In response to this frustration, many seek straightforward, unambiguous solutions that promise to eliminate uncertainty and complexity. This explains the growing demand for "silver bullets" – universally effective strategies that guarantee success. Interestingly, even established businesses exhibit similar patterns, as they, too, yearn for these silver bullets to achieve their goals.
Apart from the desire to avoid uncertainty, there are other reasons why the corporate world adheres to certain "rules of the game":
- External Validation: The saying "No one is a prophet in his own land" holds true in the corporate realm. Leaders often exhibit more scepticism towards internally generated ideas compared to those originating from external sources. Therefore, employees down the hierarchy must provide external validation to support their arguments.
- Rapidly Evolving Knowledge: Information about the economy and competitors' businesses becomes obsolete at an alarming rate. Approaches that worked exceptionally well in the past quickly lose their effectiveness. This is where consultants play a vital role by reshaping and structuring benchmarks and best practices to make them easily digestible. Regularly referencing this essential knowledge enables managers to learn on the go, instilling confidence in their expertise and reducing frustration.
- Focus on Real Problems: Most managers prioritise the actual challenges they face in their daily lives rather than the intricacies of underlying models. They direct their attention to data from competitors and market leaders within their niche, occasionally looking at global corporations for best management practices.
So, what kind of information do business leaders and their teams seek?
Benchmarks are measurable indicators, both qualitative and quantitative, specific to an industry or sector. They include factors such as headcount, organisational hierarchy levels, customer satisfaction scores, process completion time, and the presence or absence of certain positions or roles. Benchmarks serve as standards for comparison and variance assessment.
On the other hand, best practices encompass a set of recommendations, methods, and procedures widely recognised as the most effective and successful in a particular area. They draw from experience and expertise, aiming to yield optimal results, reduce risk, and improve performance.
However, despite the value of benchmarks and best practices, their application can sometimes fall short. Let's explore the common reasons behind less than optimal utilisation of competitive intelligence:
- Hype: Fashion-driven demand for specific tools and approaches is not uncommon. The implementation of these tools may occur not out of necessity but simply because "everyone else is doing it." When a tool is promoted solely to enhance an employer brand or mimic reputable organisations without genuine recognition of its necessity, the project loses its purpose. It becomes an empty formality, then frustrating employees rather than delivering value.
- Irrelevance of Tool Choice: Tools that work well in certain stages of an organisation's lifecycle may hinder progress in others. For example, process performance assessment tools that excel during the early stages may not be suitable when the primary focus is revenue generation and testing business ideas. External factors like legislation, cultural communication patterns, and capital availability also impact the effectiveness of practices, yet these factors are often overlooked in case descriptions and applicability analysis.
- "Glossed-Over Triumphs": In highly competitive cultures, success defines both an individual's social standing and society's driving force. The pursuit of success leads organisations to emphasise victories while distancing themselves from failures. This phenomenon is especially prevalent in Orange-level organisations of Spiral Dynamics, where cut-throat competition prioritises success. In this climate, managers are keenly aware of their fragile reputations, and any admission of fault is viewed as a weakness. Thus, critical details are often brushed under the rug, presenting an embellished narrative of the journey and its resulting success.
- Halo Effect: This bias occurs when success is attributed to practices and approaches solely based on the observations of a successful company. The Halo Effect, as described in Phil Rosenzweig's book of the same name, assumes that these practices are the cause of success. However, they may have little to do with the actual results and can even impede business development.
- Survivorship Bias: This bias arises when a person selectively perceives successful cases while neglecting information about failures. Decision-makers often try to generalise distorted samples of successful cases, searching for simple schemes and rules to explain everything. However, studying companies that did not "survive" is essential for making informed management decisions.
In summary, we are afraid there are no "silver bullets" in business. While benchmarks and best practices provide valuable insights, their blind application can lead to resource wastage, reduced credibility, and ineffective problem-solving. To maximise their benefits, consider the following ground rules:
- Relevance: Analyze the applicability of approaches or practices to your organisation's unique context.
- Critical Thinking: Avoid blindly following authority figures and renowned names. Financial success does not automatically validate every practice or process.
- Analytical Approach: Generate hypotheses, identify vital factors, and compare them logically.
- Internal Discussions: Engage your team in internal discussions to explore the information at hand. Consultants can facilitate this process if necessary.
Authors:
Pavel Charny, ORTALEX, Managing Partner, Dubai
Olga Kuleshova, ORTALEX, Senior Advisor, Tbilisi