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Tip of the Week: Why You Should Reconsider Your Best Practices

Tip of the Week: Why You Should Reconsider Your Best Practices

The term “best practice” has been used by businesses for years to describe the optimal way of performing a particular task. However, before fully adopting them into business operations, it is important for these practices to be examined and deemed to be beneficial to an individual company’s circumstances. If they are not, a company risks much by adopting a misplaced best practice.

The major problem is that “best practices,” while useful if applied properly, is a term that has largely become a buzzword for businesses to use in their communications. This is dangerous, as there is a lot put at stake based on the term “best practice” alone. Therefore, it is crucial that so-called best practices are reviewed and examined before a business puts strategies based on these practices into place.

This was the argument made by Professor Freek Vermeulen in his recent book, Breaking Bad Habits: Defy Industry Norms and Reinvigorate Your Business. An interview with the Harvard Business Review allowed him to discuss the phenomenon further.

To provide an example of how best practices may not always be of a business’ best interest to follow, Vermeulen discussed a South African bank called Capitec and how they relied on reverse benchmarking to identify how to become an outlier in their industry.

The practice of reverse benchmarking can be summed up as the process of examining how one’s industry typically operates in order to identity weak spots in accepted practices and improve internal business operations. This can often lead to the abandonment of what is considered the status quo, if not heavily modifying it.

Capitec’s examinations revealed that other banks in South Africa had a tendency to close at four o’clock in the afternoon. To abandon this status quo, industry-standard practice, Capitec not only extended their hours to enable those who worked during the day to see to their banking needs once their work day was over, they even implemented Saturday hours in many of their branches. As a result, Capitec has since carved out a healthy market share for themselves.

This account is just one example that shows how what is standard practice might not be what is best for the business following it. However, many businesses give some push back when directly asked why they follow the practices they follow. These businesses often will respond with some statement that essentially says “this is what is comfortable” or “this is how it has always been done.” These answers are a good sign that, according to Vermeulen, an organization needs to run a self-audit to determine if they are enacting practices because they benefit the organization, or if they are simply resisting change.

Furthermore, there is the risk inherent in assuming that something that made a business successful is automatically a best practice. As Vermeulen mentioned in his interview, many companies who have reached the top may have simply been lucky as they enacted risk-laden strategies, and most of the companies who tried similar strategies have long since failed and been forgotten.

Of course, changing established practices and patterns is not easy for businesses to do. Vermeulen notes this, stating that many companies will hold out until they have no choice but to make a change. This is usually done at the point where their profits and productivity take a hit. However, waiting until this point often makes change more difficult for these companies. According to Vermeulen, the key to avoiding unnecessary difficulty is simple: “Be proactive.”

By taking the opportunity to audit your business practices before your company is stuck in a life or death situation, you can more clearly see where your company is weakest. Better yet, you will be able to remedy these weaknesses before your company is at risk.

Computerware can help you evaluate your IT solutions to ensure that they are not contributing to any weaknesses that your company may suffer from. Call us at (703) 821-8200 for more information.

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Saturday, 21 April 2018

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