“Best Practices”: Why They’re Not Always the Best for You
The phrase “best practice” carries a mystical aura. Executives and managers alike strive to align their organizations with the strategies and frameworks deemed superior by consultants and industry heavyweights. The promise is enticing: Who wouldn’t want to adopt methods that seemingly guarantee efficiency, reduce costs, and deliver spectacular results? However, as many companies have discovered, best practices aren’t always beneficial (or practical). From inflated costs to watered-down innovation, the challenges are numerous and can be surprisingly damaging.
In this blog post, we’ll explore the concept of best practices and unveil why rigidly adopting them without thorough consideration can derail your company’s progress. We’ll also examine specific scenarios in which best practices can cause inefficiency, waste resources, and reduce flexibility.
Let’s get into it.
1. The Allure of “Best Practices”: Fear of Missing Out (FOMO) in Business
One of the biggest drivers behind the widespread adoption of best practices is FOMO. Consultants and industry experts often pitch best practices as a carefully packaged product designed to spark a bit of anxiety in well-funded companies. By showcasing case studies of organizations that achieved remarkable success following a particular method, these consultants create a sense of urgency: if you don’t follow the trend, you might be left behind.
However, what these success stories rarely show is the underlying context. A large enterprise might have the resources, infrastructure, and specialized talent to make a “best practice” work to its advantage. Smaller businesses or startups, on the other hand, often find themselves stretched thin, trying to replicate what worked for a far bigger player. Some employees that come from big companies might try to “fit” best practices into a company that hasn’t even found a market. In such cases, the cost of adoption can be extremely high, and the return on investment (ROI) might be negligible. Ultimately, best practices can serve as a form of herd mentality, motivating companies to act out of fear rather than logic.
2. Why “Best Practices” Can Undermine Efficiency
Despite their promise of improving performance, best practices can lead to inefficiency, wasted resources, and reduced flexibility. Consider the classic example of striving for the lowest possible cost of production. This is a principle often regarded as a “universal best practice.” While producing at the lowest cost sounds ideal, the road to achieving this can be paved with hidden expenses.
Costly Implementations: Setting up advanced production methods might require high upfront costs, specialized equipment, or extensive training. If your business operates at low volume, you might never achieve the economies of scale necessary to justify the initial investment.
Trade-Offs in Growth: A relentless focus on minimizing cost can sideline other strategic objectives like capturing new markets, innovating product lines, or investing in better customer service. By channeling resources into adopting a best practice, you could be losing out on growth opportunities.
System Strains: Even if you successfully implement a “cutting-edge” process, your existing supply chain, labor force, or managerial infrastructure might not be equipped to handle the new demands. This can create logistical bottlenecks and balloon overhead expenses.
In essence, the pursuit of best practices can sometimes become a double-edged sword: The method that’s “best” on paper (and on a completely different company) can quickly drag your organization away from agility and real growth.
3. When “Best Practices” Fail
Let’s break down a few specific scenarios in which adopting a so-called best practice can do more harm than good:
Exorbitant Costs with No Meaningful ROI
Imagine investing in a high-end production system touted as the gold standard in your industry. The cost of new machinery, training, and process overhaul might far outweigh the incremental benefits you gain. Even if you reduce manual work or introduce efficiency at certain steps, the overall financial return could be overshadowed by long-term maintenance fees, software updates, or support contracts.Opportunity Cost of Overlooked Projects
Allocating major chunks of your budget and workforce to implement a best practice can deprive other promising initiatives of the necessary resources. Perhaps there is a marketing campaign that could significantly boost sales or a product improvement project that might revolutionize your offerings. By going all-in on what everyone else is doing, you risk missing out on innovative ideas that could deliver a higher ROI.Misaligned Priorities and Reduced Flexibility
A business that makes cost-saving a top priority might neglect equally important objectives, such as brand-building or market expansion. Plus, if you lock yourself into a system designed for a very specific process, pivoting to new opportunities later can become cumbersome and expensive. When conditions change—as they often do—the rigid best practice you invested in might leave you stranded. This becomes more relevant if you are a growing company.
Key Takeaways:
Context is Everything
Before committing to any best practice, take a comprehensive look at your company’s context. What are your core objectives (e.g., cost reduction, revenue growth, market diversification, innovation, or customer satisfaction)? A best practice that works wonders for a multinational conglomerate might be entirely unsuitable for a startup still establishing its product-market fit. Always evaluate how a given methodology aligns with your specific goals, constraints, and stage of development.
Financial Realism Matters
In business, cash is king. It’s easy to get caught up in the intangible benefits of adopting a “world-class” solution, like gaining industry recognition or winning awards. But if these intangible advantages don’t contribute to the bottom line, they can be little more than vanity metrics. At the end of the day, the metric on your Cash Flow Statement (i.e., “Cash at the End of the Period”) is often the most telling measure of success. If your best practice adoption drains cash without offering substantial returns, it’s not truly “best” for your business.
Question the Herd Mentality
Best practices often come with the implicit assumption that following the herd is inherently beneficial. But a marketplace defined by constant change and innovation rewards those who can differentiate themselves. Blindly doing what everyone else is doing might elevate you to the industry average. In many cases, it merely leads to stagnation. Don’t be afraid to chart your own course, experiment with unique solutions, and measure outcomes rigorously. True growth and competitive advantage often emerge from going against the grain, not following it.
Conclusion
While best practices have their place as helpful benchmarks or guiding principles, they are not applicable to everyone. In fact, adopting them indiscriminately can create inefficiencies, waste critical resources, and lock a company into strategies that may not align with its long-term goals. Being aware of the pitfalls and evaluating the financial and operational realities of your business can prevent missteps that drain your company’s lifeblood—its cash flow—and stifle its potential.
Ultimately, the key is to maintain a healthy dose of skepticism. Before jumping on any industry bandwagon, conduct a thorough cost-benefit analysis and consider both the tangible and intangible outcomes. Look at the distinctive needs of your organization, the volatility of your market, and your strategic objectives. This way, you can determine whether the “best practice” truly aligns with your vision. More importantly, you can really quick gauge whether a custom approach, tailored to your unique challenges and opportunities, will serve you better.
Sometimes, the latest trend that everyone’s raving about might actually be steering you in the wrong direction. By trusting your own data, instincts, and strategic insights, you’ll be positioned to make decisions that genuinely advance your business objectives, rather than just following the crowd.
