September 26, 2006

Chasing Best Practices

Part 3: How to Pursue Best Practices

In Part 1, Dan Wooldridge explained how the pursuit of best practices can lead to "average-ness" rather than excellence. In Part 2 he explains four problems of thoughtlessly pursuing best practices. In this segment, he explains how to think about best practices.

If the pursuit of best practices can be wasteful, even dangerous, does it make sense to go after them? And the answer is yes. But what makes the difference is how you pursue best practices. So here are some suggestions for the chase.

1. Always be on the lookout, in and out of your industry for good ideas. Bring fresh ideas and thinking into your company and industry.
2. Don't just imitate the surface level physical process. Study the practice in its context. Learn how it came about. Learn about its context. Learn what didn't work and why.
3. Separate correlation from cause. Pfeffer and Sutton, in Hard Facts, Dangerous Half-Truths & Total Nonsense explain that Herb Kelleher, CEO/founder of Southwest Airlines was known for consuming large amounts of Wild Turkey bourbon. Leaders who make snap judgments about what best practices might decide that they need to drink lots of Wild Turkey also. But the bourbon only correlates to Southwest's success and is not the cause. Southwest's outstanding culture is the secret.
4. Imitate the thinking and learning process of the best practice organization. Learn from their worldview. What did they see? What did they believe?
5. Try small experiments and pilots. Iteratively test and measure your way to improvement...I repeat...prototype, test, measure, and improve. Adapt to your own culture and systems and people. Constantly improve upon it.
6. Understand what is of strategic importance to your company. Not every practice is mission critical.
7. And if consultants come knocking, ask them for tangible proof that their other clients have improved their performance. And if you buy, still test and measure. And be sure to ask, what it really cost their clients to implement, beyond the initial engagement fee, in terms of money, time, and manpower.

Best practices are best understood in the context of organizational learning. Mindless imitation is not helpful and often dangerous. Thoughtful study of good examples can help us be better thinkers and performers. Probably an initial best practice to pursue is the creation of a tightly knit group of people with common purpose and values who can work as peers to solve problems and advance the mission of the organization.

Next Issue: Are there Biblical Best Practices?

Featured Article

Wal-Mart's $4 Generic Drugs

Because of its size and success, Wal-Mart is an easy target for criticism. But my hat's off to Wal-Mart for beginning to make generic drugs available for only $4 per prescription. The savings to customers can be 50% or more for one of these drugs. It's a small step in the right direction. The rollout begins in Florida with only 291 generic drugs available initially out of 2,100 products available. This number will most likely increase over time.

Some analysts say it won't make much difference overall to the prescription drug market. Some critics say that this is largely a PR move to deflect attention from what they say is Wal-Mart's negligence in making health insurance affordable to its employees. Regardless, this is bound to help consumers who are being hit by increasing health care costs.

Book Review

Prince Charming Isn't Coming

How Women Get Smart About Money

Barbara Stany grew up never worrying about money. As daughter to one of the founders of H&R Block, first her father, and then later her husband managed her money and cared for her. Then in mid-life a devastating financial crisis that eventually led to the break up of her marriage woke her from this fairy tale. She came to the harsh realization that Prince Charming wasn't coming to rescue her, and that she needed to take responsibility for her own financial life. And yet, in spite of the dire necessity to take on this responsibility she struggled with great fear at doing so. She was filled with self-doubt wondering, "If I'm so smart, why am I so dumb about money?"

From the Archives

Corporate Strategic Vision

It Begins With Inner Vision

Enron. Arthur Anderson. Tyco. WorldCom. Their leaders were highly touted, considered the most talented, the best and the brightest. And yet, these and others business disasters represent the largest business failures in modern business history. And all of them were caused not by disruptive technology, superior competition, unforeseen shifts in the marketplace, but by the lack of character on the part of the leaders. In the final analysis, character can take out a company faster than incompetence or competition.