Planning, Startups, Stories


Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

The Sad Truth About Best Practices 12

… is that most of the time, they won’t work for you or me. They worked for somebody, some time, in some situation, in the past. Sure, the idea of best practices is attractive. Supposedly you or I can follow along, obediently, and succeed using so-called best practices. Too bad it doesn’t work.

For example, Jim Collins’ blockbuster business book Good to Great, published in 2001, featured 11 supposedly great companies. All of them did extraordinarily well on the stock market for 10-20 years. But by 2008, when Steven Levitt posted Good to Great to Below Average on Freakonomics, two of them had died. He wrote:

Nine of the eleven companies remain more or less intact. Of these, Nucor is the only one that has dramatically outperformed the stock market since the book came out. Abbott Labs and Wells Fargo have done okay. Overall, a portfolio of the “good to great” companies looks like it would have underperformed the S&P 500.

I don’t mean to criticize Jim Collins, his book, or his methodology. I do mean to question the whole idea of so-called best practices. There are so many built-in problems. What works in one case is hard to translate to the next case. It’s different times, places, people, resources, problems, and so forth.

The best use of the so-called best practices is as generator of new practices, new ideas, new possibilities for you, in your business, that you might be able to take in, digest, and adopt to your situation. It’s a lot like business cases and business stories, not intended as recipes to be followed, but rather as examples of what other people did.

However, you have to be careful. Don’t ever just blindly follow. You always think about it, consider the options, how it might be different in your case, and then, if it still sounds good, try it. Carefully.

If I ever give you any advice, I want you to please never take it without thinking first, analyzing, and deciding for yourself whether or not, and how, and to what extent what I say fits your situation.

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  • http://www.dalebrakhage.com Dale Brakhage

    Well written article.
    In my experience, success follows timely, IMAGINATIVE applications of basic concepts, not best practices. As long as competitors innovate, markets shift, regulations change and management fads come and go with the latest best-selling business book, we must all constantly re-create our own Best Practices. Superior acheivement in the basic concepts of product quality, effective marketing, customer satisfaction, fiscal responsibility, efficient communication, and change management fosters business growth regardless of an organization’s age, size or dress code.

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  • http://www.zenstorming.com Michael Plishka

    Great article. In fact, I would venture Best Practices can actually get in the way of innovation. http://bit.ly/aewWNz

  • Leslie Andrews

    Great Article!

    Many organizations today are misguided, and overvalue best practices and case studies. Therefore, dismissing the importance of innovation and tailor made business solutions, which factor in organizational culture, change management, and the execution of strategy.

    Leslie Andrews

  • http://blog.threestarleadership.com Wally Bock

    It seems to me that there are three kinds of “best practices.” Some are the fad of the moment. They rise up and disappear. Others are ideas that deliver a competitive advantage when implemented, but soon become table stakes in your industry. Then there are the ones which, as you note, form the basis for new innovation.

    What Tom Hall and I found in researching Ruthless Focus was that staying with a simple strategy that works generates benefits in the area of innovation. Because people at companies like Nucor or Publix Supermarkets or Wal-Mart or Amazon don’t have to worry about adapting to the strategy of the moment, they’re freed up to concentrate on the work and ways to do it better.

  • http://www.alexanderrea.com Alexander Rea

    Anything that gives power to the risk-averse should be avoided at all costs.

    I developed my own POV on best-practices for starting projects. Along the lines of inspecting your car before a long road trip. How fast I drive and whether or not I need to adapt to the weather depends on the uniqueness of the day.

  • http://www.personalproductivity101.com Royale Scuderi

    Well, kudos to you for saying something that many of us were thinking. I agree, think for yourself and differentiate yourself.

  • http://www.hcm2020.com Amy B Smith

    I always tell my crew that best practices are only best practices in the context in which they sit.

  • http://www.qaspire.com/blog Tanmay Vora

    Great reminder Tim – I have always believed that best practices are contextual. They worked for someone in the past, in their context. It is important to understand our context, our set of business challenges and analyze how a best practice can help us address them.

    As one of the Dilbert comic says – “If everyone is doing it, best practices is the same thing as mediocre”.

    You might like reading my take on Best Practices.

    Best,
    Tanmay Vora

  • http://www.fmtsystems.com Faun deHenry

    Tim —

    Terrific post about best practices!

    Industry best practices are fine as a starting point. But best practices need to be consistent with an organization’s mission and corporate strategy. Trying to follow another company’s best practices means you are “just as good as.” The point is to be better and different.

    Kind regards,

    Faun deHenry

  • http://simplewebguys.com JayTurn

    Tim, right now I have a big smile on my face from reading this post because it is an idea I have been toying with lately. Best practices and experience seem to blend with one another and form a, “This worked in the past so let me do it for you in the future” type of mentality.

    I don’t question the value of experience as it is the foundation for innovation. What I do question is the idea that experience is a replacement for innovation. “It worked for them so I can do the exact same for you”.

    For example, if Facebook was sold off, could Mark Zuckerberg recreate his level of success with a new venture? Even if he utilized the best practices he learned for building a multi-billion dollar company, the circumstances have changed.

    As you say, there is no set formula and it follows your business planning concepts. Plan and adjust as necessary.

  • http://www.ericheinzman.com Eric Heinzman

    One of the problems I have with the blind use of “best practices” is that I’ve seen too many overly risk-averse, bean-counter types use them to stifle innovative thinking. “Best practice is to do it this way” is all too often a conversation-ending tactic used by those with a CYA, play-it-safe mentality.

  • http://www.marketinghuddle.com Mike Saunders

    Tim,
    Great observation!
    I wonder how many of those best-practices would have continues on “best” if the economy had not taken a dive? I think that an enormous level of factors changed in business, and not just in the financial markets, that changed the formulas that used to work!

    Thoughts?
    Mike Saunders, MBA

    Author of: “The PRISM Salvation-a 3-Step Solution to Social Media Domination for Busy Business Owners”
    Available on Amazon
    Get the 1st Chapter here:
    http://www.ThePrismSalvation.com