Whats Good for the Goose Could Cook the Gander

Best Practices: How to spot them, how to evaluate them, and when to ignore them

Contents

Chapter 1: Google: One of Americas Preeminent Companies and a Great Business Success Story 1 A critical examination of Google, its business practices, and how the company serves as a role model for others.

! Chapter 2: Finding Solutions in Unexpected Places ! Chapter 3: How Cisco Became a Networking Giant

9 How GM reduced warranty costs through the application of a business practice discovered at Atlantas Centers for Disease Control and Prevention. 17 What we can learn from Cisco, which made mergers and acquisitions an art form and leveraged strategic alliances to become an economic powerhouse.

! Chapter 4: Repeat Performers: Organizations That Appear to Be Unendingly Successful ! Chapter 5: Which Best Practices Might Actually Work for Your Company? ! Chapter 6: When Do You Need to Be the Best? ! Chapter 7: Becoming a Best Practice Leader

25 Why are some companies seemingly successful year-after-year while others make a big impact and then fizzle out? 33 Which best practices are well-suited for your company, and why should you consider rejecting most of them? 41 Its too cost prohibitive to be the best at everything. This chapter describes where to focus your attention and resources. 49 Reaching that goal takes a lot more than simply declaring your intentions. This chapter discusses how its done.

! Chapter 8: The Ten Characteristics of a Winning Best Practice 57 At the core of the matter, these characteristics define best practices that endure. ! !

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Chapter One
Google: One of Americas Preeminent Companies and a Great Business Success Story those sessions, I listened in as two of the newest members of the team discussed benchmarking business practices.

! I was leading strategy sessions for senior executives at a clients hideaway retreat. In one of ! Tom, general manager for one of the companys smaller divisions, advocated selecting role
models such as Google or Microsoft, discovering what they did best, and adapting their most productive business practices for his division carte blanche.

! Sharon, vice president of engineering for the companys main division wasnt as sold as Tom. She advocated caution. ! Tom shook his head. Cmon, Sharon, youre telling me that our company cant learn from
some of the giants of American business, companies that have flourished in good times and bad, companies that turn in record sales and profits quarter after quarter, year after year, regardless of circumstances?

! I didnt say that, Tom. Sure we can learn from what other companies have accomplished, ! Tom smirked. Bet youd love to own one one-hundredth of 1 percent of the market

and not always from the giants. Smaller companies can be role models, too. What Im suggesting is that whats good for IBM, or any other company for that matter, isnt necessarily good for us. capitalization of Google or IBM. You could buy that fabulous estate in Palm Springs you dream about, along with a dozen other homes, and your own private plane to ferry you back and forth. a proponent of the structure that debaters use to frame arguments; the confrontational aspect exposes weaknesses in both sides of an argument that otherwise would remain unexamined. In this case the argument was: Be it resolved that business practices to benchmark are best found in iconic companies. Of course, the counterargument challenges that assumption. Tom argued for, and Sharon argued against. I planned to step in at a propitious time so all three of us could summarize our conclusions and arrive at a consensus.

! Let me jump in here and mention that I arranged this mock confrontation. I have always been ! Tell you what, Sharon, Tom said. Lets get specific and focus on Google. I think we can both agree that Google is one of the great American success stories. ! Agreed. ! You cant argue with the fact that in fourteen years since its founding, Google has grown to almost $10 billion in sales, a truly remarkable achievement. ! Im not arguing against facts, Sharon said. ! Tom plowed on. Nor can you challenge the fact that Google is the dominant search engine

for the Internet. Nobody, Yahoo! included, even comes close. The name Google is synonymous with search. Thats uncontestable, but

Tom held up his hand, palm facing Sharon. Let me finish. Google is also one of the great innovators of our age. Google page-ranking algorithm, Google Books, the Android operating system, Google EarthI could go on and on.

! Please, dont. Let me get a word in edgewise. ! Tom laughed and said, Be my guest. ! My point is that our company just cant adopt Googles best practices without first taking a close look at every one of them to see if theyre suitable for us. ! Tom shook his head. Thats more of an opinion than an argument. ! Then how about this? You stressed Googles superior innovation practices. But do you really

know what they are, and do you understand the potential complexities of developing our best practices by benchmarking Google?

