Best Practices or Next Practices?

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Benchmarking > Best Practices > Best Practices or Next Practices?

Best Practices or Next Practices?
Hannah Davis
C.K. Prahalad says best practices take companies only so far. At best they allow firms to catch up with their competitors, but it will not make them market leaders. Prahalad, who is obviously not the biggest fan of benchmarking, advises to look for next practices instead, big problems / breakthrough opportunities. To find next practices, he recommends the following 6 questions:
1. Is the problem widely recognized?
2. Does it affect other industries?
3. Are radical innovations needed?
4. Can a next practice impact the economics of the industry?
5. Can a next practice be a source of competitive advantage?
6. Can a next practice create a big opportunity for our firm?
Source HBR, April 2010.
The article made me wonder: when is benchmarking better, and when are you better off looking for next practices?

Concerning the Benchmarking
Benchmarking is a very potent tool for the improvement of processes, although in fact the competitor or leader may not show his best practices?

Benchmarking on Best Practices
Zumstein Anton, Manager, Switzerland, Member
Benchmarking in general is certainly a valuable tool to find out where you are positioned right now.
With respect to best practices I agree with Aleyda, it is questionable if the data available is reliable enough. Still, it can be a good basis for further considerations on possible improvements.
It is rather unlikely that you will be able to reinvent the wheel every year. I therefore promote an evolutionary approach, unless of course you have a brilliant idea already in mind.

Benchmarking must not be Copying
amine salah
Benchmarking may be very useful when it isn't a simple copy of other's experience. When it's so, it limits creativity. Improvements in the same activity aren't necessarily the best. But improvements are very interesting when they come from very different activities.

Benchmarking Gingers you Towards Improvement
CHINELO NWOKORIE, Management Consultant, Nigeria, Member
Benchmarking actually is good practice. Why? Because it keeps gingering you towards improvement and that means you do not stop because competition will always be there. You keep moving on to the next level and that way, you are always in touch with present happenings and you keep looking for better ways to do things. It may not be best practices when it is misused... Some companies just keep doing what others are doing without being creative on their own.

Benchmarking is Learning Openly
A.S. Ismail
Benchmarking is about learning openly from some else best practices with some improvements to suit your needs.

Benchmarking is a Basis for Improvement
Catherine Chong
Benchmarking is needed to ascertain where we are positioned in comparison with our competitors. With the knowledge of our positioning, we should then be able to work out a plan for improvement and thereafter, to excel in the industry.

Use Benchmarking as a Stepping Stone for Next Practice
To be beneficial, benchmarking should be used as a 'stepping stone' where after, as Hannah Davis says, you aim towards ' the next practice' - two or three steps up. This will then put you on a level where you become the leader in the practice.
If you find your company always benchmarking, it means you are always number 2 and you are not leading - a scenario that is not healthy for your business.

Fit Benchmarking into Context
zakari bukari, Student (University), Denmark, Member
Benchmarking is a good strategy for improving performance, however sometimes it needs modification to fit a particular social, cultural and economic context.
Stereotyping in some context without modification and creativity could lead to under performance and failure.

Benchmarking must Combine External with Internal Know-How
Firstep Eapl Astimen, Manager, Indonesia, Member
Benchmarking is knowledge acquisition from an external tacit knowledge resource that should be combined with an internal knowledge initiative.
After this it can be codified to explicit know-how to create new, deeper know-how to provide problem solution.
Know-how can not be copied and pasted directly.

Confirming Good or Bad Direction
Jan Uriga, HR Consultant, Slovakia, Member
Benchmarking is a great tool for traditional, conservative and no risk taking companies to confirm that they are safe or it could be an alarm clock to start thinking and doing different things. On the other hand it ought to be a strategic decision to keep track of strategy while others are getting crazy in doing relevant changes.

Best Practices cannot become Encyclopedia in that Discipline
D P BABU, Strategy Consultant, India, Member
Best practices are not common tools for operation to each organization. Since strategies link organizations with their environment, so also best practices need to link strategies. Strategies are distinctly different from each area, so also best practices different from each discipline.

