Hunting for "Best Practices"

A lot is written about benchmarking as a vehicle for identifying best practices. Clearly the two are related, but sometimes too much weight is given to the connection.

The temptation is to look to high performing companies, make a laundry list of what they are doing, and then go try to emulate that. The presumption being that most of what they are doing qualifies as "best practice." In reality, what is often taking place at leading companies is a mix of three things:

1. Basic or core operating practices ("blocking and tackling") that are simply executed at a level better than most.

2. An effective "operating model" within which these practices reside.

3. True "best practices," of the innovative and breakthrough variety.

The first two categories are clearly important, and in some cases more important than the latter, because without those foundational aspects, all the best practices in the world will yield little incremental value. But assuming those are in place, true "best practices" are clearly the next place to look for innovation. The challenge is knowing what to look for.

When you invest in activities geared toward identifying these types of best practices (conferences, benchmarking studies, consulting projects, etc.), it's important to have a set of standards on which to base your return on that investment. For a best practice to pass the "innovation" test, it must deliver some level of insight that goes beyond just doing the same things better. I offer the following as a checklist for assessing whether a specific practice passes this type of sniff test:

1. Is it definable?

Best practices are not general philosophies (e.g., "better management of risk"), but rather specific changes to process, technology, organization, policy, or operating protocol. And it refers to a specific "change" from current state, typically involving something you will either add (start doing) or subtract (stop doing) . Sometimes it's a new process or technology all together. But defining it requires being specific.

2. Is it unique?

Is this a practice you are likely to find most everywhere you go, just implemented at different levels of effectiveness? There is nothing wrong with focusing on better execution/implementation of core business practices as a driver of performance, but you are better off calling it what it is – an implementation breakdown – rather than disguising the issue as failure to have a particular practice or policy that the organization knows is already in place in some way, shape or form. Otherwise, you'll be met with "this is just more of the same."

3. Is it breakthrough?

Does the change in practice or policy create a step level change in result of a business process? Generally I look for a 10 times payback in a relatively short horizon, and at least a 50% change in current performance level to the affected business process. But these standards can vary from company to company. But we are not talking 1 or 2% – but something of material significance. A small standard business case worksheet can help your employees do their own internal "sniff test" before consuming your time in analyzing the myriad of small ticket changes.

4. Leading edge or "bleeding edge"?

Often, it is our temptation to look at the coolest technology or system and proclaim it to be a best practice. Most of these are untested at best, and looking for "test dummies" to try themselves out on. Find companies that have implemented it, look at the business cases they used to justify it, and then look at how much of that actually materialized.

5. Is it actionable?

My test for "actionable" is usually that it can be adopted (fully implemented) inside of a 1-3 year timeframe. Otherwise, you're adding new R&D into the pipeline. R&D is fine, but don't let theoretical or speculative projects clutter up your best practices pipeline. Focus on things that you can quickly assign ownership to, and things you can get on with rather quickly.

6. Can I attach value?

Most importantly, can you attach dollars and a specific budget location to the achievement of implementation? And will someone "sign up" for that commitment? E.g., if I implement xyz, how many bodies go away, or how much money will I save, and when? If you can't answer those questions, we're probably not talking about a credible "best practice."

Look, there is nothing wrong with focusing on doing the basics better. Or having a better operating philosophy or business model. You need those elements to run the business. But when we talk about BEST practices, we are generally talking about doing something unique and different. And without that component to business improvement, it's unlikely that you will get to or remain at a leading edge level of performance.

So make sure you have true best practices in your pipeline, and use these tests to make sure they pass the proverbial "sniff test."

Author: Bob Champagne - UMS Group, Inc., a privately held international management consulting organization specializing in Performance Management tools, systems, and solutions. Included in UMS Group's product portfolio are a wide variety of performance tracking, reporting, and benchmarking solutions, as well as customized performance assessments and diagnostic services. UMS Group has consulted with hundreds of companies across numerous industries and geographies. Visit UMS Group at http://www.umsgroup.com or contact us directly at +1 973.335.3555.