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TheMythofBestPracticesByAnandSanwal,ManagingDirectorBrilliontwww.brilliont.comPleaseconsiderthefollowingquestionHowmanyofyouworkfororganizationsthataspiretobetheirindustry’spreeminentleader?Presumably,noneofyouansweredthatquestionwithayes(hopefully).Andthereasonforthisisthatthereisnosuchthingasaworldclassfollower.Andpeopleandorganizationsknowthis(oratleasttheyshould).Althoughleadershipmaybedefineddifferentlyamongstorganizations,beinga“leadingfollower”isnotaviablestrategyforanorganizationlookingtosucceedandremainindependentoverthelongterm.Althoughpeopleandorganizationsknowthatworldclassfollowershipisnotameanstoachievingglory,surprisingly,manyorganizationsandmanagersseemcontenttofollowtheleadofotherswhenitcomestomakingkeyorganizationaldecisions.OneofthemostpervasiveanddamagingfollowerafflictionswhichhasincreasinglyinfestedcorporatepsychologyandbehaviorisadiseaseknownasBestPracticism.Let’sbeginbyunderstandingthisdiseaseabitmore.BestPracticismistheerrantbeliefthattherearecertainpracticesthataretruly“best”andthatreplicatinganotherorganization’sprocesses,strategiesandideaswithinyourorganizationwillsomehowmiraculouslyyieldabetterrealityorevenleadershipstatus.Bestpracticesarenotallbad,andsomemayactuallyexist,butwhenbestpracticesbecomeacrutchthatreplacesindependentcriticalthoughtandinnovation,itcanhavedeleteriousimpactsonanorganization.Bestpracticismisafollower’sdiseaseandisoftenfoundinorganizationswhoareriskaverseandunimaginativeandwhohavelosttheabilitytobebold.Ironically,manyorganizationssufferingfrombestpracticismoncewereboldandrisktakingbutovertime,somehowthatformercompetitiveedgehasbeendulled.Bestpracticismgenerallysurfaceswhenpeopleandorganizationserrantlybelievethatmanagementandorganizationalperformanceareascience.Thetruth,however,isthatthereisnoformulathatguaranteescorporateleadershiporoutperformance.Althoughobvious,organizationsandmanagersenamoredwithbestpracticesseemtohaveforgottenthis.PhilRosenzweigcommentedonthisinhisoutstandingbook,TheHaloEffect,whenhewritesaboutthesocialscienceresearchdoneoncompanyperformanceandstates,“It’sjustnotveryappealingtoreadthatagivenactionhasameasurablebutsmallimpactoncompanysuccess.Managersdon’tusuallycaretowadethroughdiscussionsaboutdatavalidityandmethodologyandstatisticalmodelsandprobabilities.Wepreferexplanationsthataredefinitiveandofferclearimplicationsforaction.”ItisthisdesirethatissymptomaticofBestPracticismandwhichdrivesitsprevalence.HowWidespreadisBestPracticism?You’llquicklybeoverwhelmedbyallthebestpracticingorganizationsaredoingifyoudosomeinvestigating.Asisoftenthecase,GooglecanbeagoodbarometerforthepervasivenessofatrendsosimplyGooglingtheterm“bestpractices”isinterestingasityieldsover40millionresults.Manyofthesearepaidsearchlinkswhichofcoursemeansthatpeoplearewillingtopayforthisbecausebestpracticesareabigindustry.Thereareinstitutes,roundtablesandcouncilsdedicatedtobestpractices.Andtherearebestpracticesforeverypartoftheorganizationwhetheritissales,marketing,IT,finance,strategy,supplychain,procurement,etc.Nomatterwhatissueyourorganizationoryouisgrapplingwith,thereisabestpracticeouttherewhichsomeoneisprobablyreadytosellyou.
