The Myth of the Best Practice

Einstein was credited with saying that “There is nothing so practical as a good theory.” To the scientist, a good theory, like Relativity, is defined as an utterly logical, defendable explanation for an observed phenomenon, the defining characteristic and value of which is its ability to consistently predict outcomes. In other, there’s an exhaustive proof—substantial scientific evidence to support the explanation, gained through a thorough process of hypothesizing, investigation, testing, and analysis. The business world, unfortunately, rarely sees such precision in its theories.

For decades, the hope and goal of managers has been that by studying and adopting the practices of organizations reported to be the best or “benchmark” in a given area (i.e. the phenomenon), they will realize commensurate success. In truth, this activity has historically yielded very little of value, and the goal remains elusive. In fact, adoption of alleged “best practices” wrapped around management “theories” has literally destroyed dozens of companies. So it’s worthwhile to rethink the concept of the best practice, examine current best practice benchmarking, and offer a another approach for unearthing and leveraging techniques and solutions that are more likely to provide true competitive advantage for their organizations.

Magic Wands & Silver Bullets

Webster’s defines the word “best” as “most advantageous, suitable, or desirable: e.g. the best way.” Occupying shelve space in the business section of every bookseller are countless titles offering management theories and success strategies, the content of which are too often anecdotal reports of companies (and individuals) considered to exemplify whatever theory is being touted. This approach is geared not only toward convincing the reader that the concept being advanced is valid, but also implying that there are best ways.

Kickstarting the flurry of best practice books was the 1982 bestseller In Search of Excellence, which identified 43 excellent American companies and tried to distill the sources of their success. By 1987, fully two thirds of the “excellent” had ceased to be so, and some were in serious trouble. Curiously, this seemed to only fuel the demand for those kinds books. Curiouser still, four out of five business books bought today never get completed by readers, according to Financial Times.

Yet new management theories supported by fleeting or flimsy evidence continue to fly off shelves at the hands of readers hungry for the potion that will magically lift their organization to new levels of performance. Given that industrial engineer (and world’s first management guru) Frederick Taylor’s search for the one best way to do a given task was discredited a century ago, it’s a head-scratcher that reliance on outside best practices has become so central to organizational strategy. Yet, virtually every new corporate performance improvement initiative includes some sort of structured activity focused on external benchmarking, in an effort to discover, document, and possibly adopt existing best practices.

A survey by the consulting firm Bain & Company a few years ago found that not only did the average company use less than half of the 25 leading management best practices, but also that the life cycle of a new technique had shrunk from a decade to a year or less. Bain’s research further concluded that the probability of success in applying the latest new best practice is about one in four.

At the heart of the motivation behind the search for best practices is a paradox: Continuity through change. Organizations seeking ways to ensure their future success struggle under the constant pressure to continually improve, innovate, and even reinvent themselves in order to keep pace with, if not lead, a changing marketplace. To this end, they seek new techniques and approaches to solving complex business challenges and realizing competitive success. As they should! But…

Silver Bullet Syndrome

…under this pressure, managers eagerly grasp at the latest new ideas, which, in general, are supposed to reveal the real key to competitive advantage, the proof of which resides in the practices of the cited companies. A few months later, with the ideas barely tried out and a winning edge still as illusory as ever, some new idea is unveiled, again miraculously supported by best practice examples. Managers trying to keep up with the latest management techniques often find that by the time they have implemented the new craze, it looks outdated.

The cycle is self-perpetuating: a new practice magically appears and develops an initial base of advocates who tout its success. A few studies may be carried out to demonstrate that the method works. As others attempt to execute the technique with little or no success, the inevitable backlash sets in, and a handful of vocal opponents begin to criticize the usefulness of the reported technique or practice. (See Fig. 1)

Such criticism typically has very little effect, and soon the appearance of another new technique and repetition of the same cycle occurs. The real danger in this cycle comes when these ideas contradict each other, because turmoil and confusion aren’t far behind.

Redefining Best Practice

Explaining this cycle is the Silver Bullet Syndrome, a.k.a. the irresistible temptation of quick and easy solutions to difficult and complex problems. Persisting under this rather naive approach renders the quest for true best practices an inherently fruitless pursuit. Neat solutions for complex puzzles are rarely, if ever, found in phone calls or visits to other companies.

Adopting highly touted best practices willy nilly doesn’t work for the same reason that the average recreational tennis player religiously following Roger Federer’s daily practice routine and attempting to mirror his strokes won’t become even a top 100 player, much less best in the world, no matter how hard he emulates what he sees Roger doing: a number of unobservable and intangible factors (e.g. genetic natural talent, depth of commitment and experience, training and coaching, etc.) exist deep within.

Widely reported business best practices are no more true best practices than Federer’s workout routine is his secret to success. Organizations are multifaceted places in which there are many forces cooperating and conflicting at any one moment. Most of the techniques, philosophies and programs that have been published as best practices are overstated, fleeting, and nearly always only the visible manifestations of something much deeper.

The true best practice is an enduring commitment to a set of fundamental values, beliefs, traits, and operating principles that has become mantra and discipline, and which provides a constant cause and context for the entire organization and its activities. This complex combination of primary individual and organizational forces that shape the processes visible to the observer is a better way to think about and define the true best practice.

That perspective raises several questions: How do we find and identify true best practices? Where do they reside? Why are they so elusive?

