Today’s “best practices” lead to dead ends; the best paths are new and untried. – Peter Thiel*
For those of you who may not know, Peter Thiel is co-founded PayPal with Max Levchin and Elon Musk (the so-called PayPal Mafia) and served as its CEO. He also co-founded Palantir, of which he is chairman. He was the first outside investor in Facebook with a 10.2% stake acquired in 2004 for $500,000, and sits on the company's board of directors. I think he is well-qualified to make such an observation, based on the successes of which he has been a part.
Several times a year I may receive a request from some executive or high-level manager in one of the companies we server to “come talk to us about ‘best practices,’ because we know we need to improve.”
About ‘Best Practices’
In today’s world of constant and rapid change, I am not at all certain that the term ‘best practices’ can have any real applicability.
Consider cybersecurity ‘best practices,’ as an example: by the time you have brought your company up to what was defined as ‘best practices’ at the time you engaged for the services and software, those ‘best practices’ are probably out-of-date. If you and your company are not constantly evolving and staying up-to-date with the latest threats to cybersecurity, then there is a good chance your enterprise is vulnerable to some degree or other.
Let’s consider an example where ‘best practices’ might find some value—say, in back-office accounting. Yes, there are probably some best practices in how a firm handles cash, cash receipts, bank deposits, cash applications, cash disbursements, and so forth.
However, even those best practices will need to be adapted to the size of your enterprise and even the number of levels in the management hierarchy. What’s good for General Mills as a ‘best practice,’ is probably not applicable for Mom and Pop’s Donut Shop or a midmarket manufacturing operation.
What Will ‘Best Practices’ Get You?
If you implement ‘best practices,’ what will your company gain?
My guess is—very little.
Unless your back-office is a real mess, sales and operations planning is entirely dysfunctional, or your shop floor is totally out of control, then an effort to discover and apply ‘best practices’ is likely going to be a fruitless exercise. There is very high likelihood that the best practices implementation will make one not 0.01 percent change in your operations bottom-line profitability.
Still Stuck Thinking about Imitating the Success of Others
As Thiel says, all “the best paths are new and untried.”
But, sadly, most small to mid-sized enterprises with which we engage are still stuck thinking about imitating the success of others through ‘best practices.’ Executives and managers in these companies seldom have opportunity to think deeply about the future and innovations because they are mired down in the day-to-day routine of quenching the inevitable fires that are constantly disrupting their business.
Lacking a Toolset for Guided Discover and Innovation
And, even if they do have some time to think about the future, they don’t have a toolset that will help them guide their management teams through the process of discovering and innovating new paths to a new and brighter future.
This is where the Thinking Processes (Theory of Constraints) can be so very effective. Not everyone can be a Peter Thiel to cut through the haze and see innovative ways to new profits and growth. However, the Thinking Processes have demonstrated their ability—in competent hands—the help organizations of every size achieve breakthroughs in thinking that lead them toward dramatically improved profits by revealing untapped potential both within the company’s four walls and without—in their marketplace.
“The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative.” (Thiel, ibid, p. 2)
Every innovation is unique. That is precisely why we, as consultants, do not arrive at your doorstep with cookie-cutter solutions and the goal of instituting ‘best practices.’ We arrive with an open mind and a toolbox of methods to help you and your organization unlock the storehouse of tribal knowledge you already have. This is the key to effective discover and innovation in your enterprise.
What have you done to truly innovate lately? Let us know by leaving your comments here, or feel free to contact us directly.
* Thiel, Peter; Masters, Blake (2014-09-16). Zero to One: Notes on Startups, or How to Build the Future (p. 1). The Crown Publishing Group. Kindle Edition.