Chapter 11 Where Many Cooks Improve the Broth Step Three: Identify the Future Best Practice and Measure It This chapter begins to explore the fourth of six perspectives outlined in the Foreword to this book: a call to set objectives and plans beyond the best of what someone will soon implement as tomorrow's best practice. This chapter will show you how to identify what the world's future best practice will be. After focusing on one important process for your organization and deciding how to measure that process, your next challenge is to identify what the best-in-the-world performance of that process will probably look like (in or out of your industry) for the next several years. We call that performance the "future best practice." Chances are that your organization does not yet really know how to find out about the elements of best practices 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 more is coming up) will not be of much use to you. This chapter will give you shortcuts to identifying future best practices and the lessons of many years of experience in this area. It is never smart to assume you know the right answer before you pursue best-practice methods. Nevertheless, when savvy people innovate, they tend to smugly pursue creating in their own way without looking further. They easily forget that industry is filled with bright people. Some will have worked with processes similar to theirs. Introspective factory managers cannot realistically hope to match best practice in every manufacturing process, yet many bet that they can. For one thing, it's a sure bet that you won't find all the best practices inside your organization. You should be aware that for each critical task within your organization, there is almost always someone on the outside who does that task better than you or anyone else. In fact, the key to the future best practice probably lies in another industry. We can learn from those who are the best at a given task. This is why, for example, we take lessons from the golf pro. But remember, no individual or company is likely to achieve the future best practice in more than a few areas. Just so, the golf pro who is the best at putting may not drive the longest ball. Therefore, your task is to look deep and wide, to access many industries and organizations, to find and pursue the future best practice in the tasks that are important to you. This is the trail to becoming the very best you and your organization can be, and it is the road to the 2,000 percent solution. Not Just Copycatting, But Innovating Just what is the future best practice, anyway? Best-practice thinking evolved to the form we are discussing out of simple benchmarking. A benchmark is defined as a standard of excellence against which rival products are measured. Crafty industrialists are notorious for buying a competitor's successful product and dismantling it. The engineers check out the design to see how it works. They note good aspects and bad, ways the item could be improved, and estimate how much it would cost to make. If the design team can do a better job, they produce their own version. This kind of dissection and copycatting goes on all the time. The auto builders do it. The microchip companies do it, too. It explains why the military gets excited when the latest version of the enemy's best fighter plane is captured intact. But the future-best-practice approach goes far beyond learning from the competition. You are seeking the best means over the next several years of achieving excellence in a particular process. Forget slavish copies. You have to go further. Here's why. First, tomorrow's best practice is already being developed somewhere else. By the time you match what is currently out there and get to market, you will be behind someone else. Like a marksman aiming at a moving target, you must aim ahead of where the best-practice target is now to find where the future best practice will be. Second, you need a clear-cut edge beyond the future best practice to make serious inroads in a marketplace. The bigger the advantage over your competitors, the better. This target means aiming where you hope no one in your industry, or any other, is even trying to get as yet. Obviously, copycat techniques will not be enough to get you far out in front of the pack. Third, you need to move beyond copycat techniques because people outside of your own industry may know more about everything you do than does your entire industry, and their viewpoint is advantageous in several ways. People outside your industry have the added benefit of being easy to access. They have less reason to hold back information. There are rarely legal problems with sharing. Also, they feel repaid if you give them ideas about how they can improve their own performance. So the price is usually right. No Assuming Allowed When we begin to act on our assumptions about what will happen, other things can go wrong. Consider assumptions about how others will behave. Let us look at safety on the road as an example. Many years ago, a young man discovered the danger of making assumptions while driving. He had stopped to make a left turn on a lightly traveled secondary road. He assumed that if a car approached from behind, the driver would swing the wheel to the right and drive around him. You would think a ton of metal at rest on a highway would have registered in the approaching driver's mind, but she was so preoccupied that she hadn't noticed the car in her way. The young man's car was hit by this vehicle, which was going almost forty miles an hour, and was totaled. Luckily, he wasn't killed or badly injured. Research indicates that on occasion drivers become so preoccupied or distracted that they overlook the obvious. Perhaps the distracted driver was humiliated by the boss a few minutes earlier. Or her husband may have walked out, leaving her penniless and with children to feed. Or perhaps she had just flunked out of college. All of this can happen to sober drivers. DWIs add a wild card to the equation. Assumptions about color recognition also played a part in this accident. Some colors clearly do not register as well as others. The young man's jolly green giant of a car was low on the color-recognition scale. He vowed never to have this