Monday, September 22, 2008

Surviving Best Practices

Posted by Mark Brousseau

An interesting article from Business Finance magazine on best practices:

The Pragmatist's Guide to Best Practices
by Anand Sanwal
Created 08/18/2008 - 17:11

Are you suffering from best practicism? There is no doubt that best practices can be helpful.

Why wouldn't an organization want to learn from others who've been down a similar path, as this can help to avoid costly mistakes and may yield quicker results. But taken too far, the pursuit of best practices can replace independent thought and actually have deleterious impacts on an organization. When this occurs, an organization is afflicted with what we call best practicism -- the errant belief that replicating other organizations' processes, strategies, and ideas is the route to success.

The Skeptic's Guide to Best Practices
When used in moderation and carefully considered, best practices can be immensely valuable. The key is to have a framework by which to evaluate best practices so that you can determine which are really "best."

There are eight key considerations or questions to use when you are evaluating a best practice:

1. Who is the messenger or advocate, and what is in it for them?

Remember that it pays to be skeptical, as many folks are trying to sell you something along with a best practice. Ask lots of questions and push the vendor on their claims.

2. Is it a well-constructed, multidimensional best practice or one-dimensional silver bullet?

Major organizational issues and challenges are never one-dimensional, so it is a fallacy to believe that complex problems can be solved with simple solutions. If the best practice advocate doesn't have a plan that considers processes, systems, and organizational culture and behavior, it is not sufficiently robust.

3. What is the detailed ROI of the effort, and is it reasonable?

The costs of the effort should be well-detailed and should consider ongoing costs in addition to the upfront costs. Although the ongoing costs may not be precisely known, they should be included using the best information available.

The benefits should also be quantified. Nebulous claims of increased transparency, agility, customer retention, etc., are not sufficient, as these vague claims are impossible to measure and hold people accountable to. Remember that what gets measured gets done. This forces people to think about the specific economic reason they're undertaking the best practice and also lets those reviewing the effort evaluate the reasonableness of these assumptions.

4. Is the opportunity compelling even when I discount the benefits significantly?

Even with an ROI in hand, discount the benefits and increase the costs to see if the results are still compelling. Failure rates for multiyear projects are quite high, especially those that may involve software or technology. If the initiative still seems compelling after discounting, you may be onto something.

5. Is the best practice based on a practitioner's or a consultant's view of the world?

If the best practice has been dreamed up by a consultant, run! If it is based on the work of practitioners who actually built the discipline and understand the organizational complexities of making real change happen, then there may be something of merit in it.

6. In other organizations who've adopted the best practice, who is talking about it?

If you want to understand the power of a best practice, look to see if senior management is talking about it. If the CEO, CFO, CIO, unit president, et al., are talking about it, the effort has gained some momentum and gone beyond a single organization or individual whose pet project it is.

7. How long have other organizations been doing it, and what have the results been? Are the results believable?

Ask lots of questions about the results to understand the methodology that they are using to make the claims about performance. Remember that there are numerous other things going on within an organization at any time that may impact performance. Make sure that the causality they may be indicating makes sense and is credible.

8. Can you keep the employees who may lead this effort working on it for the life of the initiative?

Many best practices require multiple years of effort to realize the benefit. Oftentimes, people who begin the projects get credit for selling the vision and starting the project and then they move on. Then, if the benefits are not realized or the costs spiral upward, the original person is not accountable, as they can claim that they were no longer involved. Therefore, keeping the original visionary tied to the project is important, as it ensures that they really believe in the idea and are comfortable in delivering the benefits they've outlined for the given cost.

Now Separate the Fluff from the Stuff
When you think about all of the factors that drive a business to be a success or failure -- industry, management, talent, market conditions, competition, innovation, customers, vendors, strategy, luck, geographical focus -- it is amazing to think that plucking ideas from other companies and putting them into your own can work universally. But this thinking happens all the time because of the structure and sanity that best practices seem to provide in an increasingly complex, fast-paced, and sometimes insane business world.

For long-term outperformance, organizations would be better served to cure themselves of best practicism and aspire to become the leading practice. Once they've done this, they can take satisfaction in watching others follow the best practices they have developed.

1 comment:

Mike Korner said...

Right on!