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Ofcourse,notallofthesebestpracticesaretargetedatorganizationsassomeareontopicssuchaseBaysalesbestpractices,butalargemajorityaretargetedatcompaniesandthedecisionmakerswithinthem.Sowithliterallymillionsofbestpractices,itisawonderthatorganizationsstillfaceanyissuesatall?Itwouldseemthebestpracticeforvirtuallyanyissuewhetheritisaboutriskmanagement,retainingcustomers,recruitingemployees,productdevelopment,understandingthevalueofIT,etcwouldhavebeenansweredbynow,right?However,despiteorperhapsinspiteofthebestpractices,companiesstillgrapplewithhowtheyshouldmanagethemselvesandachievethebestperformance.Anothergreatwaytoseeandhearthetalkofbestpracticesisatindustryconferences.ConferencesareinfactawonderfulPetridishforbestpracticism.Virtually,fewifanypresentationsgobywithoutamentionofabestpracticeora‘bestinclass’disciplineadoptedbyanorganization(s).Oftentimes,thepresenterwhohappenstobeaconsultantorsoftwarevendoriscoincidentallysellingasolutionorideawhichyieldsthismiraculousbenefit.Howinteresting.Moreperplexingisthatoverthecourseofadayortwoataconference,youwillhearpeoplewhooftencontradicteachotherinpartsorinwholewithbothcallingwhattheydoabestpractice.Unfortunately,thelogicheredoesn’tquiteholdup.Beingthebestatsomethingimpliesbeing#1akathebest.Andsotherecannotbemultiplebestpracticesontheexactsametopic.Thiseithermeansoneofthepracticesislikelyan“okaypractice”masqueradingasabestpracticeormorelikelythatbothofthespeakersare“sellingthispractice”andlabelingitabestpracticebecausethathelpssellit.WhatCausesBestPracticism?Thewidespreademergenceofbestpracticismhasbeencausedbyaconfluenceofnumerousfactors.Someoftheobservedcausesofbestpracticismincludethefollowing:Belief:Intoday’scomplex,uncertainworld,bestpracticeshelpusmakedecisionsquicklyOrganizationsandthemanagerswithinthem,bothmiddleandseniormanagers,aredealingwitheverincreasingchangeandcomplexity.Organizationsareincreasingly“matrixed”leadingtodifficultoruncertainrelationshipswithintheorganizationandevengreatercomplexity.Inparallel,theworldoutsideofthebusinessischangingatabreakneckpacewiththeintroductionofnewtechnologies,globalization,etc.Withallofthestimuliforchange,itisdifficultforanindividualoragroupofindividualstoseeandunderstandeverythingandsothesearchforbestpracticescanoftenhelpmakethingsmoreefficientandallowfordecisionstobemadequickerbasedontheexperiencesofotherorganizations.Belief:Bestpracticesareeasier&lessriskyRelatedtothecomplexityanduncertaintyelements,bestpracticesarealsoprevalentbecausetheyofferorganizationsaneasyandlessriskyalternativetodevelopingsomethingonone’sownbecausetheyarevettedandproven.Asaresult,the“timetomarket”andcostsarelesser.Belief:SeniormanagementwantstounderstandwhatotherorganizationsaredoingOrganizationsgenerallyadmirecertainorganizationswhetherwithintheirindustryoroutsideofit.Formany,itmaybeGEorP&GorGoogle,butifabestpracticecanbeshowntoseniormanagementassomethingthathasbeenadoptedbyorganizationsthatyourorganizationadmires,itoftengetssignificantandquickinterest.Belief:ThereareexpertswhotalkaboutthebestpracticesotheremustbesomevalueWhenatrendorideabecomeshot,manyexpertsandluminariesemergewiththeirbestpractices(usuallysomeassortmentofframeworks,softwaretoolsandslickPowerPointpresentations)tohelpsolvetheproblem.Inmostinstances,themarketisefficientfromtheperspectivethatifalotofconsultantsandvendorshavecrowdedintoanarea,thatprobablyisindicativeofthefactthatthereisarealorganizationalissuetheyaretryingtosolve.
