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Friday, February 19, 2010

Are Best Practices Your Worst Enemy?

by Holly G. Green

Are Best Practices Your Worst Enemy?When I speak to CEO groups, trade associations, and industry conventions, this is one of my favorite questions to ask.

Why? Because I love the reaction from the audience. They look at me like I'm nuts!

Questioning the sanctity of best practices in a roomful of corporate leaders and managers is like walking into a Boston Red Sox convention wearing a New York Yankees cap. Or walking into a Microsoft Corp. strategic planning session with an iPad in your hand. I might as well criticize mom, apple pie, and puppies.

But I dont ask the question merely to provoke a reaction from the audience. I ask it because it may prevent someone from going out of business.

In the 1980's, when Japan was eating our collective lunches in one industry after another, best practices played a critical role in helping American companies develop better quality products. We wouldn't be where we are today had our business leaders not embraced the concept of studying what works best and applying what they learned in their companies.

Over time, however, best practices have become somewhat of a sacred cow. We rarely (if ever) take the time to re-examine them and see whether they still make sense for current market realities. And in today's high-speed business environment, accepting anything on blind faith - even a best practice - can be fatal.

Let me clearly state that I am not advocating that business leaders do away with all best practices. Just the ones that get in the way of achieving your strategic goals and objectives. Here's one that I see all the time.

During strategic planning, a common best practice involves conducting research in your industry to determine where the opportunities and threats lie. Who could argue against this practice? After all, in order to plan the future you have to understand the present.

The problem is two-fold.

One, this kind of research is almost always conducted by experts in their field who bring a boatload of preconceived ideas and assumptions about the way the industry operates. Two, this practice fails to take into account that your next biggest competitive threat may come from an area not even remotely related to your industry.

Do you know anyone who uses a fax machine anymore? Fifteen years ago, the makers of fax machines didn't worry about a little blip on the horizon called broadband Internet. They were too focused on important industry issues like baud rates, printer quality, and the cost of replacement ink. They never even saw e-mail coming.

So when I work with clients on strategic planning, I strongly recommend they make a list of everything they absolutely know is true about their customers, markets, and industry. Then I suggest they have a non-expert research each and every one of those truths. For example, have the CFO look at customer data. Or have the sales manager look at purchasing practices. It's amazing what a fresh set of eyes can see!

Each researcher shares their information with the management team. They explain the approach they took, the data they found, and any recommendations they have. Then I ask, "What questions do you have as a result of your research? What do you believe is possible to do that you aren't currently doing?"

Why is it so important to have non-experts conduct the research?

Because experts are human, and as humans we don't believe what we see. Instead, we see what we already believe. We constantly seek to prove what we think is right, and as a result we miss critical data and limit our success by getting locked into ideas and assumptions that may no longer be true.

So here's a new strategic planning best practice: research what you know to be true, both inside and outside your industry, and do it with non-expert eyes. My guess is that 50 percent of your "facts" will turn out to be wrong, especially if they're more than two years old.

The business world changes very quickly these days, and so should your best practices. Otherwise they may well become your worst enemy.

Which best practices are getting in the way of your success?

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Holly G GreenHolly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast, will change your thinking.

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Anonymous Mike Waddell said...

Using “non-expert eyes” to evaluate is a good application of diversity, i.e. using someone with a different mindset and experience to create a provocation to your thinking. This is a key factor in generating creative thought and innovation, the goal of which is to create some kind of advantage. Creating advantage ought to be a goal of strategic planning otherwise why bother?

1:55 AM  
Anonymous Mike Dalton said...

Holly - an insightful post.

Sometimes best practices are just solutions seeking a problem and starting with solutions is a disaster. Look at what installing GE style six-sigma did to 3M and what it's taken them to fix that. Nothing wrong with six sigma just not the right prescription for that patient.

Seriously though, best practices have a place, but as prescriptions to particular problems - not as cure-alls.

In order to make sense out of all the clutter, managers need a framework, like Goldratt's TOC, for evaluating their particular situation and identifying their leverage points - the place where making an improvement will actually increase their entire system's results. Once they've done that, then they can sort through best practices and see which ones actually address their constraint.

7:54 AM  

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