habits in business: watching the competition.
For decades, leaders have been told to keep a close eye on competitors—to study their moves, respond to their strategies, and benchmark against their success. But here’s the truth: when you’re constantly reacting to what others are doing, you surrender your ability to lead. You trade vision for imitation.
The Habit That Feels Like Diligence
Competitor watching is seductive precisely because it looks responsible. It produces slides. It fills quarterly reviews. It gives a leadership team the comfortable feeling of being informed.
But notice what it actually does to a decision. Once a competitor’s move is on the table, the question in the room quietly changes. It stops being what should we build? and becomes how should we respond? Those are not the same question, and only one of them has your name on it.
The organization is still busy. It is still measuring. It has simply outsourced the starting point of its own strategy to a company whose constraints, balance sheet, and ambitions are not its own.
What the Research Suggests
This is not only a matter of temperament. Strategy researchers have spent years examining when imitation helps a firm and when it quietly costs it.
Work published in the Strategic Management Journal examining the contingencies around imitation strategies makes the point that benchmarking is not universally useful—its value depends heavily on how closely the imitating firm’s circumstances match those of the firm being copied. Separate research into competitive imitation among private enterprises has found that imitation-led strategy can significantly inhibit a firm’s own innovation.
The mechanism is not mysterious. Copying a practice without the conditions that made it work transfers the visible tactic and leaves behind the thing that actually generated the result.
The Convergence Trap
Here is the outcome nobody plans for. When every company in a sector benchmarks against the same handful of leaders, they converge. Same pricing structures. Same feature sets. Same positioning language, until the marketing of four competitors becomes interchangeable with the logos removed.
At that point differentiation has not been lost through failure. It has been optimized away, one sensible quarterly decision at a time.
And a converged market has only one remaining axis of competition: price. Which is precisely the position no one intended to arrive at, reached by a process that felt rigorous the entire way.
When Watching Competitors Is the Right Call
I want to be precise, because the opposite error is just as expensive.
Ignoring your market entirely is not vision. It is negligence dressed up as conviction. There are moments when close attention to competitors is exactly right:
- When you are genuinely behind on something customers have already decided matters. Table stakes are table stakes. Refusing to meet them is not differentiation.
- When a competitor’s move signals a real shift in the market rather than a shift in that competitor’s internal politics. Telling the two apart is the actual skill.
- When you are entering a market you do not yet understand. Learning the terrain from those already on it is sensible. Staying there permanently is not.
The distinction I am drawing is not between awareness and ignorance. It is between using the market as input and letting it serve as your agenda.
What to Watch Instead
If the competitive dashboard is not the right primary instrument, something has to take its place. In my experience the more useful signals are these:
- The problem your customers cannot yet articulate. Complaints describe the present. Workarounds reveal the future.
- What has become structurally possible that was not before. Most category-defining companies did not out-execute an incumbent. They noticed a constraint had lifted.
- Where your own capability is genuinely uncommon. Not what you are good at. What you are good at that others would struggle to reproduce.
- The customers you are currently unable to serve. They are usually a clearer signal of where the market is going than any competitor’s roadmap.
True innovation doesn’t come from trying to outdo what already exists. It comes from imagining something new. It comes from clarity of purpose and the courage to build in a different direction.
In a world obsessed with comparison, the real competitive advantages are clarity and focus. They’re harder to measure than market share, but infinitely more powerful.
Stop Benchmarking. Start Building.
This piece is a call to action for business leaders, founders, and strategists: Stop benchmarking. Start building.
There is a practical test for whether an organization has crossed the line. Look at how a strategy session opens. If the first slide is a competitor matrix, the agenda has already been set by someone outside the building. If the first question is about the customer, the market, or a capability you hold, the agenda is still yours.
The companies that will shape the next decade aren’t looking sideways. They’re thinking forward.
Research referenced: “A contingency perspective on imitation strategies: When is ‘benchmarking’ ineffective?”, Strategic Management Journal (2020).
Related reading: The Danger of Entrenched Success: Why Disruption Rarely Comes from Where You Expect and Dare to Disrupt: Why Reinvention Is No Longer Optional, or browse the full Insights archive.
A version of this article was originally published on LinkedIn.