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Belief:BestpracticescanbetransformationalByutilizingtheknowledgeandexperienceofothercompanies,wearebetterequippedtotransformelementsofourorganizationwhichmaynotbeperformingatanacceptablelevel.TheProblemswithBestPracticism?Nowthatwe’veunderstoodthereasonswhypeopleandorganizationsadoptbestpractices,itisworthunderstandingwhysomeofthesebeliefsareerrantatleastinpartorinwhole.Belief:Intoday’scomplexuncertainworld,bestpracticeshelpusmakedecisionsquicklyThereissomevaliditytothisbelief.Tryingtocomeupwitheverythingonone’sownwouldbefoolishespeciallygiventhesuccessesandfailuresofotherswhichcanbelearnedfrom.Thekeyisinunderstandingwhichbestpracticesareworthfollowingandwhicharenot.Thisrequiresturningacriticaleyetowardsanypurportedbestpracticetoensureitcandeliveronitsoftenloftyclaims.Thereare,infact,manymediocreorevenharmfulpracticesbeingdressedupasbestpracticesandsoitpaystobecarefulanddiligent.Belief:Bestpracticesareeasier&lessriskyYes,itseemseasiertocopysomeoneelseorbelievetheresearchofasupposedlyobjectiveconsultantorvendorthantoinnovateonone’sown.Exacerbatingtheissueisthatpromotinganewideayou’ddevelopedcouldbemuchriskierasitssuccesswillallrestonyourshoulders.Butarebestpracticesreallylessriskyandeasier?Theclaimthatitiseasieroftenmeansthattheorganizationcanachievetheresultsquicker,butifthebestpracticeisreallynot‘best’,doesgettingtothewrongplacequickerreallybenefitanyone?Alltoooften,organizationsmoveforwardtoadoptabestpracticewithoutknowingitsvalueandthemeasurableendresultandsotheyunknowinglymistakeactivityforprogress.Intermsofbestpracticesbeinglessrisky,doesn’ttheexpenditureoftime,moneyandefforttopotentiallygettothewrongplaceopentheorganizationuptoincreasedrisk?Also,thereareoftenmanycooksintheproverbialkitchenwhenitcomestodeployingabestpracticeandthisaddstothecomplexityoftheeffortimpairingtheeaseandincreasingtheriskoftheeffort.Belief:SeniormanagementwantstounderstandwhatotherorganizationsaredoingTheideathatsomethingthathasworkedatGE,Google,Apple,etcwillworkinanotherorganizationisflawedonmultiplelevels.1.WeliveinamultidimensionalworldOftentimes,peoplewillpointtothefactthatwhentheyadoptedsomebestpractice,theirsharepriceorrevenueorprofitperformancewentupafterwards.Whiletheremaybesomecorrelationbetweenthebestpracticeandperformancemetric,itdoesn’tmeanthereisacausalrelationshipbetweenthetwo.Oftentimes,peoplemistakecorrelationforcausation,andofcourse,promotersofsuchdisciplinewantyoutomakethismistake.Theotherproblemisthatorganizationsarenotcontrolledexperimentslikethosedoneinalab.Youcannotholdtherestofthebusinessstaticwhileyouimplementabestpracticeandthenmeasureitsimpactindependentofanyotherchanges.Inreality,theorganizationwaslikelymakingchangestoproducts,pricing,marketingandotherdimensionsalongwithimplementingthebestpractice.Andsoultimately,itisdifficultifnotimpossibletoknowwhichoneoftheseactionsledtotheoutperformancewithanycertainty.2.Don’tbefooledbythepowerofstoryThebeststrategiesarewrittenafterthefactsothatapracticethatworkedatanotherorganizationoftenbecomespartof‘corporatelegend’becausestoriesworkwellwithinorganizationstoconveyideas.Itisdangeroustomistakeagoodstoryforscience.Theremaybeusefullessonswhichemerge,butyourorganization’scircumstancesareundoubtedlydifferentandsocopyingwhattheyhavedoneisnotadvisable.3.PracticesareorganizationspecificThethoughtthatanorganizationcantakeelementsfromanotherorganizationisalsoflawedbecausethisoftenfailstounderstandthecultural,processandsystemselementsthatmayhaveexistedwithinthatotherorganizationwhichenabledsuccessalong
