Business Innovation + Biblical Insight
September 11, 2006
Chasing Best Practices
Part 2: The Dangers of Mindless Imitation
In Part 1 of Chasing Best Practices, Dan Wooldridge pointed out that well intentioned executives can pursue “best practices” to their detriment. Consultants act as “carriers” of best practices through an industry eventually infecting it with sameness. In this issue, he outlines how careless pursuit of best practices can be a path to trouble.
I heard a teacher once say, “Five percent of people think. Fifteen percent of people think they think. And eighty percent of people would rather die than think.” Edwards W. Deming used to say that most executives used “superstitious management”, meaning decision-making without facts or knowledge.
I’ve noticed that a bias for action can get in the way of the need for careful thinking. Decisions are made on “gut feel”, experience, what’s been observed, or what they’ve heard from someone they trusted. The insane speed of business today, the scarcity of time, and the fear of being left behind can cause us to grab at quick solutions. Best practices seem to be a fast short cut to solve problems. And it is this assumption that actually leads to problems.
Problem #1: Not All Things Need To Be The Best
Best practices need to focus on strategic and mission critical activities. Sometimes the all out pursuit of excellence becomes silly. I observed one hospitality business in which the dining staff each night counted by hand, and logged in, the exact amount of sugar and sweetener packets on every table in the dining room. They were exact. They had a high accounting standard. It was also a costly and useless practice.
Problem #2: Some Practices are Irrelevant to Performance
In Hard Facts, Dangerous Half-Truths & Total Nonsense, Jeffrey Pfeffer and Robert Sutton did research on the Southland Corporation that operates the 7-Eleven stores. They had embraced the teachings of a business guru to “get close to the customer” and develop a “service obsession.” Millions of dollars were spent on improving customer service, training clerks to greet customers, establish eye contact, smile, and say, “Thanks.” Courtesy increased all right. But follow up studies indicated that sales were actually higher in stores where clerks were not as courteous. It seems that good service to customers was getting out of the store fast, not fake smiles.
Problem #3: Some Practices We Identify Are Symptoms of the Real Practice
What we grab hold of as a best practice is most often the outworking of the real best practice. American automakers for years tried to imitate the Toyota methods of manufacturing. Toyota was very open in letting their American counterparts visit and observe what was going on. The physical layout of the plants and all the processes operationally and managerially were imitated, but the Americans have yet to catch up in terms of quality or productivity. Many years later, some have realized that it was not the method but the philosophy and the thinking that was different. And as we see from the current performance of American car manufacturers, the philosophy and the thinking have yet to fully change. And yet that is the most important thing.
Problem #4: We Don’t Think Organically or Systemically
We have a tendency to look at best practices with a very modular, plug and play mindset. What we don’t see is that a practice emerges out of a specific context within a unique set of cultural and organizational values and behaviors. The practice also links to other dependent and interdependent processes within a system. Going back to our automotive example, we could take the best parts from every automaker and connect them, but we probably wouldn’t get the best car. The best car results from designing the car as a whole performance system, not as a collection of parts. But we try to do this all the time with best practices – collecting organizational “parts” but not the underlying thinking and the genius of the system from which those parts derive.
You might be spending a lot of effort and money building excellence, but the result might be that you are excellent in the trivial and irrelevant, missing the real source of excellence, and doing things that your organization cannot absorb or use.
Next Issue: How to Pursue Best Practices
Part 4: Biblical Best Practices. Do They Exist?
Part 5: Beyond Best Practices. Creating the Next Practices.
Featured Interview
A Conversation with Bart Wear
Bart Wear pulled off the ultimate customer service coup. His biggest client bought Wear's company, then stepped down and named him president – the first non-family member to lead Casey Industrial. It was a deal built on mutual admiration: "I worked with Vern Casey for years as a subcontractor," Mr. Wear says. "He was a mentor to me in many ways." Wear returned the favor later, putting together a partnership to purchase the Casey family business and complete Mr. Casey's exit strategy.
Mr. Wear says the company is "profitable but not extremely profitable . . . We haven't made a killing." Some of that may be modesty and some of it reflects the cost of growing the business. And Casey Industrial works in an industry that has seen plenty of canceled jobs and bad debts in the new century.
But another factor cuts into the bottom line: "Some of our decisions are made on a basis that is other than strictly bottom line," Wear says.
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From the Archives
Globalization
My friend Ted Lucas has the interesting title of Partner & Equity Strategist at the San Francisco investment fund, Lattice Capital Management. Ted and I often share books and thoughts between us and I think a couple of his recent comments are relevent to the mental attitude we bring to the marketplace every day.
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