Sunday, July 10, 2005

Best Practices Can Destroy Unique Value

Frank at Focused Performance has hit on a subject that I rant on occasionally: Best Practices.

Sure, there are situations where best practices are vital to improving outcomes, especially in medicine, aerospace and defense ... places where mistakes are fatal.

But there are other times in the arena of business competition where emulating a competitor's best practice makes your company look more and more like everyone else. If a competitor is beating you consistently because they have better processes, then you need to do something about it ... like improving your own processes rather than copying someone else's.

Here's where I think "best practices" is especially luring, and dangerous.

When you buy ERP or CRM software that sits at the heart of your business, and that software has hardwired into it a best process for accomplishing all the core tasks of your business efficiently. That's when you have fallen into the Commodity Trap.

Our internal processes are what make our companies unique. They are the heart and nervous system. If Holiday Inn and Hilton Hotels are wired into the same software program, using the same systems to process reservations, provide services, etc., then Hilton and Holiday Inn will become increasingly more like the same company.

It's hard enough today for marketers to find unique value propositions that cause customers to select our products or our services, but when the inner workings of companies become identical, the battle for customer preference is over.

I caution all of you who are at the C-Level to weigh carefully these enterprise-wide best practices software solutions. Find solutions that allow your company to breathe it's own unique way of providing customer value. Find solutions that give you process flexibility. Find solutions that are perhaps smaller in scope, simpler to install and that preserve your character.


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