The ebb and flow of the best practice method is discussed in this free article by Derek Stockley. Introduced as a business management concept that gained prominence in the 1990's, the best practice approach has lost some of its initial shine. Although still featured, best practice methods are not highlighted as often as they used to be.
The rise and fall of best practice
Management theory and practice often comes in waves. One of the waves that has now subsided is the best practice concept.
I recently heard a story about a business process review unit in a government department. The unit had changed it’s name. Whilst not intentional, the name change conveyed an interesting message. The unit went from the 'Best Practice Unit' to the 'Good Practice Unit', prompting some wits to speculate as to what was next - the 'Bad Practice Unit'?
The desire to remove the 'best practice' label had unintended consequences, although it was probably done for logical reasons.
Best Practice Definition
I define best practice:
Best practice is a method where organisations identify their key business processes, and actively seek out and compare them with similar processes in organisations recognised for their exceptional customer service or outstanding business processes. The purpose of the comparison is to gather information and insight about better, more efficient and effective methods and approaches, with the view to identifying and implementing the 'best' practice/s.
The comparison can be informal, through the analysis of competitor processes or systems, or done more formally through a co-operative venture (benchmarking).
Benchmarking is one aspect of 'best practice'. The method is to form a review team and make approaches to another like minded organisation which may have a similar operation, but operate in a completely different field. For example, a furniture manufacturer may team with a glassware manufacturer to review their respective warehouse and distribution systems. The process includes the identification and setting of benchmarks.
Another method may involve an industry group or association forming a task group to review an industry wide process. The group meets with a view to developing a standard process which incorporates the best practices of a variety of member organisations. In Australia, local government bodies often develop best practice models which all local government councils can implement.
Difficulties with best practice model use
The underlying principles of the best practice model are sound. However, some problems have occurred with implementation.
Organisations have to be careful with the use of ideas gained from another organisation.
There are many factors that determine success. Organisation culture and climate often have a big impact. The success or failure of company mergers is a good example. Many mergers have failed because management under-estimated the difference in company cultures - the unwritten rules and rituals that operated outside the written policies and procedures.
Computer systems can also be stumbling blocks. As a company grows and develops, information technology systems are developed to cater for the unique features of the company’s operations. Bringing in a radical change may not be possible.
Sometimes, in their enthusiasm for the search for best practice, companies make incorrect assumptions. They do not see the forest for the trees. Our tendency in Australia to blindly follow overseas trends is an example. Australian has a unique culture which is different to other cultures. Australians react differently to some situations. They adapt well to new technology, but they resist and resent being forced. The banks learnt this lesson the hard way.
Outsourcing (the practice of hiving off non-core activities to outside companies to operate on your behalf on a contract basis) is an example of best practice method that has to be carefully scrutinised and evaluated.
Outsourcing the payroll function can be economical and beneficial. Outsourcing the complete human resources function is a completely different matter. It can be done, but it has to be done well. Normally, this is achieved through integration - the outsourced unit acts and behaves as if it belongs to the company. An analogy would be the comparison between employees engaged under an industrial award compared with someone employed under an AWA (Australian Workplace Agreement).
I have seen outsourced units lose their usefulness. Costs may have been reduced, but that is simply because company staff found an alternative - they did the work themselves. I saw this once with a records management service - staff created their own systems and ignored the central records area. The duplication would have been at a far greater overall cost to the organisation.
How to use the best practice method
The best practice methodology is like any useful management tool. It has to be used carefully and wisely, in conjunction with other management tools.
I am enthusiastic about continuous improvement. However, it cannot be used in isolation. You have to also make major breakthrough adjustments. A comparison would be the horse and buggy - continuous improvement makes the buggy better and better. The invention of the motor car is a breakthrough beyond continuous improvement.
Likewise, the best practice method is useful, but it should not be used in isolation. The transfer of good ideas and approaches has to be thoroughly tested, including the fit into the organisation culture.
Another important point is innovation. If everyone copies 'the best practice', everyone behaves in the same way. Sometimes you have to do something that is different and innovative. If you are different, you can differentiate yourself from the competition.
Is your organisation using the best practice method?
Are you using a variety of methods to improve your systems?
Are you innovative?
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