Why Best Practices are Stupid
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.