THE BLOG

Best Practices Lead to Mediocrity

05/19/2015 02:21 pm ET | Updated May 19, 2016

2015-05-19-1432059303-6982484-100satisfaction.jpg
Have you ever had a situation where you never really resonated with a standardized business concept or known truth? You know what I am talking about... one of those concepts, which every good leader should know and implement throughout the organization? In fact, it is such a standardized concept that your leadership competency might be questioned if you did not embrace and execute the concept fully? Many years ago I had that situation and am telling the tale as a learning experience because it is even more relevant in today's dynamic and fast paced environment.

The notion of "best practices" was the concept that incessantly nagged at my leadership prowess. The definition of best practices that I followed (and there are several definitions depending on who you talk to), describes processes that have been vetted for efficiency and then standardized such that multiple divisions (or organizations) can utilize the practices for management and organizational efficiency. This is a great concept to compare processes (internally and externally), but for me it never really felt like a course of action to drive innovation, forward thinking, and drive the company ahead of the competition.

In a former life, one of the organizations I was working with had three divisions along the West Coast with similar raw material inputs, operating parameters, products and customers. The owner of the firm was insistent that we find the facility or competitors with the best practices in areas such as manufacturing, warehousing, shipping, logistics and accounting and then replicate these processes to the other facilities. At first glance, this seemed like a reasonable request, however a deeper dive revealed significant operational dissimilarities at each facility. In each location the workforce availability was wide-ranging, the operating climates (both physically and culturally) were different, the logistics infrastructure varied, and the markets in which they were located had distinctive and localized challenges. In spite of the differences, the belief was that there were enough similarities between each facility that it was common sense to benchmark the facilities against each other in the hopes of developing the most effective and efficient best practices to then implement company wide. Besides, it was reasoned, this is a standard practice that all good leaders know they should follow.

As we were going through the process of developing the benchmark metrics for best practices, I couldn't shake the feeling that we were wasting our time. After working on the project for a while, I began to question and challenge the results as well as the validly of our assumption of best practices, but didn't really have much more that a nagging feeling.

Then a rather fortuitous event occurred. A consultant friend invited me to a business dinner to hear a speaker named C.K. Pralahad (known as CK). CK (who passed away in 2010) was recognized as a leading thinker in the area of strategy, innovation and entrepreneurship. Always interested in learning something new, I decided to attend but was secretly expecting the traditional talk about strategy with all of the appropriate buzzwords thrown into the pot. What a surprise when he started the speech with... "I don't believe in best practices, I believe in next practices." He went on to say, "organizations that benchmark best practices will lead to mediocrity." I sat straight up at this and couldn't believe what I was hearing. In general CK was pitching the concept that organizations should focus on developing the next source of competitive advantage as opposed to focusing on internal benchmarking for best practices. He felt that organizations should focus on "creating aspirations that rest outside the current resource base." Furthermore, he went on to say that, "strategy is about folding in the future, not extrapolating the past."

Up to that time. I had never heard anyone speak counter to the best practices concept, as it was such a standard concept. It was even more embarrassing to learn that CK had been preaching this notion for many years prior! CK's book called The New Age of Innovation - Driving Co-Created Value Through Global Networks details his beliefs and is a must read for all leaders trying to navigate in today's dynamic economy.

So, the next time you think about implementing best practices, pick up CK's book and look to this one quote.... "Companies become winners by spotting big opportunities and inventing next practices." You may rethink your strategy.

Keith Richards is a Partner with the Newport Board Group, a national professional services firm of strategic advisors, seated Board Directors and Interim C-Level executives. He also a Director with Integral Edge Partners specializing in leadership. He is a regular commentator on a variety of business radio programs, keynote speaker and blog author. Keith can be reached at keith.richards@newportboardgroup.com and followed on twitter at @KRLeadership.