experience again. When he discovered yellow was the most conspicuous color, the color most likely to be noticed, he ordered a car that looked like a four-wheeled banana and drove it for years. Just the same, he kept an eye on the rearview mirror when turning left. In the same vein, fire companies bought trucks from the one-time market leader and now-defunct American LaFrance in red only. Fifty years ago, the prevailing wisdom was that red was the most conspicuous color, but, in fact, it is not as arresting as yellow. So Mack and its rivals in the fire-truck business feature yellow now. Best practice on the highway also calls for a series of defensive measures, especially if you ride a motorcycle. Motorcyclists rode with their headlights on years before it was required by law. When a driver looks in the rearview mirror, the driver expects to see another car. Since the driver doesn't expect to see a motorcycle, it may not register. But a biker's lighted headlight coming up from behind is attention-getting. Similarly, Sweden, Finland, and parts of Canada call for the use of headlights on all vehicles during the day so that drivers will be sure to notice each other. Drivers should not assume that their vehicles will be seen simply because they are there. Some seasoned drivers who skid off the road will swerve into the nearest tree. At the Indianapolis 500 one year, the pace-car driver steered smack into the only barrier in sight, a referee's observation tower. This is an inexplicable but common phenomenon and not just on the highway. On a golf course, a bride stood behind a tree while her new husband drove a golf ball off the tee. He sliced it and hit the bride's leg. He later learned that the golf course groundskeeper and his fellow workers tried to hide off to the side, but balls hit them with uncanny regularity. In the quest for best practice, never discount an answer as unlikely. Test it first. These days, best practice in driving calls for lower speed and the use of air bags and seat belts. After air bags were introduced, drivers and riders felt secure. Many stopped buckling their seat belts. This reflects the assumption, not based on best-practice results, that air bags do it all. But testing shows that air bags work best for those who also use seat belts. Therefore, seat belts are a current best-practice element in safe driving. So we see that assumptions about future best practice are dangerous. In future-best-practice research, it is essential that you avoid preconceived ideas, however logical. Do all your homework, including questioning assumptions. The Quest for the Best It is easy to say that best practice is found in scores of factors, but the practical question is, where do you start your quest? If you are a manager, start within your own corporation, particularly if yours is a large one. If you were a shaving cream manufacturer, you would probably have several facilities worldwide. You should visit them all. You will find some do better work than others. So you will learn a lot internally, but without locating the future best practice. When you make these visits, you should quiz your people as to whom they know in other industries who have related practices that are worth studying. Give serious concern to what you have to be a lot better at in your process. Have you a quality problem? A cost problem? Both? You may find answers in a repository near at hand. Go to the library, and don't forget to use that biggest of all libraries, the Internet. Check for articles in which other people have worked on similar problems. It's no mystery: Those who work on future best practice like to brag about the good job they did. There's another major resource you can tap for free. After Malcolm Baldrige, the popular Secretary of Commerce in the Reagan administration, died tragically in a rodeo accident, the Baldrige Award was set up to honor him and business quality. The winners of the Award must release information concerning their accomplishments. Write-ups about the winners are fine public sources of information on best practices. Simply call the companies. There are also a number of databases devoted to best practices, most of which charge fees. Some of the leading accounting firms keep data on industries they serve. By referring to these data, you can find out who is doing what. Frank Zarb's Houston firm, The American Productivity and Quality Center finds databases that keep track of best practices. Profnet at http://www.profnet.com lists professors and other experts who are available to reporters and other researchers. So don't hesitate to go to academia for additional best-practice information. Professors at universities who are experts in their fields can be a bountiful source of information. The most knowledgeable professors are often brought in to companies as consultants. Some of these academics have observed hundreds of situations close at hand and probably still monitor some. They may be restricted by confidentiality agreements, but they can nevertheless tell you where to seek out future-best-practice ideas. But, even if they give you a dozen leads, you can be sure that you won't find all the best practices. When you visit those leads you got in academia, ask them to point you to other best-practice ideas they know about. To get the future-best-practice ideas you need, you may have to work with scores of other companies and organizations. You may find only one element of the best practice at each of dozens of companies. Not even every part of a given task will be done best by just one firm. Many different companies may each do one aspect of the process you are exploring better than any other. What this means is that if you can put these many perspectives together, you will have a better practice than has ever before been realized. Thus, you are not just matching a rival or a single organization when you develop a best practice by finding pieces of the process in various places. You are moving well beyond the former best practice because you are putting together a new best practice comprised of many individual parts never assembled together before. Finally, do not limit your quest to the United States and Canada. Very often the best practice, or at least elements of best