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Friday, November 17, 2020

Industry Worst Practice

Forget industry best practice. It’s a waste of time if you want any kind of advantage in the marketplace. All this imitation merely encourages sameness and creates mediocrity. Most companies are full of creative people and innovative ideas, yet they are ignored in favor of following the crowd. Slow down, think for yourself, and take a few real risks. Who knows, this time luck may be on your side.


Don’t waste your time seeking out—let alone following—so-called “industry best practice.” It may be a constant mantra of management consultants and certain business schools, but just a little reflection will prove that it has little to recommend it.

For a start, whatever the “best practice” may be, it is already in use, probably by many organizations. That means it offers no competitive advantage. How can it, when others are already following an identical approach, and many more—persuaded by all those eager consultants—are jumping on the same bandwagon every week? At best, following industry best practice is a catch-up exercise; at worst (which it frequently is), it becomes the mindless imitation of fashionable fads and fancies. No one ever gained an advantage by imitation.

What those consultants and writers describe is usually not what the firms in question actually did. It’s a sanitized, cleaned-up, and carefully reorganized version of events, based on hindsight. That’s why it usually sounds so simple and easy to follow. In describing their own success, organizations, their leaders, and their PR consultants, leave out all the messy parts, especially any that might indicate false starts, mistakes, and misunderstandings. They tidy away embarrassing mis-steps and smooth over disagreements and changes of plan mid-way through the process. What emerges isn’t what they really did, or thought, or understood at the time. It’s what an extremely friendly and partisan writer imagines that they would have done—if only they hadn’t been quite so uncertain that it would even work.

It’s well known that nearly all the companies extravagantly praised in best-selling business books quickly crash and burn. The reason is simple. Most of what they did right was due to luck . . . and their luck ran out.
Have you ever noticed how nobody ever says something like: “We set out with one idea, kept changing it because it didn’t work, and were just about to give it up altogether, when someone—we can’t recall quite who—started a totally crazy course of action in desperation. And then—we have no idea how—it suddenly worked amazingly well. What was our secret? Hell, we were just lucky!” That would be a more truthful explanation of the start of most industry changes than the neat explanations which (so conveniently) trace the cause of success to the outstanding ability of the guys at the top. It’s well known that nearly all the companies extravagantly praised in best-selling business books quickly crash and burn. The reason is simple. Most of what they did right was due to luck . . . and their luck ran out.

Life changes, circumstances change, public opinion changes. What worked so well in yesterday’s world becomes a liability in today’s . . . and a recipe for disaster in tomorrow’s. The strongest argument of all for ignoring industry best practice is simple: it is yesterday’s idea that was successful in yesterday’s context. What makes you think it will be anywhere near as good today or tomorrow? Unless your situation and circumstance are totally static—which is pretty near impossible over more than a few days—things will already have changed, possibly in quite significant ways.

There is a clear, simple, and readily available alternative to industry best practice. It is called thinking for yourself, and it works by using the imagination, insight, and ideas kept locked in the heads of people in the organization.
There is a clear, simple, and readily available alternative to industry best practice. It is called thinking for yourself, and it works by using the imagination, insight, and ideas kept locked in the heads of people in the organization. They are locked up there because they are typically ignored, underrated, or dismissed in favor of imitating supposedly proven success elsewhere. Best of all, this approach is free; and those who have the ideas that you need will be overjoyed to share all that they have.

Why do leaders persist in choosing industry best practice over using their own organization’s imagination and creativity? Fear, mostly. The fear of taking a risk. The fear of being wrong. The fear of being held accountable. Business leaders like to be seen as courageous risk-takers, but most of them are as timid as a church mouse when it comes to doing anything different than their peers in other companies. That’s why most preside over mediocre businesses with mediocre profits and mediocre products. Imitation feels safe because you never stand out enough to attract criticism. Sadly, your results will never stand out either.

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12 Comments:

Ian said...

Hi Carmine,

I was particularly interested in what you said about the following of "best practice" offering no competitive advantage because everyone is (trying to be) doing the same thing!

Your assumption here seems to be that implementers of best industry practices are trying to apply them across the board within an enterprise. If this is the case, then I would not only agree with you, but be tempted go further, and assert that it would introduce blandness and lack of diversity into the business world.

However, most businesses that are enjoying a measure of success will contain some areas where they outperform their competitors, some where they are about average, and some where they fall short. Thus, surely the right way to make use of best practices in the real world is to apply them judiciously to areas of the business which are underperforming, while leaving the outperforming areas well alone!

This is how certain ERP software vendors implement their products in their customers’ businesses. They start from the premise that their software embodies best practices across your industry, and thus you need to customise your business to use the software's processes, rather than the other way around. However, they look for "the couple of areas" where your business is outperforming the rest of the industry, and they then customise those parts of the software to support it.

I hope that works for their customers, and for them…

4:15 AM  
Carmine Coyote said...

Thanks for your comment, Ian.

I understand your point, but I would still argue that applying "best practice" in underperforming areas is merely playing catch-up—and, in your example, comfirming that you have little interest in that part of the business.

If that is so, why bother with it anyway?

Imitating others can only lead to blandness and sameness, whatever the motive. If part of your business is underperforming, either make it better that the competition, or drop it altogether as a waste of your time and resources.

I know this sounds hard, but many businesses are weighed down with segments that neither do well, nor are important enough to the business as a whole for anyone to be sufficiently interested to make them more than "good enough." They would be better off without them.

Keep reading, my friend.

8:03 AM  
Brendan O'Malley said...

Hi Carmine,

The most important thing you say in your article is that business leaders must learn to think for themselves and be rightly suspicious of people trying to sell them the latest management fad.

