Why Best Practices are Stupid

January 5, 2010  

The other day I saw this  video of Tom Peters from 2007.  He contends that “benchmarking is stupid.”  It is a good video that is worth watching.

While watching this, I couldn’t help but reflect back to back to the year 2000, when I started penning my first book, “24/7 Innovation.”  The first paragraph of the first chapter was:

I play golf — not well, but I play golf. My handicap is in double digits. For me to shoot par would be a dream. But for Tiger Woods, par would be a nightmare. I am reminded of this comparison when I see companies that are satisfied to focus on their understanding of “par,” otherwise known as best practice. It was once an admirable aim, but is not sufficient today. Your competitors are more like Tiger Woods than they are like me. Par won’t keep you alive in the current environment.

Smart businesses are learning to push farther. They know that best practice will not get them where they want to be. Not so long ago, it was possible for a company to set the industry standard or best practice, then sit back and watch weaker rivals try to catch up. But businesses are now in a greater state of flux than ever before in the history of commerce. Global competition has reached a stage where no sooner has one firm achieved excellence than so too have its imitative rivals. The only way a company can hope to stay ahead now is by being continuously entrepreneurial and innovative, by creating processes and capabilities that allow innovation to flourish and become a core strength. Only then is it possible to escape from the game of follow-the-leader, of shooting for par.

However, having said that, I am not against best practices altogether.  I am just against them as your innovation strategy.  In particular, best practices are not useful for defining your “differentiating” capabilities.

In my 2007 article on “Innovation Targeting,” I discuss why best practices are actually ideal for core (and sometimes support) capabilities.  These are part of the business that are important to the customer but do not set you apart in the marketplace.  You want these to run like a well-oiled machine.  High quality, low cost.  But differentiating capabilities must help you stand out in a crowded marketplace.

I discuss this concept in this 10 minute presentation (in Malaysia) where I use a very simple example.

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4 Responses to “Why Best Practices are Stupid”

  1. Ivana Sendecka on January 5th, 2010 12:02 pm

    Hi Steve,
    thanks for the post!
    I am having “upset stomach” when hearing term : best practices as I just find it too old fashioned, out dated and it still serves like a crunches for not adaptable executives in order to impress their subordinates with such a flashy terminology. *( well, it still perfectly works in Slovakia..)

    Indeed, the only way how to leave a track in the world out there, is to be aware of what is going on out there and to be really flexible, listen a lot to the voices of your own people as well as customers etc. Nowadays technology is giving us tremendous possibilities to engage every stakeholder into innovation process.

    Gosh, I just wish someone from corporate world would be willing to hear out the voices of “digital generation” folks with all the ideas cooking in the heads..
    I could carry on, till tomorrow, but I guess this is just a comment space;-)
    So, keep up the great work.
    See you around;-)

  2. uberVU - social comments on January 5th, 2010 3:19 pm

    Social comments and analytics for this post…

    This post was mentioned on Twitter by stephenshapiro: Why Best Practices are Stupid (and Tom Peters agrees) – article and videos: http://bit.ly/85bHc5

  3. Graham Horton on January 5th, 2010 3:57 pm

    I absolutely agree!

    Using benchmarking as an innovation strategy would be like “skating to where the puck is, instead of where it’s going to be”, to borrow (and reverse) the well-known quote by Wayne Gretzky.

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