How to Get the Most Out of

Best Practices

What exactly constitutes a best practice? According to Carla O’Deli and C. Jackson Grayson³⁵, labeling any practice as best immediately raises a hue and cry in the organization. Not only is “best” a moving target but it is also contextual. Arriving at a working definition of best practice can help create a shared language across the organization. As the term “best” is highly subjected and context dependent, it seems to imply that no further improvements are possible. So, the term good practice is often preferred. Some companies have thought through carefully while dealing with this definitional issue. The oil giant, Chevron has adopted a simple definition of best practices: Any practice, knowledge, know-how, or experience that has proven to be valuable or effective within one organization that may have applicability to other organizations.

1. 
   Good Idea: Unproved ideas not yet substantiated by data but which make a lot of sense intuitively and could have a positive impact on business performance. They need further review / analysis. If substantiated by data, these ideas could be candidates for implementation in one or more locations / sites.
   
2. 
   Good Practice: A technique, methodology, procedure, or process that has been implemented and has improved which business results for an organization. This is substantiated by data collected at the
   location. A limited amount of comparative data from other organizations exists. It is a candidate for application in one or more locations.
   
3. 
   Local Best Practice: A good practice that has been determined to be the best approach for all or a large part of an organization based on an analysis of process performance data. The analysis includes some review of similar practices outside Chevron.
   
4. 
   Industry Best Practice: A practice that has been determined to be the best approach for all or large parts of an organization. This is based on both internal and external benchmarking work, including the analysis of performance data. External benchmarking is not confined to the organization’s industry.
   

Bumble Bee Approach

High level managers can visit different plants / locations / sites / offices to understand what is going on. These executives make personal judgments about what they are hearing and pass along the relevant information to other offices. This approach can create rivalry, holding up one unit as better than another. But it does not provide enough information or motivation to the weaker unit to adopt the practice. Moreover, this approach may facilitate sharing of “explicit” knowledge — but not tacit knowledge. There is no direct interaction between the two groups. This approach does help identify people who have set the standard. Transferring such people to another location is probably a more effective way of transferring the best practice.

Benchmarking Teams

Benchmarking teams can be formed to assess the current state of an organization on a particular process, identify gaps and problems, and then search for best practices outside the company. Teams often start their benchmarking efforts by trying to compare measures and results in order to identify best practices. A comparison of financial and operating performance alone is not enough. Other factors can affect performance outcomes. Teams should spend less time arguing about “who is really good” and more on looking for breakthroughs in practices.

Best Practice Teams

Unlike benchmarking teams which tend to have a short life span, best practice teams tend to be more enduring. These teams usually consist of managers or professionals with similar responsibilities but in different divisions or plants in the company. The teams are usually led by functional experts who act as internal consultant assisting transfer. Best practice teams also often provide guidelines on what constitutes a best-practice in their function. Teams meet from time to time to share practices and issues and also remain in touch through e-mail and electronic conferences.

Knowledge and Practice Networks

Unlike benchmarking and best practice teams which are imposed from the top, knowledge and practice networks emerge from below. The right culture and necessary technological infrastructure play a key role in the formation and functioning of these networks.

Internal Assessment and Audits

This fourth approach can range from formal technical assessments to internal audit programs. Assessment activities may also include the identification and transfer of best practices.

Transfer of best practices across an organization continues to be a major challenge. According to O’Deli and Jackson Grayson, the biggest barrier is ignorance. In most companies, particularly large ones, people do not know that someone else has the knowledge they require — or conversely would be interested in knowledge that they have. Once they recognize that a better practice exists, the second biggest barrier to transfer is the absorptive capacity of the recipient. Potential recipients may have neither the resources nor enough practical details to implement it. The third barrier is the lack of a relationship between the source and the recipient. Personal ties must be strong enough and credible enough for both listening and helping to be effective. Finally, even in the best of firms, best practices take months to move from one part of the organization to another. This kind of a time lag is unacceptable in a fast changing business environment.

Technology can help in sharing best practices. But technology has its limitations. It should be remembered that all the important information about a process is too complex and too experiential to be captured
electronically. Moreover, without the right organizational climate, technology will have little impact. But in many organizations, the instinctive reaction is to create a technical solution, usually an online database of best practices. Dozens of companies create internal electronic directories and databases and launch massive internal corporate PR campaigns to encourage the use of these databases. But few people enter information about their practices and few access it. There are several reasons for this:

The really important and useful information for improvement is too complex to put online.

There has to be a framework for classifying information. The framework must provide a common vocabulary for people from different businesses and industries to identify similar or analogous processes. This framework must enable diverse units to talk to each other more effectively about their business problems.

Entering information into the system must be part of someone’s job. Busy managers and professionals will rarely take the time to enter a practice into a database unless it is part of their job.

Culture and behaviors are the key drivers and inhibitors of internal sharing. Companies must address some fundamental questions: How do you get people to contribute to and use the system? Are people rewarded for taking the time to share or seek out best practices?

Satyam, one of India’s top IT services providers launched an organization wide initiative to facilitate sharing of best practices. The initiative includes widespread e-mail communication across the organization and interactive knowledge sharing sessions in which the best practices are explained by the people who have implemented them.

According to O’Deli and Jackson Grayson, there are seven lessons for firms about to embark on best-practice transfer:

1. 
   Benchmarking must be used to create a sense of urgency or find a compelling reason to change.
   
2. 
   Initial efforts must focus on critical business issues that have high payoff and are aligned with organizational values and strategy.
   
3. 
   As resources are not infinite, an organization can only invest in and support a finite amount of change at any one time.
   
4. 
   Measurements should not be taken too far as they can be distorted due to inconsistencies in data collection. They are also open to interpretation about local causes for the differences in performance. The debate should shift from “who’s best” and why the measures are not fair, to identifying dramatic differences in performance. Such differences would establish beyond doubt a real underlying process difference.
   
5. 
   Realign the reward system to encourage sharing and transfer. Leadership can help by promoting, recognizing, and rewarding people who model sharing behavior, as well as those who adopt best practices. Rewards must be given for collective improvement as well as individual contributions of time, talent and expertise.
   
6. 
   Use technology as a catalyst to support networks and the internal search for best practices, but don’t rely on it as a solution. A combination of new information technology tools such as e-mail, “best practices databases,” internal directories, and groupware can be used to support employees seeking knowledge and collaboration across the organization. But technology by itself will not create a vibrant market for sharing best practices.
   
7. 
   Leaders must constantly spread the message of sharing and leveraging knowledge for the greater good. Leaders must encourage collaboration across boundaries of structure, time, and function. Some ways to do this are to promulgate success stories, provide infrastructure and support, and change the reward system to remove barriers.
   

According to O’Deli and Jackson Grayson, three themes seem to be evident in all successful internal benchmarking and transfer efforts. First, internal transfer is a people-to-people process. Relationships hold the key to meaningful sharing and transfer. Second, learning and transfer is an interactive, ongoing, and dynamic process that cannot rest on a static body of knowledge. Employees are inventing, improvising, and learning something new every day. New best practices keep emerging. Third, specific skills and capabilities are needed as a foundation. These capabilities include: a process improvement orientation, a common methodology for improvement and change, the ability to work effectively in teams, the ability to capture learning, and the technology to support cataloguing and collaboration.

Ultimately, the key to successful transfer of best practices lies in a personal and organizational willingness, and desire to learn. A vibrant sense of curiosity and a deep respect and desire for learning from others are the prerequisites for success.

(See also: Benchmarking, Benchlearning)

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