However, that doesn't mean they should be blinkered and inward-looking. While it is true that most companies ignore the potential of ideas from employees, customers and suppliers, it is also true that they often miss opportunities they could have seen by knowing more about what other companies are up to. It's not so much a question of copying as gaining insights by watching what they're up to.

Real competitive advantage comes from building strategies around original and creative insights. Sometimes these come from within, sometimes from the wider world outside.

You've got to keep looking!

6:14 AM  
Brendan O'Malley said...

Hi Carmine,

The most important thing you say in your article is that business leaders must learn to think for themselves and be rightly suspicious of people trying to sell them the latest management fad.

However, that doesn't mean they should be blinkered and inward-looking. While it is true that most companies ignore the potential of ideas from employees, customers and suppliers, it is also true that they often miss opportunities they could have seen by knowing more about what other companies are up to. It's not so much a question of copying as gaining insights by watching what they're up to.

Real competitive advantage comes from building strategies around original and creative insights. Sometimes these come from within, sometimes from the wider world outside.

You've got to keep looking!

6:17 AM  
Brendan O'Malley said...

Hi Carmine,

The most important thing you say in your article is that business leaders must learn to think for themselves and be rightly suspicious of people trying to sell them the latest management fad.

However, that doesn't mean they should be blinkered and inward-looking. While it is true that most companies ignore the potential of ideas from employees, customers and suppliers, it is also true that they often miss opportunities they could have seen by knowing more about what other companies are up to. It's not so much a question of copying as gaining insights by watching what they're up to.

Real competitive advantage comes from building strategies around original and creative insights. Sometimes these come from within, sometimes from the wider world outside.

You've got to keep looking!

6:18 AM  
Abhishek Baheti said...

Hi Carmine,

Agree about best practice offering no competitive advantage but at least sets standardization which in the common parlance by IT vendors is called best industry practice.

I would think companies need to go about adhering to standardization to make globalization seem simpler and controllable by the Leader (or Managers).

However, it’s the business secrets that offer Company with competitive edge/advantage. I believe surprisingly these secrets are more often than not in the heads of people who run the organization. Which when not transitioned effectively costs the organization to crash and burn.

What I believe is that the organization is still run by people and process is there to help and make life simple for them.

These are my views....

Cheers.
Abhishek
+91-9819098111

6:42 AM  
Carmine Coyote said...

Thanks for your comment, Brendan.

I agree with you. I doesn't matter where the creative ideas come from (so long as they aren't stolen), just as long as they are used.

My point is that the simplest, and often the best, source of such ideas is from the heads of your own staff. Sadly, that is too often ignored in favor of imitating what others have done.

Keep reading, my friend.

8:30 AM  
Carmine Coyote said...

Thanks for commenting, Abhishek.

I am not sure (at least in my mind) that "industry best practice" and standardization are the same. One is following agreed (usually technical) standards to make interactions easier. The other is imitating what supposed industry leaders have done, mostly in areas where standardization does not apply, such as marketing, payment structures, advertising approaches, and pricing.

Standardization comes from open agreement. Imitation is usually covert and done with no agreement from the group being imitated.

Keep reading!

8:37 AM  
Tom Harris said...

Hi Carmine,

Taking an extreme position again to make a point?

Yes, blind imitation of others can stifle using internal creativity. And you're right on the mark that most "best practice" is actually fictional "better than best" -- sanitized for external publication.

But at the same time, one way of learning is by imitation. And ignoring how someone else does it better, in favor of just thinking for yourself is reinventing the wheel unnecessarily.

Further, given that those publicizing the "best practice" may actually not be practicing it themselves, one might yet gain competitive advantage -- surprise everyone by really walking others' talk.

I would rather call it "best known practice". Then each company or group should think for itself -- consider the "best known practice" and compare it with what they themselves can brainstorm. Then try both and see which comes out better for them.

- Tom

1:14 AM  
Carmine Coyote said...

Thanks for your comment, Tom.

I think I would draw a distinction between "learning from what others have done" (or say they have done) and "imitation."

Learning from others, as you so rightly say, can be a wise move. But it only involves seeing what they are doing and using that to fuel your own thoughts. Imitation implies action: copying what others have done. That's what I'm unsure about.

What I am definitely trying to turn people against is doing what others have done without thinking about it: blind imitation, that is, as a substitute for thinking yourself. I'm certainly not in favour of reinventing every wheel, but some wheels may turn out to be poor ones that need some reinventing to make them work properly.

Thanks for making me clarify my own thinking on this. I'm grateful.

Keep reading, my friend.

8:08 AM  
Abhishek Baheti said...

Hi Carmine,

Agree with you to certain extent. Imitation exist for the pure reason no one wants to reinvent the wheel and also not take chances, for the fear what if they fail. So less creativity and less innovation and hence same growth prospects. Whereas leaders that innovate and challenge industry standards tend to be go either ways...extremely successful (rewriting industry best practice) or extreme failure (out of job).

I think this innovation also come with people living in developing countries and tend to work around the government policies and with more scope of experimenting and then lending these ideas across the global village, making innovation happen. Also in Developed countries when growth hits roof top, innovation is the only way of rescue.

This is my personal belief, you may beg to differ.

Regards,
Abhishek

11:34 PM  
Carmine Coyote said...

Thanks for your comment, Abhisek.

Yes, some innovation goes wrong. Never mind. Just start again.

Innovation can arise anywhere — developing countries as easily as those with highly-developed economies. The trick is to allow it to grow, regardless of where it started.

Keep reading, my friend.

8:23 AM  

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