By Michael W. McLaughlin
It’s tough to pinpoint when copying some other company’s tactics morphed into adopting “best practices,” but somewhere along the line it did. The notion that an organization can transplant the ideas of another has become so widespread that it’s no wonder so many banks, supermarkets, airlines, retailers, and professional firms look remarkably alike.
Best practices—which can be any methods, processes, business models, or systems that people believe to be highly effective—supposedly show the sure-fire way to do whatever needs to be done. But whenever executives tell me that they intend to rely on so-called best practices to tackle a problem, alarm bells go off in my head. Few tools are more widely abused these days.
What’s most disturbing is how ingrained they have become in the world of work. Before examining whether a homegrown solution would be appropriate to address an issue, people routinely ask whether there’s an off-the-shelf best practice they can use.
“Best practices” joins the long list of hollow business phrases such as scalable strategies, seamless integration, and transformational initiatives. Yet it’s a rare project team that doesn’t roll out the idea of taking a shortcut by borrowing some other organization’s proven process or product.
Of course, there is value in learning from others’ experience and success. It’s natural to look at how another company (especially a competitor) untangled a similar problem or created a new market opportunity. Many organizations face the same kinds of challenges, so applying others’ tested strategies and tactics often seems like the ultimate shortcut to salvation. But too often, following the practices of others results in wasted investment and disappointment when the results fall short of their original application.
In one instance, a food manufacturer wanted to reduce costs and improve customer service by reorganizing the company’s distribution network. Using industry best practices for distribution, the company planned to restructure aspects of its logistics and inventory functions. On paper, the practices in question seemed elegant and well-conceived.
But the effort turned into a nightmare when the company discovered that it lacked most of the system support, infrastructure, and workforce to implement the best practices. To even attempt to achieve the purported results, the company would have had to make an unrealistic investment. Eventually, the team went back to the drawing board and came up with its own plan—and lamented the time and resources spent trying to shoehorn someone else’s solution into the company’s unique situation.
United Airlines offers another notable example. In 2004, with much fanfare, United launched TED, a low-cost airline that attempted to copy competitors’ best practices for attracting budget-conscious travelers. In spite of a mighty effort, United couldn’t pull it off. In 2008, the company announced that it was discontinuing the TED brand, and the concept was flushed in early 2009.
Ready . . . Fire . . . Aim
The problem with best practices is this: Using them as a guide lulls people into thinking that a practice already exists, tested and ready, and can be successfully transplanted.
Starting off with best practices can quickly cause an irreversible problem. When you import a practice, your thoughts immediately turn to how to implement that practice, when you should instead focus on what needs to be done and why. If you begin with a predetermined solution, you’re more likely to overlook innovative ideas right under your nose.
Granted, best practices can jog your thoughts and maybe even inspire you. But as a tool for guiding strategic initiatives, one company’s best practice can too easily become another company’s sunk cost. With that in mind, here are four reasons you should dump best practices:
They rarely work. A company’s best practices—however widely admired—function in the context of its particular business processes, culture, systems, and people. Plucking a practice or product from the situation that brought it forth and trying to graft it onto another organization produces results that are by no means guaranteed.
One company forced its entrepreneurial salespeople to change to a tightly controlled, centralized sales process with automated tools, new reporting requirements, and continuous oversight; the company mandated the new process because it was touted as a best practice in sales-force management. After a painful year of trying to make it work, the company’s salespeople revolted: Sales were down, errors were on the rise, and customers were defecting en masse. The use of best practices proved to be an unmitigated disaster.
It’s a follower’s strategy. In an era when customers demand creativity and innovation, why follow someone else’s lead? You may want to become the Wal-Mart of auto sales, but you can bet that by the time you achieve that, Wal-Mart will be on to something bigger and better. In the long run, relying on best practices will doom you to mediocrity. Instead of getting bogged down trying to reverse-engineer the strategies of others, find your own path. Be the leader, not the follower.
Change comes from within. People rarely respond well to implementing some other company’s ideas. In fact, best practices that come from on high usually cause resentment. Let people create their own solutions using their in-depth knowledge of the company’s customers, suppliers, employees, and processes. That will result in ownership of the ideas and determination to get results.
They don’t come with a manual. Business books and benchmark reports are full of snippets about best practices, yet they rarely explain what to do with them. You may have read, for instance, that it’s a best practice to process a customer product return in twenty-four hours. But there’s little guidance for meeting that objective. It’s also quite possible that the organizational change necessary to achieve the goal isn’t remotely feasible for a specific company.
Before You Jump on the Bandwagon
For your next project, ask your team to put best practices aside, at least at the outset. Direct the team to thoroughly explore what needs to be done and why, before leaping to questions about how you will do it.
If you insist on looking at the best practices of others, pull them out only after you’ve come up with your own ideas for solving the problem. Maybe they will spark concepts you can adapt, and maybe not. Develop your own best solutions to fit the context of the individual business. Use another company’s best practices only as a last resort, not as your first idea.
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