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No matter what your business issue\u00a0is, you can always find some \u201cbest practices\u201d to analyze, by examining the companies or organizations that have had the most success in\u00a0dealing with that issue. And many of us think that if we want to have more success ourselves, then all we really need to do is pattern our own policies and practices after those companies that\u00a0have already had success.<\/p>\n
If you want your company to do a better job when it comes to online marketing, then survey the most successful online marketers and note the strategies and tactics they have in common. If you want it\u00a0to be financially successful over a long period of time, then look for companies that have in fact accomplished this feat, and identify the strategies they followed or the traits they possess.<\/p>\n
In business, identifying best practices is a straightforward\u00a0strategy for improvement. Hundreds, if not thousands, of business books, management tracts, and business journal articles are constructed around the idea\u00a0that by carefully looking at those companies that\u00a0have been highly successful in any\u00a0given industry or task, other businesses can copy their strategies and practices in order to be successful too.<\/p>\n
But while studying best practices\u00a0sounds imminently logical, there\u2019s a fatal flaw in this kind of analysis, because it’s actually based on a logical fallacy. You cannot\u00a0predict how\u00a0effective any business practice will be in the future\u00a0by examining\u00a0its\u00a0past successes, unless you also look at its past failures.<\/p>\n
Imagine, just for argument’s sake, that you are trying to devise a strategy for getting more \u201cheads\u201d on your coin tosses. If you carefully analyze\u00a0a thousand\u00a0coin tosses by different people who\u00a0did get\u00a0heads on their tosses, you will\u00a0discover\u00a0that about 90% of them were flipped with the right hand, rather than the left, which makes right-handed coin tossing a best practice.<\/p>\n
Think that sounds ridiculous? Well let\u2019s say you were to read in some business guru\u2019s best-selling book that those\u00a0companies that have achieved the most exceptional growth in innovative fields tended to be those that were willing to face up to disruptive forces and \u201cbet the company\u201d on new and equally disruptive plans or strategies. The book then catalogs five or ten of these success stories, outlining each of their cases in more detail and drawing comparisons, point by point, which gives us\u00a0\u2013 voila! \u2013 a set of\u00a0best practices.<\/p>\n
It might sound logical\u00a0at first, but what if you could find ten other\u00a0companies that had\u00a0adopted the same\u00a0bet-the-company strategy and ended up going out of business, or being bought by their\u00a0competitors? This would mean that the\u00a0strategy isn’t actually a best practice at all. It’s simply a gamble not much different from\u00a0a coin toss.<\/p>\n
Rather than identifying\u00a0firms that have been\u00a0successful in the past and studying their practices, the right way to learn anything useful is\u00a0to start with a hypothesis about some business practice that\u00a0you think tends to make a firm successful, and then find a large sample of\u00a0companies that have adopted this\u00a0practice in the past, in order to see what proportion\u00a0of them were, in fact, successful.<\/p>\n
Of course, no books are written about failures, so failures are not as easy to identify. Few people are willing to talk at any length to a researcher, reporter or business writer about why they failed, or what it was like, and most business gurus don\u2019t seem very interested in documenting the universe of failures, near failures, and successes just to be more \u201cscientific\u201d with their advice.<\/p>\n
But\u00a0that\u2019s exactly my point. In most cases, the study of \u201cbest practices\u201d isn\u2019t scientific at all.<\/p>\n","protected":false},"excerpt":{"rendered":"
No matter what your business issue\u00a0is, you can always find some \u201cbest practices\u201d to analyze, by examining the companies or organizations that have had the most success in\u00a0dealing with that issue. And many of us think that if we want to have more success ourselves, then all we really need to do is pattern our… The Fatal Flaw in Studying “Best Practices”<\/span><\/a><\/p>\n","protected":false},"author":80,"featured_media":2241,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[408],"tags":[1037,1039,159,1038],"class_list":["post-2240","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management-leadership","tag-best-execution","tag-best-practices","tag-management","tag-statistical-data-analysis"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/2240","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/80"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=2240"}],"version-history":[{"count":1,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/2240\/revisions"}],"predecessor-version":[{"id":2242,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/2240\/revisions\/2242"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/2241"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=2240"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=2240"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=2240"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}