! Sharon, you do agree, dont you, that Google is a bright, shining example of the best in American business? ! Sharon shrugged her shoulders. Sure, but that doesnt mean we should blindly accept their methods as ours. ! Before either could say anything else, I halted the discussion, sensing that Toms forceful personality was overwhelming Sharon. Why dont we stop here for a moment? ! Sharon looked relieved. Tom said, Well, who won the debate? ! I smiled. You did, Tom, but only narrowly. Sharon, you made some cogent points, but didnt support them with examples. That neutralized your argument. ! Tom smiled and nudged Sharon. ! But Tom, you were taken in by the halo effect. ! Tom sighed. I was afraid Id be tagged with that. ! ! The halo effect. How does it impact best practices? Let me begin with an example from the

halcyon business days of the fifties. General Motors ruled the automotive world as the number one manufacturer of cars and trucks. The company managed its far-flung operations through a complex matrix organizational structure. Many other less successful companies, in awe of GMs power and success, tried to imitate the same organizational structure to their detriment, not realizing that what was good for General Motors was not necessarily good for anybody else. Many of those copycat companies loaded up on unneeded employees and staff functions in the false hope of replicating aspects of GMs business. Their results mostly fizzled. Those companies are prime examples of victims of the halo effect: futilely attempting to copy business practices from iconic companies, simply because those companies are successful, but without critical examination of how those same business practices will work in their (read: your) organizations. In more direct terms, theyre dazzled by the results realized by icon companies and accept without reservation their business practices.

Now switch your frame of reference to todays business world. Well focus on Google, although we could just as easily have picked any number of thriving companies, such as Microsoft, Apple, GE, or Disney, to discuss the same issue.

! If you drive to the heart of the matter, the question becomes: What can we really learn from
Googles success? That leads to other related questions: If you select innovation as a best practice to emulate, what specifically do you mean? Is it that Google developed the mostused search engine? Or Google Maps? Or any of its many other products and services? If so, how do any of the business practices Google uses to sustain them apply to your company?

! Few would contest that Google perfected the business of using search ads to generate

revenue. In fact, the companys dominant revenue stream comes from advertising. Certainly, there are best practices that other companies can apply from Googles experience. Perhaps if you work for an online company such as Yahoo! you might profit from them, but how many others, if any, have the wherewithal to take advantage of how Google innovates?

! Many have idolized Googles founders, Sergey Brin and Larry Page. Is dropping out of a Ph.D. ! Taking a look at this another way, if an iconic manufacturing company produces its products ! Googles performance metrics include cost per click, click-through rates, and return-oninvestment. Only companies in comparable businesses will be able to benchmark those metrics, and perhaps not even then.

program, which both did, a best practice to be emulated? How about Googles inability to articulate its value proposition to Yahoo! when it proposed a joint advertising agreement? The deal fell apart. Would you characterize that as a best practice? How do you really define a best practice to begin with? Can you even declare something a best practice after so few years in existence? Shouldnt a best practice be time-tested before declaring it invaluable and transferable? with the most technologically advanced equipment, and your company uses older equipment to produce the same products, can you rightfully benchmark business practices the icon uses to achieve a 2 percent rework rate when your rework rate tops 5 percent? The type of equipment, as well as a host of other factors, will influence each companys business practices.

! Google has yet to prove its a repeat performer. Wildly valuable, the company has made some ! Shortly after the Time Warner merger with AOL, I met with the vice chairman of AOL who had
been CFO of Time Warner. He said to me: Dave, these people [AOL management] think theyre the most innovative people in the world. As far as I can tell, theyve only come up with one innovation: Its called AOL. AOL was a one-trick pony, and we all know what happened to AOL. The rest of the book will explore these questions, challenge the statement made above, and examine where to benchmark best practices and performance metrics that are best suited to your organization.

solid acquisitions like YouTube, but does that make its approach to innovation a best practice? You could make the case that Googles approach to innovation has become very expensive and dependent on the Google platform to succeed. That places it out of reach for most companies with limited resources.

! ! ! !

The bottom line is that if you want to be number two or number three in your industry, you can look for best practices from others, but if you want to be number one you cannot. You must define the new best practices yourself. You certainly can look elsewhere to gather ideas, but you cannot allow a companys success to blind you to this reality: Their best practices may not fit your business model. They man not turn

//David Silverstein is the CEO of BMGI, which he founded in 1999. Since then, he has grown the company to an internationally recognized and highly respected firm specializing in business performance, strategic planning and innovation. As CEO, David drives BMGI's strategic direction with a focus on continuously improving existing offerings while constantly searching for the next generation of business excellence methods, tools and practices. Recently, David has turned his attention to innovation and business strategy and the identification of cutting edge solutions.

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As a highly regarded public speaker and author, David shares his vision around the globe where he has shared the stage with notable figures such as Jack Welch, Larry Bossidy, Jim McNerney and Steven Covey. A sought-after thought leader, he has written on innovation, performance and business leadership for numerous publications including BusinessWeek, Inc. Magazine, Wall Street Journal, Forbes, American Executive, Worth Magazine and BP Trends. David has also authored several books on innovation and business leadership, most recently publishing additions to the Connect the Dots Series. To learn more visit DavesDots.com