Best practices are tried and true strategies for success. Or at least, that’s what the companies that follow best practices believe: make safe choices and avoid risks by doing things the way they’ve always been done. But when does conventional wisdom become a hindrance?
“Best practices have never been anything more than a path to becoming average, according to Steven Goldbach, a principal at Deloitte, the organization’s chief strategy officer, and co-author of “Detonate: Why – and How – Corporations Must Blow Up Best Practices (And Bring a Beginner’s Mind) to Survive.” In fact, Goldbach says that mathematically speaking, if every company you compete with adopts best practices, then all of those company are average. “Best practices have never been a path to gaining advantage – at best, they were a way to stop doing things that were destroying value in your business.” He admits that in the past, following best practices could produce short-term efficiency gains, but notes that this was when change was more predictable and linear.
“We now live in a world where evidence of exponential change is showing up throughout all business systems, and sudden surprises—about new opportunities, new sources of competition, new ways of operating, etcetera —have become the new norm,” Goldbach says. But if companies continue to use these average practices, relying on wisdom that worked in the past, the danger is not just small dips in performance, but disruption. “And most importantly, by adopting past practices, we risk not adopting the practices of tomorrow that have the ability to more dramatically increase efficiency and potentially create advantage,” he explains.
Goldbach provides two examples of convention wisdom that no longer makes sense. “Why do companies force shoppers with the largest baskets – and therefore of the most value – to stand in the longest lines?” he asks. “And why do hotels force tired business travelers to wait until the middle of their workday to check in?” These are the types of we’ve-always-done-it-that-way practices that have outlived their usefulness.
Developing a beginner’s mindset
Instead of relying on conventional wisdom, companies need to view their organizations through fresh eyes. “’In the beginner’s mind there are many possibilities, but in the expert’s mind there are few’ is my favorite quote from Shunryu Suzuki,” says Geoff Tuff, a principal at Deloitte, a senior leader of the firm’s Innovation and Applied Design practices, and co-author (with Goldbach) of “Detonate.”
Disruption typically comes from outside, and Tuff says it rarely starts within an industry because the industry players tend to adhere to longstanding norms that have been framed by their own past experiences. “They literally can’t see opportunities because they have a view of the world that is constrained,” he explains. “Injecting a beginner’s mindset into a large successful organization can help it see opportunities—or more importantly, threats—that are right in front of them.”
For example, Tuff says new competitors created grocery home delivery, rental cars by the hour, and ordering a car from your phone. “While these examples tend to be from startups, there is nothing available to the startup that is not also available to established companies,” he says. “They just seem better at seeing opportunities to solve customer problems—or more likely, are willing to take action to solve them.”
Manny Medina was one of Amazon’s first employees (he was actually employee number 3), and also worked at Microsoft, where he led the mobile division from launch to $50 million in annual revenue. Medina is now the co-founder and CEO of Seattle-based Outreach, a fast-growing sales engagement platform with over 1,000 customers and over $100M in funding.
“When customer expectations permanently change, disruption occurs, and once it happens, there is no going back to the old way,” he explains. And that’s why it’s so dangerous to rely on your best practices. “When a company is doing well, they often get complacent and stop innovating,” Medina says. “It is comfortable to come into work and focus on a well-defined problem that you can just ‘zone out’ and do.” However, he advises the opposite approach. “When you are winning, that’s the time to get restless and think about what’s around the corner, what’s coming your way that you’re not thinking about,” Medina says. “The best way to control the future is to invent it.”
The business world is changing at a faster pace then ever before. “The processes and systems that we built today, or yesterday, or a few years ago are increasingly unlikely to be the processes and systems we will need tomorrow,” Tuff explains. “Therefore, we have to be increasingly willing to call sunk costs sunk and invent something new when the old stuff just isn’t fit for use anymore,” he warns, “Clinging to relics of the past isn’t the way to win in the future.”