The Fallacy of “Industry Best Practice”

From the Bull | For many years I have heard people in business talk about industry best practice and expound on it as if it is some sort of Holy Grail. That, if you adopt it in your business, it will lead you to a business nirvana. This is a fallacy. In reality it’s just another vague business “buzz” word.

The problem is that “best” is a subjective term and open to interpretation. It’s really just someone’s opinion. Talk to 10 different experts and you’re likely to get 10 different versions of what an industry’s best practice is, depending on what they’re peddling. In any event what if your main industry competitors (and leaders) weren’t all that good to start with? Why would you want to benchmark yourself against that? Or adopt their practices?

Great companies seek to learn from the best but make sure that they retain the uniqueness that compels customers to buy from them. They also have a genuine desire to improve themselves. They do this by studying what their competitors are doing well (and badly). They also know their industries inside-out.

But this is only their starting point. They know that their industry will only provide some of the answers they need and that they have to dig deeper, and go wider, than this for information if they want to get the best results possible.

They aspire to gain knowledge from people and businesses that operate far outside their market-place or industry sector. They look outside as a way to shake up thinking, challenge old behaviours and to gain a wider perspective knowing that it will ultimately lead to better decisions being made.

Intuitively, they know that the strategies and practices that are standard in one industry can be revolutionary when applied in another.

There are many examples of this occurring. One that comes to mind is McDonalds who brought what was standard operating procedure (mass production and labour specialisation) in the car making industry and incredibly adapted it to the low-rent business of cooking hamburgers and fries on a large scale. Without this radical initiative which allowed them to create a replicable franchise-based business model McDonalds would never have been able to grow to over 31,000 restaurants globally. In hindsight it sounds like a simple, logical idea but at the time it was a game-changing event not just for McDonalds but for the fast-food sector in general.

Next time someone starts spouting off about “industry best practice” consider what they are saying in the context of your own business. Is it “best” for your business? Will it differentiate you or clone you on your competitors? Will it move you towards your longer term goals or be a distraction to your efforts?

Whatever else, take a balanced view and look far and wide for the answers. The key is to see and exploit the opportunities that your competitors don’t see. These are never obvious and that’s why you won’t find them if you’re focused inwards or are too busy worrying about someone else’s view of “industry best practices”.

The great ideas are out there but like McDonalds discovered they might be where you least expect to find them…