​If there’s a time to look at best practice for your business, it’s now.  Businesses are basically being told – if you want your business to survive and thrive Covid-19, you must also start looking ahead to what the future brings and pivot your business. This is because doing business after Covid-19 will be different and you must adapt or suffer the consequences. Instead of rushing in and changing for the sake of change, have a look at current best practice in business and check out if it’s going to work for your business.

WHY CHALLENGE BEST PRACTICE

Best practice is defined in the Cambridge dictionary as “a working method or set of working methods that is officially accepted as being the best to use in a particular business or industry, usually described formally and in detail.”  By inference, therefore, the best practice arose either by research or was deduced from experience to have produced the optimum results and should, therefore, be used as a standard for all to adopt. It has become THE way of doing things. It should be what all of us strive to achieve. However, it also tends to be used by some to defend their position on why certain things are done in a particular despite the results proving otherwise. Best practice is not always the way to go – especially today, when the “norm” for business is no longer the norm.

Don’t get me wrong. I am not saying that we should ignore ALL business best practices. In fact, this is usually where I start when I have to implement ways of improving results. The “easy” part of achieving success often comes from using best practice. In my role as a mentor and coach, this is the logical place to measure my client’s performance against. However, this should not and must not be the end goal.

LIMITATIONS OF ADOPTING BEST PRACTICE

Let’s look at this concept of “best practice” in context. The fact is that those acknowledged best practices do have limitations. They were generally practices that arose out of a specific set of circumstances that may or may not apply to you today. In addition, it is by definition, a practice that has had consensus agreement as being the “best”, which can sometimes mean that it is a reflection of the view of the sum total i.e. the average. Do we actually know the exact circumstances and criteria that applies to the espoused best practice?

For example, let’s look at digital marketing. Best practice today says that information sellers should drive all their customers to a landing page to sell their product. So new marketers slavishly follow this “rule”. Then someone decided to challenge the best practice and, instead of driving his customers to a landing page, he drove his customers direct to his shopping cart. By all accounts, he did incredibly well. In this particular case, slavishly following best practice did not give him the best results. We forget that in marketing the number one rule is actually to test, test and test again. Best practice is not always the best practice! Industry leaders do not become leaders simply by always accepting the best practice as the ultimate goal. They pushed the boundaries of what could be. They challenged “the rules” and guidelines and eventually, their breakthrough became the accepted best practice.

test the watersThe number one marketing rule to test, test and test applies to everything else too – not just marketing. In my early days of running my accounting practice, we were always told “everybody” charge employees out at three times their salary. One-third to cover their pay, one-third to cover overheads and one-third to contribute towards profit. That formula assumed that charge out rates would be based on dollars per hour. However, what happens when (or if) a firm switch their pricing policy to charge based on outcomes. Suddenly, the best practice formula no longer works.

Having a goal of achieving “best practice” also implies that once we achieve best practice, we have done the best we can and therefore, we can stop. It also implies that no sane and sensible person would challenge “best practice”. But we must challenge it and be prepared to test the waters.  Napoleon Hill said, “Whatever the mind can conceive and believe, the mind can achieve.” Creativity in looking at the HOW is the key. It is only through challenging the accepted “best practice” that we can truly grow and improve.

HOW TO IMPLEMENT BEST PRACTICE

1. Do Your Research and Stay Informed

Before you rush in, spend time and do some research on current best practices. The internet has made this so much easier compared to the dinosaur days. As I like to say, “Google knows all”. Just google “what is the best practice for … “. The biggest problem will not be the lack of information, it will be the information overload.  However, just take your time and sift through to mine the gold from the information that Google throws at you. The time spent here will be well worth it. Once you’ve narrowed down the WHAT you want to do, then google the HOW and repeat the process.aesop fables

2. Slow Down to Go Fast

In looking to pivot your business, my best advice to you is to slow down if you want to go fast. That is an oxymoron if ever there was one!

How can you go fast by going slow? The best analogy I can think of is a phrase that carpenters use when they train their apprentice. Measure twice, cut once. And there is a good reason for that. The impatient apprentice just wants to get it done and move on to the next exciting part of training. But in the rush, the measurement is out by possibly just 0.5cm … That’s a lot when you’re putting together a kitchen that has to fit together perfectly. The whole kitchen bench has to be thrown out and, in the meantime, work comes to a halt because we have to wait for the order to arrive. And that’s a true story. I don’t know how many buildings I’ve seen where extra timber or steel had to be ordered because a young trainee was in a rush.