Pitfalls in Benchmarking

Research—any research—is most valuable when it helps us decide to do something we ordinarily wouldn’t, or to not do something we otherwise would. Done well, best practice research usually enables us to learn something. The difference, though, between great learning and misunderstanding frequently lies in the investigative process. Three major mistakes occur with respect to most benchmarking endeavors: intention, focus, and technique.

Intention

Benchmarking is a valuable exercise when the intent is to learn—that is, gain knowledge and perspective that enable better understanding and enlighten management decisions and actions. If, however, the intent behind benchmarking is to discover and acquire seemingly easy-to-adopt “success” practices in an effort to jump an existing competitive gap by taking an apparent shortcut, the activities are intellectually challenged. Unfortunately, this is all too often the real motive.

Focus

Interestingly, the aforementioned intent is not only counterintuitive, but inevitably leads to off-center focus. An enormous (but overlooked) shortcoming in reported best practices is that they represent only the best of current thinking (see Figure 2), and more often than not represent solutions to yesterday’s problems. Thus, adopting those practices, even if successful, will yield little advantage…advantage that is sure to be fleeting at best.

Benchmarking reported outside best practices puts the organization no further ahead of the curve for tomorrow’s market-driven world, which strikes at the heart of the search for best practices. By emulating even the best of the past, great barriers to future effectiveness may be constructed. Like the general accused of fighting his last war, managers must face up to current and future realities. Doing so with yesterday’s solutions ensures misplayed opportunities.

The flaw in thinking is glaring when examining best practice reports that focus on rearranging an old idea for a new situation. It’s like reorganizing a regional salesforce when faced with new distribution models. The problem is not how to cut down on the number of sales reps, or what a more efficient allocation might be, or improving sales skills. The problem is that, in the future, there may not be the need for salesmen. While it might be a good idea to improve inefficient processes, this practice will not ensure survival, much less market share, in the future. (NOTE: In a bit of irony, or perhaps symmetry, the publishing industry faces this very challenge.)

Technique

If published practices are most often simply the observable manifestations of something much deeper, the the real task of uncovering a true best practices involves separating the enduring truths from embellished tales. Most documented best practices are the result of superficial reporting rather than real research. Managing people is an immensely complex art form, as any seasoned manager will attest. Thus, it should be fairly obvious that true best practices do not readily reveal themselves to casual observation.

The prevailing reporter mentality most often yields half-truths, which in turn lead to incomplete understanding and conceptual misapplication. Neither real learning nor insight is gained by this approach. (NOTE: I spent eight years as a full-time program designer, and later instructor, at Toyota, and it took me at least half that time to truly understand what made the company tick; it took me the rest of the time to master the disciplines to the point I could share that knowledge—through writing and reporting—from a subject matter expert perspective. I spent nearly four years working with and around designers to understand design thinking.)

New Directions

If true best practice is not to be found outside the organization, where does it reside? Internally. The truth lies within. Start with the notion that the true best practices already exist at various levels and locations, and to differing degrees, within the organization. Because over time they have been integrated into—and reflect—the corporate DNA, the difficult task becomes discovering—or rediscovering—and distilling those guidelines in such a way that they are applicable in any situation.

In short: study your own best. While this seems to be an elementary concept, it is mostly overlooked (or taken for granted) by most managers. The idea is easier to grasp if we take it outside the context of the organization.

(At this point, you may want to revisit my previous post, a parable on the perfect pie crust!)

A Basic Analogy

Like a company, the human body faces challenges and dangers every day. We can choose to be either reactive or proactive in our approach to staying healthy. In the reactive approach, we either wait until we don’t feel so good, or ask someone else what they do to stay healthy or “in shape.” Neither choice promotes consistent health. The first grants only temporary relief to what ails us. Treating the symptom and not the cause ensures a return of the problem in one form or another. The second isn’t much better—one individual’s health regimen will be at best marginally effective for another. Given genetic differences in things like body morph type, muscle mass and density, and metabolism, one person’s level of exercise or caloric consumption is not necessarily ideal for another. A reactive approach to health is thus difficult to defend as a means to consistent wellness.

In taking a more proactive approach, the goal is to maintain or improve our state of health. We seek guidance in diet and exercise, and acquire information on how our body works and what it needs to stay healthy. This knowledge is applied with personal modification to suit our physiology. Once we know our body well, we can plan our health practices, which must be consistently followed. We regularly monitor our status to ensure we maintain our wellness and achieve our health goals.

Organizations also have two options to consistent performance. One is the all-too-typical approach, which is to wait until something happens in the marketplace and then react to it. (Including benchmarking in search of a silver bullet.) If lucky, a quick-fix is found that enables fleeting reprieve or short-term gains. The problem with this approach is two-fold. First, it rarely solves the problem or installs a lasting solution that can be effectively integrated into the organization. Second, it is a one-purpose pill. Any new challenge will require a new benchmarking effort. The organization has learned nothing new about itself.

True growth—and the ability to constantly improve—mandates a mindset of continuous learning. A better method is to understand the internal conditions present and necessary for organizational health, and commit to a consistent regimen of communicating and exercising those practices.

Conclusion

Technology and socio-economic forces are combining to restructure a market landscape in which competitive advantage can evaporate overnight. In such a disruptive environment, any best practice approach must be so basic to human interaction that it will play as effectively in 2050 as it does in 2011. The most essential realization is that true best practice is built on a bedrock of fundamental values, beliefs, and principles, and always precedes the visible activity that most mistake for best practice.

The focus of anyone attempting to improve performance should be on inventing future market positions and creating new opportunities. The future will belong to companies that adopt timeless truths of effective management, rather than transient trends.