practice, will be found abroad. Ever Onward Do not forget that achieving the future best practice is a continuing effort. When you develop a best practice, someone else will soon learn about it. Whether or not the word gets out, someone else will, in short order, figure out a newer, better process. It is routine for innovators to believe that once they have the current best practice, they are set for twenty years. In fact, you need to repeat the future-best-practice process search every year or two. In some industries, particularly high-tech ones like microchips, the future-best-practice quest has to be continual. Make your pursuit of best practice nonstop for a very obvious reason: Being good at this work can be a core competence that provides a very large and increasing competitive advantage. For example, the sooner you know what future best practice needs to be done next, the more time you have to develop and enjoy a new advantage. While pursuing future best practice, be circumspect about what you have been doing, lest you awaken a sleeping rival. Be sure you do not confuse your efforts with what others call best-practice research. They usually measure just a few comparative aspects, often small ones that won't be best practices by the time they are implemented. If you do your work on future best practice well and thoroughly, you will be able to identify: Several current best practices from outside your industry that your competitors are not yet using The current best practices in your industry being used by competitors Where both sets of current best practices will probably evolve as processes and in performance levels over the next five years A way to assemble many of those current and future best practices together in a new way that far exceeds the likely effectiveness of any existing organization in this area over the next ten years Most benchmarking people ignore all these lessons. But if you follow the path we have set out for you, you will be well on your way to exponential success. My Fleet's Bigger Than Your Fleet Perhaps no greater folly ever occurred in pursuit of best practice than that exercised by King Philip II of Spain when he assembled the mighty Spanish Armada in 1588. The Armada was to sail to England, invade, and seize the throne for Philip from the upstart Queen Elizabeth who was challenging Spanish hegemony at sea and in the colonies. Since Spain was far wealthier than England, this seemed like a simple task. All King Philip had to do was to round up a superior force and create a massive Armada to transport it, and a British disaster would fall naturally into place. But King Philip and his advisers assumed that he would be fighting a foe with ships and forces just like his and in ocean conditions like those experienced in Spanish waters. He picked the Spanish ship model as the best practice. His ships were massive. But they were also slow, and some were manned by inexperienced seamen. Some lacked guns and skilled gunners; others lacked ammunition. To top it all, King Philip named an unseasoned duke to lead the Armada. As the Spanish approached from the south, the British got to the windward of the Armada, forcing it into the English Channel, which can be very rough even in good weather. The British, with their smaller, more maneuverable ships and skilled sailors, had a marked advantage. They bested the Armada in three minor sorties even though they were outnumbered by two to one at all times, and many of Britain's ships were merely converted merchant vessels. The Armada soon fled north and dropped anchor off Calais. The British sent fire ships (vessels filled with gunpowder and set on fire) toward the Armada. The Spanish, in a panic, cut their anchor cables. Heading north, the Armada rounded the tip of the British Isles and sailed into monstrous winds off Ireland. Many ships foundered and washed up onto English and Irish shores. Half the Armada was lost and the rest limped back to Spain. What the Spanish thought was a best practice couldn't have been worse. Beware the excess confidence that comes with wealth and power. You may stop measuring and stop weighing practices to determine which are best. You may lose everything. Shaving the Stubble off a Bad Practice And you thought putting the toothpaste back in the tube was hard. --Anonymous Let's dream up a company that plans to make shaving cream and has decided to learn from future-best-practice research. As a starting point in looking for the future best practice, it would be great if the company could go to a competitor and look into the plant to see how the cream is made. But Gillette, the top shaving cream producer, will naturally bar the door. However, Gillette can't keep you from picking up its shaving cream at the pharmacy. You should buy all of the brands and see how the product you are making compares to them. Even though you can't get in your rivals' factories, that doesn't mean you can't test the shaving cream itself for potentially key data. But doing that is only the beginning of your odyssey. The shaving cream industry is large and powerful. It is intimidating. But it doesn't have a lock on the best ways to do every part of every process. Here's your problem. You want to put a large amount of product in a very small container. Hmm! The chemical industry is good at this. Chemical companies compress gases in hardened steel vessels, so that industry deals with higher pressures and greater densities than you will ever use with shaving cream. What's more, chemical concerns provide safety packaging. You need that, too. Chemists also know more about chemicals than the shaving cream industry does. You can also buy stable mix technology from the chemistry industry. You are not a threat to them. It may seem odd to turn to another industry to solve a problem. It is not widely known, but problems of crucial importance to a company or even an industry are often solved with technology that has existed for years in a different industry. To wit, the food industry has scrambled to reduce bacterial contamination after a series of food poisoning debacles. Having no homegrown solution, the industry turned to chemistry. It turns out, in fact, that DuPont had worked through parallel product integrity and purity issues years