From K.M. to E2.0 – Part II – Best Practices

Here we go (finally!) with Part II of my little journey back in time. If you’ve missed Part I, just click here!

Today, every larger company has locations spread geographically, and even if it is the same company, usually applying the same business rules, one will find that some of these remote locations are more successful than others.

From the study of these successful units came the topic of “Best Practice” (BP), sometime also called “Best demonstrated Practice”.

Definition

While it might be hard to determine whether an action can be tagged as a “Best Practice”, defining the terms is not very difficult.

“Those practices that have produced outstanding results in another situation and that could be adapted for our situation.”

Why the interest in transferring Best Practices?

The APQC has identified five instigators that will bring a company to systematically identify and transfer BP.

• A compelling call to action: this happens when Management is sold on the idea that the only way the company will be able to do better is to implement in each unit what has worked best in any of them.
• A demonstrated success: compelling examples of success of one Division or Business Unit through the adoption of practices that have worked well for another one can create great support for more internal sharing and transfer.
• Decentralization and Downsizing: the decentralization of some responsibilities and the parallel downsizing of headquarters have brought many remote units to become the place where new practices are discovered. There is therefore a need to implement a way to share these new techniques.
• Benchmarking evidence: some companies find out through external benchmarking that better practices and results are achieved by their competitors. Sometimes these same external benchmarking even open the eyes of the company on its own internal great achievements.
• Recognition of the potential gain: imagining the gains a company could make if it brought every unit to a median level of performance, is also a great catalyst to launch a BP transfer program.

Why is internal transfer tough?

While there is a natural desire among people to learn, and make things better, a variety of logistical, structural and cultural hurdles cohabit in our organizations.

• Silo Thinking: many companies are unfortunately still organized in a way that pushes locations, divisions or functions to focus on their own accomplishment! A phrase that can still be heard quite often is “When it comes to bonus time, we play a zero-sum game around here. To get my share of the bonus pool, I have to take it away from someone else. Why should I share my best ideas?”
• Company culture: many companies still value personal technical expertise and knowledge, rather than the sharing of knowledge.
• The “Not-invented-here” syndrome: people tend to believe that if it was not created in their environment, a practice will not work. This is especially true between units located in different countries or regions.
• The lack of contacts, relationships and common perspectives among people who do not work side-by-side. A way of avoiding this hurdle is to create a directory similar to the Yellow Pages that will lead people in their search for a particular expertise. Organizing regularly venues where people can meet and get to know each others is also a good way (plus the effect this kind of event usually has on motivation and company culture).
• Not allowing or rewarding people for taking the time to learn and share and help each other outside of their own small corporate village.

The good news is that, when recognized, all of these problems are solvable!

The Process of transferring Best Practices

At the beginning, BP were mostly transferred by executives or managers whose career path regularly changed locations. Once in a new position, they could talk to their new people of process they had seen working in other places and tell them to implement them. This process, sometimes called the pollination model, tended to create sibling rivalry, “the other unit is doing better than you”, without providing enough information or motivation to adopt the practice.

Indeed, only ‘explicit’ knowledge (the one that can be written) could be transferred, while the real trick to a good transfer is to have both groups to talk to each other. The ‘users’ are the only ones really able to transfer the little things that make it work, and these were the people who were then transferred.

Today, four approaches are used for identifying and transferring BP:

• Benchmarking Teams
• Best Practice Teams
• Internal Audits
• Communities of practice

Let’s have a look at them …

Benchmarking teams

Benchmarking can be defined as the practice of identifying qualitative and quantitative metrics against which the success of an organization can be measured, often in comparison to competitors and industry standards , or, according to the APQC, as the process of identifying, understanding, and adapting outstanding practices from organizations, including your own.

These teams often start their efforts by trying to compare measures and results in order to identify Best Practices. They soon learn that comparisons of financial and operating performance are not enough: other factors can affect performance. The result is that many benchmarking teams spend a lot of time discussing whether they are really comparing “apples with apples”, and who is really the best, etc.

Best Practice Teams

Best Practice Teams are basically Benchmarking Teams that do not have a clear life span. They are more like a perpetual part of the organization, without being real departments.

Best practice teams are formed by grouping, at the corporate level, people from different divisions or business units. These groups then meet regularly and keep contact electronically between meetings.

In addition to this, Corporate can provide these teams with resources and expert supports.

Internal Audits

While the main purpose of Internal Audits is not the identification and transfer of Best Practices, it is evident that the auditor’s reports may include such findings. However, the problem encountered by the “BP sharing pioneers” (the relocated managers) will again be a hurdle to the transfer!

Communities of Practice

This fourth type of approach will be developed in Part III.

Creating the environment for transfer

None of these approaches will work unless the organization removes the hurdles and creates a suitable climate for transfer.

Environmental enablers can be categorized in four groups: technology, culture, leadership and measurement.
All four categories interact widely between each other. Technology, for instance, will work best if issues in other enablers are dealt with.

Enabler #1: Technology

Many technological solutions exist today that will help BP identification and transfer: groupwares (Lotus Notes, …), databases, e-mail clients, intranets, …

However, these will only help the process and will not be the driver of transfer, neither the only useful tool!
Indeed, the really important and useful information for improvement is too complex and subjective to put online! Also, no single Best Practice is suitable for every case, and everyone will have to use its own unique criteria to judge what is best for his problem.

