To reach a moving target, you have to aim to where the target will be . . . not where the target is now. To accomplish 20 times more, you’ll need to outdo others in the future. Seeing where they will be in five years can give you a firm foundation for seeing how to go beyond that expected performance that will satisfy everyone else.
The steps for creating a 2,000 percent solution (accomplishing 20 times more with the same time, effort, and resources) are listed here:
1. Understand the importance of measuring performance.
2. Decide what to measure.
3. Identify the future best practice and measure it.
4. Create performance beyond the future best practice.
5. Identify the ideal best practice.
6. Pursue the ideal best practice.
7. Select the right people and provide the right motivation.
8. Repeat the first seven steps.
This essay looks at step three. Your challenge is to identify what the best-in-the-world performance for a critical activity or process will probably look like (in or out of your industry) for the next several years. I call that performance the “future best practice.”
Chances are that your organization does not yet know how to find and select the improved practice elements that, when combined for the first time, will drive you well ahead of the competition. Much of what is written about so-called benchmarking (of which you will read more soon) will not be of much use to you for this challenge. This essay gives you shortcuts to identify future best practices based on our many years of experience in this activity. Never assume you know the answer before you seek to develop practices that exceed the best others will probably do. Unfortunately, many intelligent and experienced people do just that. They smugly pursue their own ideas without looking further. They forget that every industry is filled with bright, energetic people.
For every critical task within your organization, there will almost always be someone on the outside who does it better. In fact, the odds favor the future best practice lying outside of your industry.
To do better than the best, you have to know what the best is and where that best performance will be in the future. Otherwise, you’ll probably set an objective that’s too modest and deny yourself what you could learn by studying the best.
Not Just Copycatting, But Innovating
Best-practice thinking evolved to the form we are discussing out of simple benchmarking. A benchmark is a standard of excellence against which performance is measured. For a product, seeking a benchmark might mean buying a competing product and letting engineers tear it apart to see how you could both copy and improve what exists now. Almost everyone does this. Forget such copycat-based work. Tomorrow’s best practice is being developed by someone other than the company you are copycatting. Through copycatting, your effort will be wasted by aiming at the wrong target. The same effort aimed at learning from other industries will yield better results than copycatting because the knowledge base is greater and it’s usually more powerful than anything you can develop on your own.
You also need to innovate more because making serious inroads in a marketplace requires larger advantages over competitors that customers crave.
No Assuming Allowed
Creating assumptions about the future best practice based on anything other than detailed investigations is simply a version of the not-invented-here stall. Do your homework!
The Quest for the Best
Here are useful steps to begin your search:
1. Look internally to find out who does it better than anyone else in your organization.
2. Identify why some operations perform better than others.
3. Ask around inside your organization to start learning who does something similar even better in other industries.
4. Check out public sources of information on these subjects.
5. Contact those who may have something to offer.
6. Consider buying access to best-practice databases like those maintained by accounting firms and The American Productivity and Quality Center.
7. Interview experts and academics who may have applicable knowledge.
8. Ask those you contact for other leads.
9. Look globally.
Keep going. Determining the future best practice is a continuing task. Whether or not you notice it, the bar for future performance is always being raised. Be circumspect about this work, however, lest you awaken a sleeping rival prematurely.
When you work effectively on the future best practice, you will be able to identify:
Several current best practices from outside your industry that your competitors are not using
The current best practices in your industry being applied by competitors
Where both sets of current best practices will probably evolve as processes and to what performance levels over the next five years
A way to assemble many of the current and future best practices in a new way to create performance that far exceeds the likely effectiveness of any existing organization over the next five years
Most benchmarking programs ignore all these lessons. That shortsightedness will assist you in creating large advantages that lead to exponential success.
King of the Hill
It is natural to assume that large, profitable industry leaders like GE, Microsoft, Intel, and Dell use only the current best practices. But that happy circumstance is usually not the case. The older and bigger the company is, the fewer future best practices it is likely to develop and sustain. Oddly enough, marginal companies tend to be better sources for future-best-practice information. Why? Low-performing companies face more cash-flow and competitive pressures and have little choice but to focus on efficiency in all of their endeavors. These firms are also less likely to stand pat with existing procedures. They know that performance must improve or they won’t be around long.
Don’t Believe You Already Know the Answer: Ask Why
Many people have misinterpreted what they see. If you ask why things are done in a certain way, you’ll avoid that mistake. Henry Ford told buyers of his Model T automobile that they could specify any color they wanted as long as it was black. Many people assume that Ford was either color-blind or had gotten a good price for that black paint. In fact, black was the only color you could use for a consistent color in those days. If other colors had looked good on the Model T, Ford would have offered them.
Likewise, visitors to Japanese factories usually marvel at how compact they are. Knowing that land is expensive in Japan, visitors assume they know the answer. And they are partly right, but even when land is cheap such as in a corn field in Iowa, Japanese factories are compact. Why? Japanese executives know that close quarters improve communications among workers. The closer people work together on a product, the better the quality. That is a reason why team-built products are usually better made than assembly-line offerings.
Look in All the Obvious Places for Future-Best-Practice Information
What online resources, periodicals, books, seminars, databases, services, and organizations are available to help you?
Who are the favorite sources for authors, writers, and editors?
What organizations have been described as being excellent performers in these areas?
Who do experts say is the best they’ve ever seen?
Who do the best in the field pay attention to?
Look in All the Not-So-Obvious Places for Future Best Practice Information
Which organizations in the world could have processes like yours?
Who do the experts in these organizations think does these processes the best now and will do the processes best in the future?
Which experts in top-performing, noncompeting organizations will let you visit to observe, measure, and discuss their processes?
Be Prepared to Do Your Own Measuring
What can be seen and learned during a personal visit?
Can you gain more access to key people during a visit?
Who should measure?
What should they measure?
Estimate How Quickly the Future Best Practice Will Change in the Future
What information do you need to make such an estimate?
What has been the rate of improvement?
How is that rate of improvement likely to change?
How can experts help you improve your estimate?
Copyright 2007 Donald W. Mitchell, All Rights Reserved