earlier. Subsequently and serendipitously, DuPont met representatives of the food industry. To the benefit of both sides, the problem was addressed and solved through best-practice product integrity methods. Be aware that your way of thinking about a problem, your mind-set, may stall you. In shaving cream, uniformity of product may be an important product quality. But actually, freshness is the primary concern. If chemicals degrade, the product won't function properly. This is a preservation issue. When you talk to the chemical company, stress that you want the first and the last shave from the can to be identical. Then the chemical company will seek out chemicals with appropriate, compatible shelf lives. If, however, you tell them you have a uniformity or mixture concern, but don't mention the issue of degrading, you might get only half the answer you need. There is much more to do. You have to contain the cream. You must check out the can companies. Ask about their most innovative products. They will welcome you because you are a potential customer. They want to help. With luck, they may need a client to launch a novel new can that happens to work well for you. Your next stop may be at the factories of manufacturers that make enclosures for the can top. Again, you are their potential customer. They are also eager to help you succeed. If you are wise, you will also consult industrial sources apart from chemistry, people with hands-on experience in the special problems of creating aerosol cans. You should do this work personally, asking many questions. You often won't be allowed to make actual measurements about the processes once you are in the plant of the support company. Even if you could measure the processes you like, you'd need your own equipment so that your measures would be comparable to theirs. But get details on every measure you can think of when doing your research. When it comes to marketing shaving cream, Gillette certainly won't help you. But others will. What you are trying to do is to market consumer products to men. There are related problems in selling men, say, cologne and briar pipes. You can go to such nonrival sellers for future-best-practice information. There are also marketing consultants who can help you find the best practice in the field. If you learn your lessons well, your shaving cream will produce much better shaves, be less expensive to manufacture, stay fresher longer, be perceived as the best by consumers, and command a premium price while you gain market share relative to your competitors. Ideally, competitors will not be able to duplicate your achievement for many years. You will probably use a combination of trade secrets, patents, exclusive licenses of technology, and sole source-supplier relationships to accomplish this result. King of the Hill Don't argue with him, he's a millionaire! --Anonymous It is natural to assume that the high-performing companies--the GEs, the Xeroxes, and the Microsofts--use only the current best practices, but that is usually not the case. The older the company and the bigger it is, the fewer future best practices it is likely to develop. Oddly enough, marginal companies tend to be better sources for future-best-practice information, the kind of information that can bring you 2,000 percent solutions, because low-end companies have serious cash-flow pressures. To survive, they have to focus on efficiency in all of their endeavors. They have fewer ingrained procedures. They are not in a manufacturing rut. They start with a fresh slate. Ergo, they tend to get better solutions. Microsoft was a teeny company when it got the contract to develop the operating system for the IBM PC. Founder Bill Gates quickly scanned the competition and found a program he could build on for only $100,000. Over twenty years, this program has added many billions of dollars in value to Microsoft and to Gates himself. I'm Smarter Than Henry Ford You can have any color you want, so long as it's black. --Henry Ford to buyers of his best-selling Model T automobile When you meet with others to study future best practice, be sure to ask "why" the actions that are taken are an advantage; otherwise you may misinterpret the answer. This quote from Henry Ford provides a good example of how we can misinterpret the basis of a practice. Ford is often viewed as having been insensitive to customers. Maybe. But he was actually reflecting the difficulties of putting a good paint job on a car in those days. Use any color but black, and the results were poor unless you paid a fortune for the work. A parallel situation occurs when American executives visit Japanese factories. Everyone notices that everything is highly compact, but visitors draw the wrong inferences. Knowing that land is very expensive in Japan, Americans figure they now know the reason for the compactness. Japanese executives will patiently explain (if you ask them) that the main reason for compactness is to ensure good communications among workers. The farther apart people are, the worse the quality of the products they make. So even in Japanese plants in the United States, the factory floor will usually be quite compact. Stallbusters This section will provide you with questions, perspectives, and directions for how to locate pertinent future-best-practice information, capture the key insights from that information, and identify how to move ahead of the rest of the world in the most favorable way to you. Look in All the Obvious Places for Future-Best-Practice Information You may not be familiar with data sources for future-best-practice information. Many of these sources are similar to those used by organizations to do legal, ethical competitor intelligence gathering. Where can you find future-best-practice information? Many seminars and books are available on this subject to help you. There are also service firms that will do the research for you. People who have written about these subjects in the past may also be helpful to you in locating sources that are publicly available. A good place to start is to call publication editors whose subjects cover the processes and subprocesses that interest you. What databases exist that already measure the processes you are interested in? What companies