Therefore Strategic Technology Services

Friday, 29 March 2013

Best Practice and beyond


What is a Best Practice?

Over the last decade, there has been a great deal of emphasis placed on the benefits of embracing “Best Practices”. This has largely been driven by the prevalence of Quality Management Systems such as such as ISO 9000 and ISO 14001, and the implementation of best practices based ERP systems.

In short, best practices are methods or techniques that have consistently shown results superior to those achieved by other means. A best practice can evolve to become “better” as improvements are discovered.

Does one size always fit all?

Best practice is considered by some as a business buzzword, used to describe the process of developing and following a standard way of doing things that multiple organizations can use. Some consulting firms specialize in the area of best practice and offer pre-made “templates” to standardize business processes.

However, following the template driven application of best practices can be to your disadvantage.

Contextual Practice … beyond Best Practice

Sometimes a recognized best practice is inappropriate for a particular organization’s needs. The phrase “Contextual Practice” is often used where companies have elected not to follow a best practice and have decided that, given their context, a practice of their own design is considered to be more appropriate for gaining market advantage.

A key strategic talent required when doing business process design, is to decide when to follow best practice and when to follow contextual practice. As a guiding principle, only implement contextual practice after conducting a strategic review that clearly indicates that it is desirable to deviate from best practice.

When do you embrace a contextual practice?

Consider a scenario where all players in a particular industry strictly follow the same set of best practices. This scenario would lead to there being very little differentiation between the service or product offering of the market players under question. Should these players start implementing contextual practices, the player most effective in doing so would prosper, whereas the player that is least effective in doing so would start to lose competitive ground. Typically, a contextual practice should have as its endpoint the attainment of a Sustainable Competitive Advantage (SCA), a Unique Selling Proposition (USP) or both.

Ultimately, when considering deviation from a best practice, ask yourself the following questions:
  1. Will this contextual practice lead to a SCA, a USP or both?
  2. Will this contextual practice be future proofed into the medium and long terms?
  3. Will this contextual practice give me an advantage relative to my competitors?
If the above questions do not check out in the affirmative, it would be best to consider staying in the realm of best practice.

Your change management culture should be aware of best and contextual practices, as the change management process can constitute a gatekeeper to prevent suboptimal practices from taking root.

Contextual practices don’t last forever!

Bear in mind that should you implement a contextual practice that does indeed translate into a SCA or USP, the more astute amongst your competitors will rapidly emulate you. It is therefore imperative that you implement your contextual practices effectively so that you can derive the maximum advantage before your competitors catch up.

The reality stands that best practices are not static. Today’s contextual practice that provides true advantage will by definition be tomorrow’s best practice.

When implementing a contextual practice, pay attention to any barriers that you can use that will make it more difficult for your competitors to catch up with you.

Remember that, when implementing what you believe to be a contextual practice, if you get it wrong, you are actually implementing a bad practice. Monitor contextual practices carefully post implementation.

Cutting through the noise in a best practices world

Typically, most of a business’s practices should be best practices with relatively few contextual practices in play.

The contextual practices that a business engages with give it it’s “personality” and differentiate it from it's competitors. Given the key role that contextual practices play in providing a foundation for the development of a corporate personality, it is imperative that contextual practices are well chosen, offer value and are, as far as possible, sustainable.

Contextual practices often constitute the foundation stone for the development of a long-term marketing strategy.

Are all of our practices best practices?

Over time, bad practices tend to take root, either because of poor decision-making or because of the failure to keep up with the ever-shifting sands of best practice. All told, best practice is not constant and is continually changing as the environment shifts.

It is the function of management to continually evaluate the practices in play and ensure that bad practices are replaced, either by best or, less frequently, contextual practices. A well run Quality Management System as well as a culture of mandating staff to act against poor practice will be key to ensuring success.

How do I determine what constitutes a best practice?

Implementing best practices is “more easily said than done”. There is typically no definitive textbook available to guide you through the process. Best practice is often a matter of opinion and therefore needs careful evaluation prior to implementation. Some ideas that may be worth considering follow:
  1. Many Consultants and business Academics have carved out a niche in this area. Engage only those that have a proven track record.
  2. Consider implementing a best practices ERP system, and critically assess any requests for deviation from the system’s “vanilla” state.
  3. Bring in fresh talent. A new set of eyes will identify deep-rooted poor practices more easily.
  4. Engage in strategic conversation that centres on evaluating the effectiveness of your business’ practices.
  5. Implement a Quality Management System.
  6. Implement a Business Process Management Suite, such as the Therefore Quantum™ BPMS (www.therefore.co.za/quantum), to allow you to continually monitor the effectiveness of your business’ practices.
  7. There are aspects of best practice that are documented, such as good agricultural practices, good manufacturing practice, good laboratory practice, good labour practice, good clinical practice, good warehouse practice and good distribution practice. It makes sense to use published standards as a starting point.

If in doubt, ask your Customers.

As a guiding principle, businesses exist to provide goods or services to their chosen markets. The practices that they utilize therefore have as their endpoint the need to maximize the value that they offer their customers, both existing and future. If in doubt, ask your Customers what they are expecting from you. Effective customer interaction will allow you to identify bad practices and to uncover potential contextual practices that could give you a competitive advantage.

A useful strategic tool to utilize when canvassing the opinion of customers is a Moments of Reality evaluation. More detail to follow in a subsequent article.

Legal Compliance

I have an admission to make. I am a committed believer in the free market and feel strongly that Government intervention in the economy should be limited to providing an environment that is conducive to business. Governmental best practice should minimize the legislative baggage and red tape that business has to navigate.

The only deviation that a Government should make to best practice should be in the direction of implementing contextual practices that benefits the economy, particularly when viewed with reference to the global economic stage.

Governments frequently get it wrong when they implement what they see as contextual practices, and as a result land up implementing bad practices. The propensity for this behaviour is typically the consequence of the absence of a long-term strategic view, fuelled by the need to implement electorate friendly policies in the face of relatively short electoral cycles.
The long and the short of it, is that Governments frequently implement legislation that may stand against your ability to engage with globally accepted best practice. None the less, in the absence of an alternative, it may on occasion be necessary to abandon best practice in favour of legislated practice.

It makes sense that you continually review your practices to ensure that you are not falling foul of legislated practice and to actively campaign against poor policy decisions made by Government.

Learning from Government Future Proofing contextual practice

In all fairness, the inability to implement well-considered contextual practices, given the inability to work based on a mature medium to long-term strategic view, is not a failing that is in the sole preserve of Government.  Business is often prone to the same failing.

For business, it is often difficult to see beyond the next financial year-end, which is a far shorter time span than the duration of an electoral cycle. The difference is, Government is a big ship, and it turns far more slowly than a business, which is smaller and therefore more agile.

The important observation is that it is critical that contextual practices be future proofed beyond the short term. The longer the term over which you can future proof a contextual practice, the better.

What is a Turnaround Strategy?

Reviving a business that has hit upon hard times tends to be hard work. The most difficult aspect of implementing a Turnaround Strategy is often establishing a framework that allows you to see the wood from the trees. The following practices-based road-map may well add some value to a Turnaround strategy:
  1. Identify the business’ core practices.
  2. Identify those practices that are subject to legislated practice and ensure that you comply.
  3. Identify bad practices and ensure that your Turnaround Strategy contains a road-map that shifts them towards best practice.
  4. Understand the market in which the business operates.
  5. Select your targeted Unique Selling Propositions and Sustainable Competitive Advantages.
  6. Implement contextual practices that support your targeted Unique Selling Propositions and Sustainable Competitive Advantages.

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