It’s human nature to compare your own performance with that of others, so using the performance of other firms as a benchmark for rating your firm’s performance would seem to make sense. Once you know the benchmark performance, you certainly want to know what processes, procedures or methodologies produced those results. When you have them adequately documented, you call them "best practices," regardless of whether or not they are in fact "best." If you replicate them, you’ll probably achieve the same benchmark performance.
That sequence of events is being done every day. We consultants, and most of our clients, love benchmarking and best practices. It doesn’t take a lot of thought and imagination, it’s comfortable, it doesn’t take a genius to do it, and sometimes it may even work. That can’t be all bad! Or could it? Sure, it could!
First, and perhaps foremost, benchmarking and best practices don’t take the corporate personality and the management style of the firm’s leaders into account. What might work at one firm may be a complete failure at another. What worked for General Electric may not work for your enterprise. And keep in mind it’s not only the corporate personality that counts. Each individual function also has a personality and its best practice must be compatible with those of other functions.
Best practices don’t address the individual firm and its market, products, distribution channels and competitive position. Best practice for the market leader may be a long way from best practice for a minor player. A major customer can get concessions, such as demanding that a supplier stock just-in-time inventory, that minor customers can’t get. Some best practices only work when you have some clout with your suppliers. Best practices differ when relationships differ!
Did the best practice actually cause the results? Sure, the numbers can’t lie, but what caused them? GE points to Six Sigma, but the success story at GE preceded Six Sigma by years. Stellar performance resulted from GE management setting tough performance standards for its divisions and divesting those that didn’t perform. As a matter of fact, GE’s more recent performance, Six Sigma or no, has declined significantly.
Finally, the best practice doesn’t give your firm any advantage, even if it really led to benchmarked success. You’ll only get as good as the other guy, and what good is that? The key to business success is to create and institute the best practices as they relate to your specific firm and its situation. What works for Ford doesn’t work for Chrysler and vice versa.
And that’s the heart of the matter. Best practice is situation-specific. Even if it is the cause for another firm’s improved performanceand it may not beit is unlikely to work for you, even though the situation may appear to be similar.
Plagiarizing what is "best" for another firm is not likely to accomplish much for yours. The real answer is to determine the best performance for your firm and your situation and devise a plan for getting there, not to try to replicate the successes of others. What’s best for you is likely to be something a lot different from what’s best for others.
As a matter of fact, it ought to be! Look to your own operations. What could or should you be doing to raise quality, cut costs and improve service to your customers? Use your intellect, talent, and imagination to create a real best practice that matches your needs!
