What Are The Best Practices For Managing Business Intelligence In An Organization?

Best Practices: Myth and Reality: Management, Business & Technology

Introduction:

We often hear the term “best practices.” It has become very popular in the management of public and private sector organizations. “Best practices” are touted as the final solution for many problems, even when they are poorly suited to the situations at hand. Millions of dollars are squandered every year attempting to implement such “best practices.” What do practitioners sell to clients when they are convincing them to follow their best practice?

Practitioners usually have an advanced degree of some sort, which gives them authority, whether deserved or not. They use academia, where most “best practices” are enshrined in education to support their advocacy. Their logical argument is how can anyone argue against these practices when so many smart people support them? We have seen this argument before with the Nortel and Wall Street debacles.

There are numerous definitions of “best practices” in both academia and the business world. Harvard Business Review gives one of the most concise definitions. It defines best practices as “straightforward, actionable advice for novice managers, seasoned leaders, and people at all levels in between.”

Wikipedia provides a perhaps better definition: “A best practice is a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark.” Wikipedia declares that a “best” practice can evolve to become better, could be considered as a business buzzword, and describes the process of developing and following a standard way of doing things, based on self-assessment or benchmarking, as an alternative to mandatory legislated standards. Wikipedia notes that best practice is a feature of accredited management standards, such as the ISO series.

This is the first of three best practices, presenting the perspectives of core members of the Center on management, business, and technology.

1. Best Practices for Management

Managers defend their current practices and organization structures by declaring them as best practice. Managers and advisors seeking to change current practices and structures declare their proposed changes to be best practices. As a consultan, we confess I have also used this term to support and defend my recommendations. Lewis Pinault describes this and other practices of large consulting firms in his exposé, Consulting Demons, which many managers will find both useful and provocative. Related: The Role And Responsibilities Of Human Resource Management

The HBR definition quoted in the introduction seems to apply to any advice and to any circumstances, whether the advice is good or not, let alone “best,” and without limitation as to what circumstances it may be appropriate.

Observations:

1. The term “best practices” seems to originate with the International Organization for Standardization (ISO), the American Society for Quality (ASQ), the Project Management Institute (PMI), and other similar accredited standards-setting organizations, which, among other things, declared that documenting processes and procedures was a best practice. Subsequently, many of the processes and procedures themselves inherited the best practice label.

2. There is no good definition of just what constitutes a best practice. Criteria, standards and validation of best practices are absent or weak. The environment in which a specific best practice is applicable, and when it is not, is often undefined.

3. The phrase is commonly used by business managers in a variety of circumstances:

• A: To support an organization structural change, often without substantiating justification – for example, to establish a new Center of Excellence (which is currently a popular buzzword in the bureaucracy).

• B: To support changes in existing processes and procedures, especially when based on judgment or management preference without sound business reasons.

• C: To defend an existing process, procedure or structure by declaring it as a best practice, regardless of its actual effectiveness.

4. Consultants use the phrase to support their recommendations, especially when there is little other supporting evidence or when there is insufficient billable time remaining in their contract to obtain that evidence.

5: Anyone can declare any structure, procedure or process a “best practice.” It is not a legally defined or regulated term. There are no restrictions governing its use (except within some professional organizations, such as PMI and ASQ, which require their members to comply with those procedures and processes that they have declared to be best practice).

6: Business managers need to be particularly wary whenever they hear the term. Managers need to ask penetrating questions and seek concrete supporting evidence, including:

A: Who decided the practice was best?

B: What basis was used to determine that the practice is best?

C: In what circumstances and under what conditions is the practice best?

D: Who is pushing the “best practice” and what are their motives and objectives?

E: Would the “best practice” really be applicable and beneficial to their organization as it operates within its environment?

F: What is the probability of success of attempting to implement the “best practice,” given current resources and capabilities of the organization?

Conclusion for Management:

Managers need to be particularly wary whenever they hear the term “best practice,” and be alert to ulterior motives of, and potential manipulation by, staff, other managers, consultants, and other stakeholders. Further investigation and analysis may reveal major limitations or weaknesses in the advice they receive, jeopardizing their bottom line.

Best Practices: Myth and Reality, Part 2

This is the second of our series of articles on so-called “best practices.” The first part dealt generally with consultants and general managers. This part addresses general business.

2. Best Practices for Business 

Business as well as bureaucracy uses the term “best practices”. In private business, it appears in forms of frameworks, standards, methods, processes and design. It is a quest to seek the golden chalice of perfection. The idea is to have an approach that people can learn and, if followed properly, will give best results every time. Even if the results are less than satisfactory, the practice developers may make the “best” claim anyway.

In bureaucratic circles, the term is used as a political tool to push an agenda or as a desperate bid to come up with an easy solution to a problem with which they are confronted. Very seldom is it sincerely brought forward. When a “best practice” is brought forward in these circles it must be suspect from legitimacy, quality and capability viewpoints.

Many professional and business service companies and organizations claim to have developed a “best practices” product that solve issues, automate operations, or manage a situation. But when put under a magnifying glass one often finds their real focus is to: by education, political salesmanship, coercion and any other means, get enough people to believe in their product so that they can commercialize their product and reap financial rewards for its success. Their definition of success is the amount of sales generated by convincing people to pay to use their “best practice” and the accompanying materials and services connected with it.

