Do Best Practices Stifle Innovation?

There is a fierce competition for managerial attention. One comes from Schumpeter's 'creative winds of destruction,' those forces that signify change and growth; and that exemplify the power of innovation to drive both enterprises and the broader economy to exponential increases in wealth.

The other, competing, narrative counsels caution, risk abatement and predictability. Markets abhor uncertainty and reward the forseeable, this notion advises. The perfect is the enemy of the good and all it infers.

So there has emerged a notion that the two are philosophical and, possibly, economic opposites, forever doomed to interfere with each other if the execution of a strategy is predicated on one or the other.

But, as the following article explains, this makes a misguided assumption about the influence of the one on the other. Best practices and benchmarks should be, by their nature and application, transitory. Because the world in which they exist, for however brief a period, is changing too rapidly for any constants to be worthy of the name. The iPhone is seven years old. The tablet is younger still. Texting, social media, China's emergence as a dominant - and possibly 'the' dominant - economic power is still unfolding.

Best practices are guide posts along a poorly marked trail to the future. They provide indices of efficiency, effectiveness, quality and value whose lessons are only beneficial for as long as the circumstances in which they were established remain stable. Which is to say, not very long.

Such benchmarks and processes are a means by which we assess whether we are making progress. It is how we distill the essence of all that big data we are forever accumulating and searching for clues. They are not some aspirational ideal which, once attained, mean that no further effort, experimentation or thought is required. Similarly, the notion that innovation is only present in detached suburban garages in northern California, or that it must, by definition, be the output of three young math whizzes or that any enterprise with more than twelve employees can't innovate is simply delusional.

Best practices and innovations are co-evolutionary influences that inspire, guide and inform our economic development. When appropriately applied, they are mutually beneficial - and always changing. JL

Greg Satel comments in Digital Tonto:

What’s really important is creating a culture of change, where “best practice” is understood to be a transient term, soon to be overtaken by something vastly better.
Applying state-of-the-art tools and processes is widely seen as a mark of excellence. So, perhaps not surprisingly, “best practice” is one of those terms that you constantly hear in corporate circles. Managers often see implementing them as key to their performance.
Yet many experts point out that adopting so-called best practices can stifle your ability to innovate. After all, once you designate a particular way of doing things as “best,” who is going to question it? And if nobody questions it, it won’t be improved.
Still, even keeping those objections in mind, best practices can be immensely valuable, if approached with open eyes and good sense. The truth is that much like any business process, they’re only as good as the managers who implement them. While many do use best practices as a crutch, they can also be used as a platform from which to innovate.

The Value Of Benchmarking

As a report by Accenture points out, benchmarking is an important element of any operational process. Knowing where you stand in terms of costs and value creation is essential to evaluate where you stand competitively. Without a robust benchmarking effort, you are simply flying blind, especially with regard to best practices.
But quantitative benchmarking is not enough. Simply crunching numbers gives you little insight into context and, while it can identify problems, it doesn’t lead you to any viable solutions. So qualitative benchmarking—taking into account context and constraints—is fundamental to keeping operations moving forward.
And benchmarking can help you innovate as well. In every industry, you have some areas of high variance and other areas where both performance and practices have become fairly standard. This often signals an opportunity for disruptive innovation, as Walmart and Dell showed with logistics and Southwest Airlines demonstrated with turnaround times.

Using Best Practices For Organizational Learning

Another important role for best practices is internal organizational learning. At any given time, there are various initiatives within an enterprise which lead to process improvements. Often, these are not codified, but informal best practices that arise from trial and error rather than a focused effort.
Unfortunately, these practices are rarely shared throughout an organization because they tend to be more tacit than explicit. Sometimes, they are minor tweaks and don’t seem important enough to send up the chain of command. In other cases, they are deliberately hidden because they lack official sanction and employees fear reprisal.
That’s why I’ve always found it helpful to have internal best practice programs to share learning. A monthly meeting structured around specific functional areas can do wonders to get middle managers to share ideas that would otherwise be trapped in various silos. In my experience, these are best conducted without senior management participation.
We often think of best practices as something that needs to be driven from the top, but actually most of the really important learning comes from the middle of the organization.

Playing Catch Up

Every good manager wants to pursue excellence, to try to find a way to do something that nobody else can do as well. Through years of experimentation, some smart thinking and some luck, you can hit upon new processes and practices that are measurably better, superior in terms of efficiency, effectiveness and serving the consumer.
Yet still, there are always going to be areas in which you are crap. Maybe it’s an oversight or maybe it’s because a certain aspect of your business simply isn’t a priority, but being crap somewhere is inescapable. You only have so many resources and so much mental bandwidth to devote to excellence. That’s not pretty, but it is a simple, unvarnished truth.
In this respect, the search for best practices can be immensely valuable. By employing them intelligently, you can increase your own performance in areas in which you are weak. So while it’s true that adopting best practices from elsewhere won’t lead you to excellence, sometimes it’s an extremely viable way to save you from being crap.

Working In Perpetual Beta

When Google launched its revolutionary new mail service, it did so in “beta,” which meant that it didn’t consider the service quite finished, but released it to the public anyway. It quickly gained traction and overtook the market leader, Yahoo.  Nevertheless, Gmail remained in beta for five years, long after it had achieved dominance.
That’s the value of perpetual beta. It’s hard to imagine a company like Google would have a problem with best practices, because it recognizes that “best” is a relative term. It doesn’t mean finished or even Leibniz’s “best of all possible worlds,” it just means the best you can do at the time, soon to be improved or even replaced by something else.
So the argument against best practices is a straw man and there’s no reason that we should be reticent about adopting them. What’s really important is creating a culture of change, where “best practice” is understood to be a transient term, soon to be overtaken by something vastly better.