Insights - Putting Best Practices into Context.

Putting Best Practices into Context.

by Dr. Thomas Papanikolaou on November 06, 2013

A best practice, according to Wikipedia, is a “method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark”. This definition exemplifies one of the approaches to defining best practices which usually emphasise a combination of the following aspects:

  1. reusable functionality e.g. through idea & knowledge databases
  2. method / process optimisation e.g. through benchmarking
  3. innovation & transformability e.g. by motivating replicability across many areas

Further important aspects exist as well. For example, in his 2010 talk The Myth of Best Practices, Diego Piacentini describes Amazon's emphasis on the aspect of business model uniformity by stating: “In our business model everything is equal unless proven with data that it needs to be different”.

With our lives, businesses, and social fabric in constant transformation, it is a key observation that the lifetime and validity of best practices is rapidly diminishing. For example

  1. Manufacturing has seen a lot of optimisation in terms of materials and processes. With the introduction of 3D Printing which current best practices are still applicable, which can be evolved, which need to be completely discarded?
  2. Search-Engine Optimisation (SEO) has been the main process to enhance web presence visibility through actions that increase its relevance to specific keywords, and achieve higher ranking with search engines. With Google moving away from keywords and towards natural language search, which SEO best practices are still valid, which need to be changed, and which ones become irrelevant?

The insight resulting from these observations is that best practices have to be reformulated and implemented in a way that acknowledges the new, changing, and often real-time context we live in. A transferable example of how this can be accomplished is found in telecommunications technology and Self-Organising Networks (SON). SONs is an automation technology designed to make the planning, configuration, management, optimisation and healing of mobile radio access networks simpler and faster. In operation, mobile network base stations will regularly self-optimise parameters and algorithmic behavior in response to observed network performance and radio conditions. The SON best practice lies in an iterative, data-driven, self-optimising, real-time approach. Diametrically opposite to Amazon's approach, the SON operating model presumes constant change, unless data proves it is not required.

A “NEW” DEFINITION.

In this new context, a best practice is an iterative execution of a method on a data set, delivering new data sets that are subsequently used to improve the method and refine the initial data set. In other words a best practice is a function of data, method, process, perpetually iterated to create more accurate data, a better method and a more optimised process. More and more, such iterations need to be executed in real-time.

This definition makes clear that

  1. a best practice is only best at a specific point in time, within a specific knowledge set and a given method / process.
  2. a best practice requires a learning loop and repeated execution to remain best.
  3. the ability to execute a best practice is as important as the underlying method or process.

The latter is a frequently neglected yet highly significant aspect: to transfer a best practice from A to B without loss, B must have the ability to execute the iterations with the same level of skill as the originator A. Coming back to the The Myth of Best Practices, this is the reason why Amazon in 2010 decided to own the logistics of the last mile delivery in China, but relied on well-established logistic companies in the US.

BEST PRACTICES 2.0

The tools to implement best practices according to the new definition are readily available. We previously touched briefly upon those while discussing Big Data, Analytics, Actionable Business Intelligence. By applying Big Data and Analytics methods on accumulated knowledge (e.g. idea & knowledge databases, supply process chains, etc) it becomes possible to enhance existing practices with a feedback and learning loop, that will allow for optimisation at every subsequent iteration.

Here are two long-existing examples that demonstrate how Big Data and Analytics are applied to implement the “new” best practices definition (albeit in a narrower context):

  1. Dynamic Tariffing is an adaptive pricing best practice, that is able to offer a mobile network customer a discount if there is unused capacity available at their current location in the network.
  2. Google real-time analytics is an example of a feedback and learning loop best practice. If and when an organisation uses this feedback to automatically and iteratively refine its marketing campaigns, this enables a self-optimising marketing campaign best practice. Disclaimer: to our current knowledge, optimisation is today often a manual task.

Introducing this way of operating into an organisation is a non-trivial task, as it requires establishing a culture focusing on perpertual optimisation. Carl-Henric Svanberg, Chairman of BP and a former Ericsson CEO, instinctively captured the need for acknowledging perpertual change as he coined the statement “what brought us here, won‘t keep us here”. Based on our experience, and the examples we listed in this article, we affirm his statement.

Summarising

  1. A best practice is an iterative execution of a method on a data set, delivering new data sets that are subsequently used to improve the method and refine the initial data set. In other words a best practice is a function of data, method, process, perpetually iterated to create more accurate data, a better method and a more optimised process. More and more, such iterations need to be executed in real-time.
  2. Big Data and Analytics can provide the enabling technology to enhance existing best practices with a real-time, learning loop.
  3. Implementing best practices in a real-time context mandates a culture and organisation built for perpetual optimisation.

CREDITS & REFERENCES

For the avoidance of doubt, Neos Chronos are not affiliated with, and have no financial interest in any of the companies mentioned in this article. All names and trademarks mentioned herein are the property of their respective owners. Please observe the Neos Chronos Terms of Use.

  1. Wikipedia: Best practice, 3D Printing, Search-Engine Optimisation (SEO), Dynamic Tariffing, Carl-Henric Svanberg
  2. Arnošt Veselý: Theory and Methodology of Best Practice Research: A Critical Review of the Current State
  3. Diego Piacentini, Amazon: The Myth of Best Practices
  4. Google: Analytics

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