When should I NOT use Best Practices?

As “we all know” Best Practices are techniques, methods, processes, activities, incentives or rewards that are believed to be more effective at delivering a particular outcome than any other techniques, methods, processes, etc. The general idea is that with proper processes, checks, and testing, a desired outcome can be delivered with fewer problems and unforeseen complications.

I find it somewhat problematic to buy into the term “Best Practice” as the term has implications of generality and universality applicability. I sense that some universal source has settled all disputes and the matter is closed decided, set and resolved. In addition, because of the wide spread use of best practice as a buzzword, I’ve found it easier and more precise to use this term or sometimes “better practices”, or “current thinking in the industry”. At least these terms may imply that the practices are not universal, but depends on the specific situation.

For deciding when to apply best practices, I have found it to consider two axes:

  • External service provider vs. Internal service provider
  • Degree of reward for differentiation (doing business significantly different from your competitors has a high return and lies within your expertise – or at least it should)

This creates a matrix with four quadrants.

Q1: The first quadrant describes the sitation where differentiation pays off and the services and competence is contained within the company, i.e. produced internally. This is typically where your core business is and where most of your competence and effort should be built around. I see no reason for applying Best Practices here. You should probably go for “best in class”.

Q2: The second quadrant describes a situation where differentiation pays off, but the service is produced outside your company. Here’s where you rely on close partnerships and probably some kind of shared rewards.

Q3: The third quadrant describes a situation where differentiation doesn’t have a significant benefit (your aim should be that it is “good enough”) and often where work processes are standardized, volumes high and economies of scale significant. Here’s where you give it to someone who makes a living from doing this kind of work as efficiently as possible.

Q4: The fourth quadrant describes a situation where differentiation doesn’t pay off, but for some reason the services are produced internally. This could be because of regulatory issues (e.g. safety or social responsibilities) or for historic reasons (e.g. a lot of competence in this area). I have found this situation to be generally “unstable” and tend to die out.

By mapping your business functions or processes in this matrix, I believe you can easily sort out where to focus your effort. A humorous friend of mine once said, let’s not become the  “United States of Generica”. I tend to agree, especially now that you know how to consider when to use Best Practices…

Regards,
Kevin

Strategy well defined – is it really necessary?

People older and wiser than I am, have tried to define what the term strategy means in todays business. I even have to admit that some of these definitions, are quite good. Yet they all seem to bring in ONE aspect or application og strategy and none of these seem to be comprehensive.

Somehow, I find that strategy is ultimately about making choices, and so, you I have found that you easily detect if a strategy is really a strategy by posing the question:

By applying this strategy, what have you chosen NOT to do?

When asking this simple question, I have found that a lot of strategies are not more than a collection of nice words which doesn’t provide any real direction. I find this situation sad, as in my experience a strategy is important to most organizations – but only when the strategy is made relevant.

Etymology – back to the roots

According to wiktionary.com, the word strategy is derived from two ancient Greek words – “stratos” and “ago”. “Stratos” indicates some kind of military activity (“army”) and “ago” carries with it some form of guidance or leadership (“to lead, to conduct”).

In my experience the image of successful strategy as winning a battle is a widespread notion. However, I find that winning over competition is merely ONE aspect of strategy. It also raises important questions such as; WHO are we fighting and WHO are your allies.

An excellent framework: Process, content and context
In exploring this area I happened to stumble on the brilliant book “Strategy Process, Content, Context an international perspective” by Bob de Wit and Ron Meyer. As opposed to other books on the topic who take a stand and state their view on the topic of strategy, de Wit and Meyer have put on display a collection of well known and well written articles from renowned academics and other subject experts. But collecting these articles is not by a long shot what makes De Wit & Meyer’s book so important. Their systematic and comprehensive framework makes the essence of each article stand out clearly clear. It also makes you aware of the assumptions, weaknesses and shortcomings, but most of all your own biases and inclinations. This is in fact what I found most fascinating about the book.

De Wit & Meyer’s framework in a nutshell

De Wit and Meyer have divided it into three sections:

Process – The processes of strategy is constituted by the strategic formation (how the strategy came about) and implementation (how you ensure it is rolled out in the organization) and views on strategic thinking (your mental model when approaching strategy)

Content – the content of strategies as seen from BU level, corporate level (these two looking at the firm) and network level (taking a broader view – the system)

Context – the context in which the strategy is formed – is this in the view of the industry context, the organizational context or the international context

There is also a short chapter on organizational purpose which is worth a read-through, but it is not the core of the books message.

Within each chapter there are 4 parts:

  1. The Issue – describing the issues contained in this part of the framework
  2. The Paradox – describing the apparent paradox
  3. The Perspectives – a summary of what are the different perspectives are
  4. The Articles – relevant articles describing one perspective in further detail

Concluding remarks
As you may have discovered by now, I am quite excited about this framework as it gives a good understanding of the different aspects of strategy. This for two reasons:

  1. This is very helpful to make conscious choices about the aspects you need when creating or analyzing any strategy
  2. It gives clarity as to what aspect of strategy you are addressing in any discussion.

For me this framework has proven clear enough to be useful and still open enough not constrict the content of the strategy or its general applicability. So, if I have to choose I would rather have a:

well defined strategy, than strategy well defined.

Further blogging
In the future, I have intentions of writing about each paradox on this blog, but I cannot guarantee that I will write in any given order. However, promise that I will return and stay true to the structure of the book.

Please let give me feedback on this blog. I am always ready to listen, review and learn.

Best regards,
Kevin Faber