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withmacrofactorssuchastheeconomy,competitivedynamics,industrytrends,etcthatwereinplayatthattime.4.Ifyoucatchuponthebestpractice,theleaderhasalreadymovedonEvenifadoptingthepracticeofanadmiredcompanyworks,youarealwaysplayingagameofcatchupasleadingadmiredcompaniesarecontinuingthepushfurtherahead.AnarticlethatappearedinanissueoftheWallStreetJournalinFebruary2008describedthisphenomenon,Inditex(theparentcompanyofZara)isrespondingtoapredicamentsharedbyothercompaniesthatcomeupwithgamechangingformulas:Eventuallycompetitorscatchup,forcingthepioneerstodoevenbettertokeeptheiredge.LowcostcarrierSouthwestAirlinesCo.ismakingbigchangestofendoffrivalsthathavecopieditsefficientoperatingmodel.InventorycontrolmethodsatWalMartStoresInc.arebeingmimickedaroundtheworld,andGoogleInc.isupdatingitssearchenginetokeepusersloyal.”Ultimately,whileyouarecopyinganother’sbestpractices,theyarecontinuingtomovefurtheraheadandlikelyexpandingthegapbetweenyouandthem.Belief:ThereareexpertswhotalkaboutthebestpracticesotheremustbesomevalueTheproblemhereliesindeterminingwhichofthenumerousexpertsreallyknowssomethingtohelpyousolvetheproblemathandandwhichexpertsareidiots.Theretendstobealotofsizzleandnotalotofsteakoncertaintopicsasitiseasytohangone’sshingleoutthereclaimingtoofferexpertiseinwhicheverareaishot.ItisalsoeasytogivepeopleloftytitlessuchasChiefProductEvangelistandhavethemissueresearchwhitepaperstogivethemanairofcredibilityandlegitimacy,butthesearemarketingtacticsnotdemonstrationsofexpertise.Infact,thereareentirecompaniesbuiltonthisideaofchasingtrendssothatwhenacustomerasksforanything,theycanbethereeventhoughtheirexpertiseisdubiousatbest.Insomeinstances,thereareexpertswhoactuallyactivelymisguideyou.Belief:BestpracticescanbetransformationalSoyou’vecomeacrossabestpracticewhichadvocatesmajorchangestoacompanystrategy,processorpractice,andyou’redevelopingthecaseandvisionforwhythecompanyshouldadoptit.Armedwithevidencefromresearchorganizations,consultants,academicsandotherecosystemplayers,you’vecreatedawonderfullycompellingcaseforwhytheorganizationshouldtransformitsexistingwayofdoingthingsandtheresultingbenefitsyouexpect.Ifyoucangetapprovalforthisinitiative,thiscouldbeasignificantstepindistinguishingyourselfandgettingvisibilityamongstseniormanagers.Ifthereisatechnologycomponenttothebestpractice,thatmay,insomeinstances,lookevenbettersincebeingassociatedwithatechnologyinitiativecanmakeoneseemevenmoreprogressive.Ultimately,allofthesegoodthingscanleadtoincreasedresponsibilities,promotions,etc.Thisoccursquiteoften,anditisnotallbad.Evenattemptingtofollowabestpracticerequirestakingsomepersonalinitiativeandsothepeoplewhoproposesuchinitiativesareambitiousandentrepreneurialandshouldbeencouraged.Buttheirvisionandbusinesscaseshouldbetestedbecausetheyareworkingtowardssomethingwheretheyhavean“enlightenedselfinterest”.Itisimportanttofeelcomfortablethattheirindividualselfinterestcloselymirrorstheinterestsoftheorganizationaswell.Thisisnotalwaysthecase.TheSkepticsGuidetoBestPracticesDespiteallyou’vejustread,bestpracticesarenotallbadallofthetime.Somedoactuallyexistwhichareusefuliffornothingelsebuttoexpandyourworldviewandmakeyouamoreinformedbusinessperson.Thekeyistohaveaframeworktoevaluatewhichbestpracticesareworthconsidering.Utilizingasimpleframework(seegraphic),youcanevaluatebestpracticesthatyourorganizationmaybeconsidering.Inessence,theframeworkadvocatesthatthemoreimportantorcriticalsomeissueisto
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