Benchmarking exclusively with the same type of organization can lead to insular thinking and incrementalism. This approach limits the scope of comparison to established industry norms and practices, effectively hiding opportunities for breakthrough innovation. Novel solutions and transformative improvements are often discovered by looking outside one's own sector to see how best-in-class organizations solve similar functional problems in entirely different contexts (a practice known as functional or generic benchmarking). Restricting comparisons to direct competitors often results in "me-too" strategies rather than genuine innovation.

A. Focusing on anomalies can reveal unique outliers and unconventional practices, which are often sources of innovation, not a method for hiding it.

C. This describes functional benchmarking, a technique specifically recommended to find innovative solutions by studying best-in-class processes regardless of the industry.

D. Making external comparisons is the very essence of benchmarking, a core technique used to identify opportunities for improvement and innovation, not conceal them.

1. AXELOS. (2010). Management of Value (MoV®) Guide. The Stationery Office (TSO).

Section 5.3.2, Benchmarking: This section discusses different types of benchmarking. It implicitly supports the answer by contrasting competitive benchmarking (against similar organizations) with functional/generic benchmarking, which is noted for its potential to drive innovation by looking outside the immediate sector. The guide states, "Benchmarking against organizations in different business sectors that are recognized as 'best in class' for a particular function... can often lead to breakthrough improvements." This highlights the limitation of only looking at similar organizations.

Section 4.3.3, Generate: This section on generating proposals emphasizes creativity techniques. The principle of seeking inspiration from diverse and unrelated sources to foster innovation is a core theme, which aligns with the idea that limiting the pool for comparison (as in option B) would stifle this process.