For several decades, “best practice” has been bandied about as the definitive approach for problem solving or carrying out processes using some form of standardization usually based on some past success. After a degree of success is “discovered,” it is spread throughout the industry and sometimes across industries. The problem is that people seldom look at the underlying reasons for that success. If they did, they would realize that it is only successful within specific contextual parameters.

One industry in which “best practices” is properly used is franchising. Some franchises are examples in the private sector where “best practices” have been successfully used. To establish a franchise, a formula for successfully running a specific type of business is developed and sold to people who wish to be business operators. Success is greatly improved as long as they function within the parameters laid out by the franchisor, or so the theory goes. McDonalds, Tim Hortons, Second Cup, Canadian Tire and thousands of other franchises have experienced a range of success using either in-house or copied “best practices.”

Many forms of “best practices” are successful, but there is a dark side that is seldom mentioned – the Best Practices industry. It consists of thousands of products propagandized as “best practices” when in reality they are, at best, mediocre practices with a lot of marketing hype built around them. This is seen in everything from project management (70% failure)[1], strategic management (over 90% failure)[2] to high tech startup failure (90%)[3] according to the Startup Genome Report. However, thousands of professional services practitioners supported by academia, government and industry foist these products on unsuspecting small and medium business owners, scientists, innovators and an unsuspecting public.

There are some criticisms of the use of “best” practice. Eugene Bardach, a professor of Public Policy at the Goldman School of Public Policy claims the work necessary to deem a practice the best is rarely done. Instead, you find “good” practices or “smart” practices that offer insight into solutions that may or may not work for your situation.

Scott Ambler challenges the assumption that a recommended practice can be best in all cases. He offers an alternative view of “contextual practice,” in which the notion of what is “best” will vary with the context.Similarly, Cem Kaner and James Bach provide two scenarios to illustrate the contextual nature of “best practice” in their articles. 

In conclusion, “best practice” is an industry. Like all industries its focus is to make money. Used in the proper context, “best practices” can be of great benefit but it can be a very expensive when improperly applied. Therefore anything brought forward and promoted as a “best practice” should be thoroughly scrutinized.

This concludes the business part of our series on “best practices.” The third focuses on technology.

Best Practices: Myth and Reality, Part 3

This is the third of our series of so-called “best practices.” The first part dealt generally with consultants and general managers. The second part dealt with business. This part addresses technology.

3. Best Practices for Technology 

“Best Practices” are often nothing more than a collection of methods and processes gleamed from a few companies and then touted as being applicable to all companies. Likewise, many business books on best practices are nothing more than a collection of anecdotal stories about how companies X and Y were able to gain significant advantages or productivity using such “best practices”. Often overlooked is the confluence of other critical factors such as company culture, employee behaviors and pre-existing infrastructure that were pivotal to their success.

Observations:

Many technology-based best practices seem like great ideas at the start, but end up being a huge waste of time and money or perhaps a complete disaster. The lure of success is often too great and companies fail to examine critically the applicability and suitability of such “best” practices in their organization as well as the probability of achieving the sought-after success.

One needs to be clear about “best practices” in technology implementation. Even the best technology will not lead to success unless it directly supports your company’s mission and strategy. Understanding this principle alone will help you better assess the applicability and suitability of any best practice before undertaking its implementation. For example, SAP is the biggest and often considered the best-in-class enterprise planning software, and it is sought after by many as the magic bullet to boost their bottom-line and gain competitive advantage. However, SAP has seen its share of high-profile project failures. While there are many reasons for the failures, the point again is that implementing even the best technology is no guarantee for a successful outcome.

Many implementations of best practices in technology are centered on some form of standardization. Below is a brief discussion on some common “best practices” in technology:

• “Upgrade all your computers every 2-3 years.” The potential pitfall is that not all computer users require computer upgrades. If existing hardware and software are quite adequate for doing their jobs, money and time is wasted through needless upgrades.

• “Standardize all computers in the company to save money on service and support.” The potential pitfall is that administrative support staff and others who use computers only for emails and word processing would get a standard quad-core configuration, while power-users and number crunchers would be denied more advanced computer configurations to do their work effectively.

• “Standardizing on commercial off-the-shelf software for an entire organization.” The potential pitfall is that off-the-shelf software is designed to be everything to everyone, and so by its nature is complex with a high learning curve. Most users will use only about 10% of its full functionality.

• “Data security policy to restrict access to emails, instant messaging and internet access.” The potential pitfall is that legitimate users will be frequently frustrated by overly stringent restrictions and will find workarounds to bypass the policy. Such activities could remain unknown to management and pose a real risk.

Conclusion for Technology:

As someone once said, “Sure we have standards, we have thousands of them!” Too many standards are just as bad as not having enough standards.  Standardization is a good practice when properly implemented and it serves the corporate mission and strategy, but one size does not fit all. It is however no easy task to define the “best practices” that are right for your organization.

This is the conclusion on “best practices.” Your feedback and comments will be appreciated. What concrete examples and evidence could you provide on successful and unsuccessful implementation of “best practices?”

Read More:

Top 10 Ways to Increasing Productivity & Better Time Management

The Role And Responsibilities Of Human Resource Management

Top 7 Features of a Highly Effective Executive Leadership Development Program

10 Step Approach to Career and Personal Development Planning