Playing to the Tune of the Industry or in the Background
Sia Boon Sen aka David Sia
Benchmarking is essential. Just like any other metrics, it should only be held as a guide at best. Do not be happy with our sustaining or surpassing the benchmarks. It is just like playing within the given set of rules of the game or industry. Go for the breakthroughs that others have yet to ponder about. In short, be the leader in our arena.

Benchmarking Does not Limit Firms
Pius E. Africa
I do agree with Hannah Davis' thought process. However, I have some reservation with C.K. Prahalad's view that benchmarking "at best allow firms to catch up with their competitors, but will not make them market leaders".
The question is, why not? Whilst benchmarking provides a standard it does not limit firms as C.K seems to be portraying. Serious minded (innovative, aggressive and intrapreneurial) firms can surpass the set benchmarks overtime, attract more (larger) market share and become market leaders in the foreseeable future.

Benchmarking Should not Limit Firms
Daniels, MBA Student, United Kingdom, Member
The key rule is to play the game on your terms not your competitors' terms. So benchmarking is nothing more than a marker, the problem is too many companies associate benchmarking with best practice the question being best practice for who?

Avoid Herding
Krishnan Jagadheeswaran, Turnaround Manager, India, Member
Benchmarking is good as long as it still differentiates your product from that of your competition. Benchmarking of best practices within an industry could be disastrous to the industry profitability in the long term as it results to less and lesser differentiation of the end product to the customer. This would lead to a concept called as herding in a strategic landscape where you have products of similar performances, marketing efforts, intense rivalry thereby resulting in reduced profitability.

Benchmarking is for Followers
Joy Tio, Student (Other), Philippines, Member
If you are just content with being the follower in the industry, benchmarking will suffice. Otherwise, break out of the box and look for the next better practices instead!

When and How of Benchmarking
Jagdish B Acharya, Consultant, India, Premium Member
Whenever improvements happen, it is because of some process changes, measurements, comparisons and controls. Benchmarking tells about "best" sharable targets or goals and hints at processes behind them. So it tells about processes and levels achieved in those processes.
In my opinion it should not be used for starting processes as per the "best" in that. The processes should come out of an inside out process based on company's analysis of strengths, weaknesses and market. After this is done, company may look at benchmarks for deciding about levels.
Benchmarking is an outside in process and if used for selection of processes or reporting mechanism, may lead to some form of imitation and can never make one leader. Leaders do not follow benchmarks, they create them by inside out processes.

Best Practices or Next Practices?
Madan Gopal Agarwal, Business Consultant, India, Member
It is like 'Who came first: Chicken or Egg?' Best practices are those 'known and proven' practices successfully implemented by companies. Next practices are those which are being evolved or under alpha / beta tests. Both have their own advantages. Best practices need no experimentation and their process of implementation is known. For next practices, it is to be evolved and hence needs a lot more time and patience.

No Such Thing as a Best Practice
venkataramanan, Financial Consultant, United States, Member
In the current ever changing world there is no best practice. It is only the next improved practice. Life is evolutionary. Better and better practices are continuously evolved. The wise follow the change.

Benchmarking with Other Industries
Vivek Hattangadi, Management Consultant, India, Member
Remember benchmarking need not be in the same industry. For instance, a pharmaceutical company may benchmark a fmcg company for improving its distribution services. Benchmarking can encourage a company to become open to innovative practises from other industries.

Best Practices or Next Practices
Wilf Marshall, CxO / Board, United Kingdom, Member
By definition best practice can only make an organization as good as anyone else. If that is all that is required then it is OK to stay in touch and adapt according to whatever evolves. However, if the requirement is to be better then it is necessary to do more and that will require the pursuit of the 'next practice'. Doing this all the time in all the places means that you are embedding continuous improvement. One question I would ask in addition though is whether continuous improvement is really enough to enable you to achieve 'better', whatever that is. It may be that innovation is required and that may require a whole new skill set for a significant group of people. The management challenge is then about sustaining stability and performance whilst encouraging/enabling innovation and change.

