Best Practice is Not Good Enough

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Many organizations are eager to learn and implement best practices. However, simply trying to replicate what works in another organization is bad practice. Wal-Mart’s much-publicized $1.85 billon mistake is a timely reminder.

Project Impact was launched in 2008 to de-clutter stores and reduce inventory in “a drive to make Wal-Mart look more like Target”. Led by a former Target veteran who has since left Wal-Mart too, the initiative cost an estimated $1.85 billion in lost revenue. Millions were also spent on remodeling stores that are now doing a U-turn and re-introducing ‘clutter’.

So, what went wrong?

Wal-Mart’s previously packed and messy stores created the perception of ‘good deals’ and ‘better value’. While shoppers enjoy clean aisles, they also associate it with more ‘expensive’ shopping. Wal-Mart tried to adopt Target’s best practice by stepping up a key perception point (clean aisles) to “hang on to Target shoppers who traded down to Wal-Mart during the recession”.

Unfortunately, this effort to copy Target inadvertently – and negatively – affected the perception of ‘best value for money’ that Wal-Mart’s core customers strongly associate with the retail giant. And the reduced number of available brands as a result of lower inventories affected another key attribute customers value about Wal-Mart – its wide selection.

So, what’s the important lesson here?

Learning from best practice is admirable, but blindly implementing someone else’s best practice may not be right for you. When you seek to upgrade your service to customers, you need to consider improvements in the context of what your customers value most.

For organizations seeking to build an Uplifting Service Culture, you need to think even more carefully about what your customers, your team, your partners and your community really value. Disney built a great service culture for family fun and entertainment. The Ritz Carlton maintains an impeccable culture for high end hospitality. And Zappos is ideal for online shoes and apparel.

But that doesn’t mean their best-practices are the right practices for you.

Posted On: 26 April 2011
Categories: Service Benchmarking
Tags: , , ,


13 Responses

  1. Vimal says:

    Good, crisp piece.

    I do feel however that hind-sight is 20-20 and, given that history is very often the prerogative of the victorius, it becomes quite difficult in practice to recognise “good” innovation from “bad” innovation.

    The idea that one should only innovate/change with relevance to creating and delivering value that customers will appreciate and be willing to pay for, is obviously sound. But in reality, it is so, so difficult to get this thinking right. In the case of Wal-Mart I doubt if many would have bet against the idea of having less cluttered aisles and a smoother shopping experience. That, combined with the same inventory scope and pricing (or even lower pricing!) would have been a killer combination, arguably.

    Having said that, understanding your customer is vital to any business. And here’s a wild thought – perhaps there are some “negative” things (read: cluttered shopping aisles) that your customers actually appreciate! Dare we think in such a manner?

  2. Anand Prakash says:

    Absolutely well said. Aping is not best practice deployment. Best practice deployment needs wisdom to align/customize the best practice before initiation of deployment.

  3. Nandu More says:

    I agree, blind adoption of any thing be it technology, process, system or business model is not good. It is always contextual for your OWN business The question that I have for you is – is there a scientific way, well thought through model for Best Practice identification and then implementation.

    Regards.

  4. Niiraj R Shah, BNI India says:

    Ron – agree completely. I know that one of the things we have done when looking at best practices is looking at the cultural fit and also understanding the relevance of the practice given the stage of growth we are in at BNI India. I believe culture eats strategy for breakfast. The best practice needs to be aligned with your culture.

  5. Maren Perry says:

    Focusing on YOUR customers is the key, rather than trying to please someone else’s customers by doing it how they do it. Customers will find you if you do YOUR thing the best it can be done.
    What’s wonderful about your work, Ron, is that outstanding customer service is available at all levels — it may look different at the Ritz Carlton than at Walmart, but it’s possible to have a great service culture anywhere!

  6. H.khraim says:

    I do really agree with you but still I believe that some times the problem might not be in the best practice adoption as much as it is in how do we apply it. Such a change was supposed to be managed by proper means such as customer awarness scheme and empolyees involvment. And different issues should be taken into consideration to customize the best practice to the need.

  7. Linda Lea Larson says:

    Great discussion! I have always complained that “best practice” devotees seem to think that there is a silver bullet that will solve any problem and fit any culture. In reality, you need a quiver filled with a rainbow of arrows that can be adapted to fit each target.

  8. Charles Tang says:

    @Vimal – Understanding your customers and knowing what they value is indeed vital, especially when different customers value different things!

  9. Charles Tang says:

    @ Anand and Niiraj – Well said. We have to consider best practice in the context of each organization’s own situation and objectives.

  10. Charles Tang says:

    @Nandu – Great question! I am not aware of a model/method for identifying and implementing best practice. Is there any you wish to share?

  11. Charles Tang says:

    @ Maren – Thanks for your kind words. Ron is always inspired by people like you, who take the ideas we share and turn them into ACTION to uplift your customers, your team and your community.

  12. Charles Tang says:

    @ H.Khraim – Yes, adopting a best practice includes adapting it to your needs!

  13. Charles Tang says:

    @ Linda – Great point. Best practice is not a ‘sure bet’ and definitely not a silver bullet!



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