Thursday, December 2, 2010

The Problem with Best Practices

HTG peer groups have been focused on best practice sharing since the first group was founded back in 2000. Those learning’s have helped numerous companies grow and become more successful in their markets. But over time we noticed that the value of best practice sharing seemed to diminish. Why? Ron Ashkenas wrote a great post on “Why Best Practices Are Hard to Practice” on Harvard Business Review online that explains some of the issues we found. Here are some excerpts from his excellent article:

“It would be easy to say that processes and tools cannot be picked up and moved from one organization to another. After all, each organization is unique — with different markets, commercial forces, structures, histories, leadership, and cultures. But if there weren't any universals, the sharing and transferring of best practices would be a waste of time, and there would be little learning across companies (or even within companies). But in truth some firms are exceptionally good at "stealing shamelessly." (In HTG we call it SWIPE – steal with integrity and pride every day). For example, think of all the companies that have benefited from Toyota's production model.

So why do some organizations succeed at utilizing processes and tools developed elsewhere while others fail? Here are two common pitfalls of applying best practices, and how to avoid them:

Lack of adaptation: The first pitfall is the temptation to take on a process or tool without tailoring it to the new environment. Because companies are so different, it is rare that a practice developed in one place can be applied elsewhere without significant customization. This not only requires learning the tool or process, but truly understanding the principles behind it. Practice comprehension calls for hard work — far beyond making road trips or sending a few people for training.

Lack of adoption: The second pitfall is to utilize a borrowed process or tool without full leadership support and commitment, as though just having the tool itself will generate the desired results. A former client at GE called this "the difference between doing it and really doing it." Often the wrong people are tasked with driving the process.

One of the characteristics of great companies is that they actively learn from others. But to be successful at doing this requires more than just identifying and borrowing best practices; it also requires adaptation to your culture and full adoption by your leadership. Without paying attention to these two steps, it is unlikely that best practices will actually be put into practice.”

To make best practice sharing valuable – HTG members have to learn how to adapt them to their situation. Seldom do you receive a best practice from a company exactly like yours. There are differences in your market, staff, skills, strategy, focus, management and on it goes. You have to take it and make it your own.

You also have to adopt it wholeheartedly. A best practice that is dumped on your staff to execute will become a failed practice. Ownership and executive management must drive best practice adoption by leading that charge. You can’t throw it over the fence and expect the right results. If you want it to work in your company, then you must own it until it does.

There is still much value to the learning’s we can glean from sharing best practices with each other. But the reality is that unless we adapt and adopt – there is no impact at all. And that makes it a matter of hallucination!

1 comment:

Ted said...

Best practice sharing is one of the most compelling reasons I joined HTG. I was blown away when I heard all the great ideas at my first HTG meeting. To change your business and your life however, you need to pick the most relevant ones and execute. Go ahead, SWIPE at will.

Ted Hulsy