Benchmarking of Best Practices
elvira v. chua, Teacher, Philippines, Member
Benchmarking is necessary especially if research results are not enough for us to go for a decision; or if we have already made a decision but there is still some uncertainty about some areas of implementation. We need to observe the best practices (according to our need) of other companies for us to see the answer that we were seeking. This activity doesn't mean that our institution/company is not growing; however, it's just a wise decision of taking away the trial and error of an action plan... Which may save costs.

No More Benchmarking for Global Banks on Basel II
Trynos Chimusimbe, Corporate Financier, Botswana, Member
I wonder if Basel II can still be regarded as the basis for best practice for banks after the crisis in which some bank executives had a hand in creating. The problem of benchmarking of best practice cuts many sectors. I think another approach is needed, possibly prahalad's next best practice.

Best Practice as a Tool
Vinutha Ajay, Student (MBA), United Arab Emirates, Member
Best practices help in situations when an organization has reached a point wherein it needs to know what to do next without having to spend resources on 'trial and error' methodologies...
It makes sense to learn from the mistakes of others. At the end of the day, most organisations are as unique as the individuals that run them anyway..... But it does feel more comfortable knowing someone has already tried the path and has come out successful.

Benchmarking and Next Practices
Patricia Dlamini, CEO, South Africa, Member
While benchmarking is critical to an organizations as it repositions or claims a position within a particular industry/market; "next practice" are no doubt the way to go forward to be a leader. Setting these practices also go hand in had with the increased levels of risk as the organizations ventures in innovative and untreated areas! While organizations benefit greatly in being leaders of setting "next practice" as they are usually perceived as having a competitive advantage... It is also an cost advantage not to' reinvent the wheel' but innovate for success.

Benchmarking is Basically Comparative
Benchmarking is basically a comparative process. If we find that we are not performing as well as others the next step is to determine what and how we want to improve. If we are doing comparatively well, then the focus certainly should be on "next practices", what we can do better. This is clearly evident in the ICT field.

Best Practices Vs. Next Practices
Rebecca Roe, United States, Premium Member
Best practices come about after research and development have taken place. Usually at places where there is money for research. Many companies that don't have money allocated for research and monitoring must rely on benchmarking on a regular basis to get a feel for where their company is on the measuring tape. Its up to the company to evaluate whether they want to adopt the whole package or deconstruct and choose what may work best for their environment and operations. Your individual company can tweak the practice and structure innovative improvements based on the individual goals and directives--personalize so to speak. They then can write their own outcomes based on what they did and how they fared.

Benchmarking, Lagging and Leading
Tleli Makhetha, Business Coach, South Africa, Member
The benchmark is an indication of current best practice. Lagging organisations can learn how far they are from matching industry performance and make the necessary decisions about their future. Leading organisations on the other hand are able to focus on future practices to extend their leadership.
For me benchmarking is a key element in the development of strategy and each organisation has to approach it on the basis of its own strategic positioning.

Continuous Benchmarking helps to Avoid Lagging Behind
E Saruchera, Finance & Admin Manager, Malawi, Member
Benchmarking is a useful tool that could be utilised by organisations to improve on their process flows, quality of product and service delivery. It is important that close scrutiny is done so that we compare similar items/ processes. Benchmarking should be an ongoing process and as such it has to be done continually to avoid the risk of thinking you are practicing best practices yet in real instances you are lagging behind.

Mix Benchmarking with Next Practices
Hassaan Khalid
I guess its a mixture of both.
You benchmark to maintain a certain standard.
But consumers want value which comes when your product is different from others. So for that you need next practices.

Best or Next Practice
Tonnis van Dam, Business Consultant, Netherlands, SIG Leader
Research has shown that organisations that benchmark themselves have higher performance growth that those who don't. So benchmarking is beneficial. But why and how? Copying your competitor will not make you better than him. So do not copy your competitor. But use best practices from elsewhere, e.g. outside your industry, of other countries, or be creative.
Use performance benchmarking to see what performance levels are possible. To see what your performance improvement potential could be. Use it to shift your mindset. And then think of methods, ways, to change your organisation to achieve those challenging performance levels.

Special Interest Group Leader
Tonnis van Dam
Business Consultant

Best Practices

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