Quick Take: Rethinking best practices

What’s the fastest way to scrap innovation and commit to mediocrity? Copy other companies.

Best practices are insanity

Albert Einstein reportedly said: “Insanity is doing the same thing over and over again and expecting different results.” When it comes to best practices, distributors are certifiably insane. Why? Because best practices are copying. Adopting best practices for digital transformation is paving cow paths, not innovating. Disruptors win by finding frictions, offering better methods, and displacing incumbents. Distributors, as incumbents, cannot copy their way to defeating disruption. Best practices may have been a useful tool when there were no other games in town, but not anymore. Using best practices over, and over, and over again will not yield different results. Copying is lazy. Best practices are death.

I have stated my view of best practices and argued until I am metaphorically blue in the face. I’m looking for new arguments and found them in a Fast Company article, “The Problem With Best Practices,” by Shane Snow. Snow is an author of books on innovation and storytelling and, perhaps, a kindred spirit. Not sure, but I will reach out and find out.

Snow’s article hits hard in its first words and doesn’t hold back. “Best practices don’t make you the best. They make you the average of everyone else who follows them.” Looking ahead: “Best practices are only the best until they aren’t.”  More deeply, the term “best practices” is “one of the business world’s most common conventions, but it’s often arbitrary and based mainly on habit—the result of conditions that no longer apply.” 

For me, the problem with best practices starts with words that are often left off—best practice for [what exactly]? When distribution companies adopt best practices, they are adopting something that is of supposedly proven value for a distributor. But what is a distributor? Years ago, many distributor industry associations published detailed financial, sales, marketing, and operations benchmarks for member distributors, almost always organized in three columns by distributor type: broad line, specialty, or catalog. Best practices were issued to help distributors achieve and sometimes exceed benchmarks in their business.

The result was a massive lockdown on innovation. By thinking of distributor business models as only one of three options, opportunities for creative differentiation were lost. By working toward community metrics, distributors preemptively accepted their fate as an intermediary with margins crammed between supplier sell prices and what customers accepted as a fair price. Distributors offered commodity services, competing on operational efficiencies and scale gained through acquisitions.

I think Snow agrees, as evidenced by his observation and analogy:

Finally, best practices are falsely self-perpetuating. A classic example is Hollywood, which has long assumed that movies with more stars are more likely to be big hits. Research from UCLA and SUNY, on the other hand, shows that this is not statistically the case for films with similar marketing budgets. However, movie studios still put more promotion behind the films they think will be big. Thus movies with ensemble casts tend to make more money, and the “best practice” gets reinforced.

 The movie industry is dominated by artists and creatives. If that industry is a victim of best practices that lead to mediocrity, what chance do distributors have? Snow suggests that one solution is to “borrow best practices from industries other than our own.” This idea has merit but comes with its own baggage. Distributors copied omnichannel best practices from retail, and as I report here, retail has come to believe that omnichannel was always a flawed concept. Retail is moving on. Are distributors? Will distributors copy another industry? I hope not.

Snow offers another approach, one based on copying methods of successful companies or businesspeople:

• Another antidote to best-practice thinking is to attack problems using Elon Musk’s “first principles” by stripping away assumptions, breaking problems down to their essence, and solving them as if for the first time. It’s more time consuming than copying your competitors, but it’s the way games get changed instead of simply played.

I love Musk’s approach and Snow’s turn of phrase that seems to say game changers don’t play by the rules of their industry. But I think distributors should write their own rules, not copy the rules of others. I am attempting to facilitate conversations to this end by introducing the concept of demand centers here and arguing that distributors can reinvent demand centers, not copy them, here.

Maybe I should look up best practices for driving change as a thought leader. Oops. Maybe not.

Your take?

Do you agree with my take on best practices or Snow’s? Can distributor leaders, practitioners, and B2B innovators do better? Will you share your experiences or examples? Please share your comments below or reach me at mark.dancer@n4bi.com.