The problem with best practices

Virtually every consulting engagement that I have lead at SAI Consulting, has, in some way, dealt with processes. There is a reason. When you talk about an enterprise, whether it is a homebuilding company or a company in some other industry vertical, the most basic proposition of that enterprise – the reason for its existence – is the value that it creates for customers and other stakeholders. That value is created by the work that it performs, and that work has to be performed in processes.

Those processes exist – they are present – whether intentional or not.

From a process standpoint, during the course of conducting those engagements, we have seen almost everything and worked on most of it. Business Process Improvement (BPI), Business Process Management (BPM), Business Process Reengineering (BPR), all of the notation languages, process flowcharting, process modeling, value stream mapping, the new execution languages that accompany it, not to mention the TQM, Six Sigma, Lean, Lean Six Sigma, and Theory of Constraints methodologies that act upon it.

To process management, you can add project management. Different, yet complementary.

Given the essential nature of processes (not to mention project management), I am struck by the homebuilding industry’s fascination with “industry best practices”. Were it any other industry vertical, the argument could be made that industry best practices might be a worthwhile baseline (although a dangerous measure to settle for).

Homebuilding is different. The deal-driven mentality that permeates homebuilding, coupled with an unfathomable disregard for process discipline, and a degree of outsourcing that relegates value creation to the level of strip mining, makes industry best practices a perspective you can just throw out. Not that the case for robust, dependable, effective processes has not been made. The National Housing Quality (NHQ) Award program, sponsored for more than 15 years by Professional Builder, NAHB Research Center, and others, was modeled after the Malcolm Baldrige Award program.

Processes are front-and-center in the NHQ, yet even those widely-regarded best practices are not widely-adopted (it is a measure of the depth of this housing market and economic debacle that its victims include previous NHQ winners).

But, the bigger problem is the limitation of best practices. At best, industry best practices promote a satisfaction with some sort of competitive equality, a settling for the expediency of the ideas of someone else. The problem with best practices is that it stifles creativity and innovation, works against creating competitive advantage, and creates the illusion of continuous improvement. It is one step above average-ness, something like above-average-ness.

My advice? Figure your processes out for yourselves, and regard industry best practices as something to understand, but nothing to settle for.