The database will provide information about what has already been done, and about what may be a good solution. In fact users will most probably be presented with a set of “right answers” to choose from!
A good way to make these searches and choices easier is to build a framework for the classification of the information, using a common vocabulary. This lexicon will also enable people from different business units or departments to talk to each other more effectively.

As today’s world runs faster and faster, managers rarely have the time to compile and enter their Best Practices in the database. If this task is not made part of their job description, a good solution is to have each unit either designate a person responsible for entering the solution, or hire someone to do it.

Considering the heavy investments usually required by the implementation of computer systems, all these facts have to be carefully pondered when analyzing the eventuality of starting a Best Practice sharing program.

Enabler #2: Cultural Factors

This second enabler is probably the most difficult one to address.

Most of what Man did for ages was try to do better than his neighbour. The educational system stresses more individuality and competition instead of collaboration and sharing. How many times did a child hear “How did the others do?” when showing a seemingly good grade to his parents?

So how could one be motivated and rewarded for sharing his Best Practices?

On the other hand, Man is also a gregarious animal. Men have always grouped into families, clans and nations that have always tended to fight between themselves. And this has reflected itself in today’s organizations. So co-workers might resent one of their own being dispatched to another unit “that is not doing as well” to help it.

Taking a “helicopter view” will help us realize that some causes for the non-sharing are embedded in the way our companies are organized:

• Current financial measures tend to incentivize competition among units;
• Unit Managers rarely bear any responsibility for sharing;
• There is no common vocabulary to facilitate conversations;
• And, there is rarely a rallying cry for common purpose.

All of these points will only change with the support from the Leadership.

Enabler #3: The senior Leadership

It is not essential that leaders in the organization initially endorse the BP program, but it is of the uttermost importance that they do not kill the pockets of innovation as they occur!

Of course, if the

management takes an active and supportive role in the project, it will help the motivation of the whole organization. And as stated before, it is important that this support remains beyond the pilot phase, otherwise the very same motivation it has created will die shortly.

This supportive role should include such actions as:

• Have success stories told at each top-executive meetings,
• Help remove the barriers (psychological, physical, financial and organizational ones),
• Help promoting, recognizing and rewarding people who model sharing behaviour,
• Lead by example, show commitment to learning through action,
• Apply it to the whole organization.

A way of avoiding an early kill of the initiative by the management is to show the merit and real impact it had on the organization. And to do this requires ways to measure this impact.

Enabler #4: Measurement

Two types of measurement will be involved in internal benchmarking and transfer:

• Measuring performances to identify a Best Practice
• Measuring the impact of the BP transfer itself

As discussed, metrics will indicate what level of performance is possible and will help develop a business case, but they will not help to understand why a unit got outstanding results and how to reproduce it.

Also, a practice cannot be considered superior just because a unit has superior results. There are many situational and external factors that have had an impact. Conversely, a unit working in an adverse environment can show average to bad results using an outstanding process!

The sole utilization of metrics in a best practice benchmarking process might also end up in endless discussions, which will in the end effect slow down the actual transfer process.

A third kind of measurement, although a more difficult one, can be used in this type of projects: the measurement of the effectiveness of the processes used for the transfer.

But, how do you measure the value of internal databases or networks? Some techniques are currently being developed, such as:

• Measuring the frequency of use of the system, as well as the satisfaction with the information found
• Benchmark the cycle time to implement the best practices with industry standards. Some researches have shown that an average of 27 months were needed t implement a common Best Practice in a regular company.
• Assessing the growth in virtual teams and networks. A danger here is to mistake activity for results.
• Correlate an operational metric (sales volume, customer satisfaction, inventory,…) with the sharing of Knowledge or Best Practices.

Conclusion on Best Practices

• Focus initial efforts on critical business issues that have high payoff and are aligned with the organization values and strategy.
• Do not forget that an organization can only invest in and support a finite amount of change at any time.
• Do not let measurement get in the way. Many organizations fell in the trap of the so-called “Paralysis by Analysis”.
• Change the reward system to encourage sharing and transfer. The internal transfer is a people-to-people process that usually requires personal generosity or self-interest.
• Use technology as a catalyst and do not rely on it as a solution.
• Leaders need to constantly spread the message that sharing is important, and show the way themselves.

So, is there a link to E2.0?

Of course there is! What a silly question … ;o)

Best practice sharing will be even more enabled by Enterprise Social Tools.

The first that comes to mind is the wiki, which will allow best practice teams (or, even better, just about anyone in the organization) to describe and document the best practices. This could be done in a specific ‘Best Practices’ workspace or not, that will depend on the organization. If the wiki engine is relatively recent, it might even provide with a rating solution (most generally stars), that will allow readers to show how good the idea is, and also should lead to establish a sort of best practices top 20 or something …

A blog could be used as well, the department/unit/team that has found a best practice to share could tell about it on its blog. But that wouldn’t be really helpful unless these posts are tagged and/or socially bookmarked as ‘Best practice’.

Better, there could be regular posts about what is happening in the department, without necessarily having a focus on BPs, readers would then decide for themselves if what they’ve just read is a BP for them to implement or not. Even if the publishing team did not see that part of their activity as a best practice in the first place …

So Enterprise Social Tools can help Best Practice sharing … but I find even more interesting is that the 4 enablers of a best practice sharing environment will work as well for creating an Enterprise 2.0 culture! That’s what I call killing two birds with one stone … or maybe are we talking about one and only bird? After all Knowledge Management, Best Practice sharing, Communities of Practice, Enterprise 2.0 are all about sharing!