have been written up for excellence in these areas? Who do experts say are the best they have ever seen? Who do the best in the field pay attention to? Look in the Not-so-Obvious Places for Future-Best-Practice Information Experienced stallbusters know that looking in uncustomary places often turns up the best information, but that it can also be the most work. How do you identify an unusual source of information? Pick a meaningful sample of companies that could have processes like yours (from anywhere around the world and in different industries). Call each of them and ask several different people in the organization what they do and how well they think they do it. Go visit any that sound interesting to check them out. What is the best way to get information from another organization? When you visit a company with a current best practice, do not start with the CEO or his or her top aide in seeking data on best practice. Go to the firing line. For finance, see the top financial person, the CFO. If your best-practice issue is quality control, see the person who manages quality. Each specialist will have measurements in place and know who is most knowledgeable concerning that area in the organization. Talk with the people involved with the specific best-practice issue so you will understand what they think about the problem. They may give you a better way to think about what you are trying to do. We learn best by doing things. If you are seeking best-practice information about a product, ask for a chance to help turn out the product "hands on" or to work in a company lab. If at all possible, put your own measuring rods in place and measure personally. If you don't see the actual facilities that turn out the product and don't see how the item is manufactured, you can't draw sound conclusions. Be Prepared to Do Your Own Measuring How can you quickly determine if there is an advance here over what you have already learned elsewhere? Canny stallbusters will have already tested the answers that were received in the telephone conversations by asking clarifying questions. One such key question is: What can be seen and measured by doing a personal visit? If the answer is "not much," then you can probably do without the visit, unless you get access to more key people this way. Invariably, there will be one or a few items of information that can quickly validate the efficacy of the process you are investigating. For example, if you are looking for a computer help-desk activity that is remarkably efficient and effective, you should be able to visit and find one person sitting there with nothing to do. That follows because most problems have already been resolved in the past by the help desk. You could not see the help desk and its level of activity unless you visited. The company may also keep records that can help you understand what is going on. If the help desk claims to resolve problems quickly and permanently, there may be computer records to back up this claim. See if the company will let you review this information during your visit. Who should do the measuring? Have people do the measuring who will be using what they learn, once you are fairly sure you are on to something. This is important because these people will know what measurements to make in order to create valid comparisons, and no one will believe that the practice is any better unless these people report they found it so. For example, people who work on or with computer help desks will know that employees in companies may not be calling the computer help desk for other reasons. If the help desk is very ineffective, people may find it a waste of time to call. Or, it may be easier to call the manufacturer or software provider help lines for specific questions. On the other hand, the computer users may all be computer scientists who do not need any help. The computer help-desk measurers will undoubtedly do a user survey of some sort to test these kinds of measurement issues. Estimate How Quickly the Future Best Practice Will Change in the Future What kind of information do you need to make such an estimate? Here, you will probably have to rely on historical data, in part, to find out how fast progress has been occurring. Be sure also to ask your information sources about how fast they expect improvements in the future. Check with suppliers and experts to see what they say as well. Assume that these estimates are unduly optimistic, unless they are much faster than what has occurred historically. See if you can establish why the improvements are occurring. In the early days of semiconductors, people assumed that particular subprocess improvements would always cause all of the improvements. Actually, new improvements came from unexpected areas. The real limit to improvement speed lay in the goals that the organizations set for improvements. Ask what could change to make much larger and faster improvements possible. Ask about this subprocess when talking to people in parallel areas. For example, talk to customer market research people concerning what they think about shareholder market research. You will be able to tell from their giggles that most of what is touted now as best practices in shareholder market research was obsolete in customer market research practice by 1970. If the area looks very important, get expert help to sort through all of this. Be prepared to search high and wide, especially outside your own industry, for most of the key lessons. Use your own measurements on the processes you study that you will use in your own company later. Do not rely on the current-best-practice model's measures. When you're through researching the future best practice, you will have moved ahead of everyone else in your universe in understanding, and by a wide margin. But do not become overconfident; you will need to start the process again no later than within one or two years. Quotes / Reviews || Excerpt || About Us || Speaking for You || Services || Buy the Book || Master Process || Stall Reports || Newsletter || Job Search || E-Mail a Friend || Contact Us || Mitchell On Tour || 2000 Percent Puns || Home Copyright 1999, 2000 Mitchell and Company Mitchell and Company Developed and maintained by Interactive Media Advertising Group, Inc.