As a child, you may have heard the story of the Tortoise and the Hare (Aesop’s Fables). The speedy hare was challenged to a race by the slow tortoise. Surprise, surprise! The tortoise won the race. How can that be? If you’ve never heard the story, do go and read it. Aesop’s Fables date back to the 5th Century BC and each of the short stories illustrate a particular moral. Aimed at children, the stories nevertheless can also teach adults lessons too. In this case, “slow and steady wins the race” – it doesn’t say “slow and stop wins the race”.

3. Planning is Everything

The tendency is to push through the changes because it’s your business and you believe your employees should just accept whatever you want to do because it is, after all considered “best practice”. That is a recipe for ensuring that the change will not happen. Why? Because you’re dealing with people who often have a vested interest in keeping things “as they were”.  Change is uncomfortable. With a bit of planning and not so much rush, implementing any change can be a smooth process if you address the issues that will prevent change in the first place or arise from the introduction of any change i.e. mistrust, misunderstanding and misinformation. go slow to go fast

4. Persistence Wins Every Time

The tortoise won the race because he kept going – one step at a time. He didn’t stop until he got to the finishing line. Napoleon Hill said, “Persistence is … to the character of man what carbon is to steel”. Lack of persistence is one of the major causes of failure and is a weakness that’s common to the majority of men (including me!). So often we give up once the going gets tough. We try something new and it didn’t work as we thought it would. What do we tend to do? Give up and go back to the way it was. There is no substitute for persistence EVER. If you’ve been in business for any amount of time, you know what I mean! Implementing new best practices and systems will often test your patience.

5. Talent is Not Enough

In looking at the changes you would like to implement, you may consider that you have a very talented candidate that would be perfect and ideal for your project. However, talent will definitely not enough. In fact, it could positively be over-rated when trying to implement change. This is one of the most difficult things to do in business because you’re dealing with people. People have foibles – which may or may not impact on your project. But it does need a leader who knows how to manage the change. PETER DRUCKER QUOTE

Edouard Pailleron said “Have success and there will always be fools to say that you have talent”. How often have we heard people say “Oh, he is so talented” when they watch a pianist play a very difficult piece of music. What we don’t see are the hours of practice it took.  While there are true prodigies, they are few and far between. I know extremely talented people who are not successful. I also know many people of “average” talent who are extremely successful.

AREAS WHERE BEST PRACTICE MUST BE IMPLEMENTED

Implementing best practice is not as difficult as it sounds. Much of it lies within the administrative and operations area. It’s a case of looking at current practice and asking HOW can we do this better. IT is a problematic area, as is wastage. Many business owners believe that waste is inevitable. It doesn’t have to be. Even in the best organisations, waste can be as much as 15% of the operating costs. In poorly managed organisations, the wastage can be as high as 30% … this “inevitable” wastage goes straight to the bottom line – YOURS! You may as well get out a wad of notes and put a lighter to it.BURN YOUR MONEY

Best practice organisations such as the Toyota Motor Company, have identified the 7 wastes in operations. The list below is just some of the accepted best practices that I have adopted for my various businesses at various times:

1. Over Production

What happens when you over-produce? In (say) a restaurant, the answer is simple – the food is simply thrown away. In other types of businesses, this could result in storage costs, excessive lead times in a production run, etc. Peter Drucker said, “What you can measure, you can manage”. HOW then do you measure over-production? What Key Performance Indicators (KPI) and Critical Success Factors (CSF) must you measure and what best practice can be implemented to stop this?

2. Waiting

How often have you seen your employee just “hanging around” waiting for someone else to either finish his/her part of the work so that he/she can carry on with his/her work, or waiting for you to unglue the phone from your car to answer a question, etc. Cost that one out! If you’re paying that employee (say) $50,000 a year, and that employee spends (say) on average 1 hour a day “waiting”, you’ve just spent $6,250 a year (i.e. $50,000/48 weeks/40 hours per week). OK, so most employees are not “waiting” for an hour … or are they? This one happens regularly in the professions. The junior goes to the senior’s office to ask a question. The senior is on the phone, so he/she signals the junior to take a seat. 15 – 20 minutes later, the senior finishes the call. Multiply this out over, say, 100 employees, for say, twice a day. That’s A LOT of money wasted!

3. Transporting

Think about the layout of your office or business premises. Do your employees regularly have to walk from one end of the office to the other? Are multiple deliveries being done and can this be reduced without affecting the “waiting” time? Can your filing systems be organised more efficiently? The worst thing you can do? Store your archives off-site! Now you can add on the cost of paying the storage company to retrieve any information you need.  Sod’s Law says that you will always need to access the very file that you have JUST archived!

With the move towards computerisation, this is becoming less of a problem for many businesses. However, that in itself creates its own problems. Have you tried to find a file that has been saved by one of your employees to some magic secret folder that no one knows about?

4. Inappropriate Processing

Is there any unnecessary overtime being done that you’re paying for? Is a Manager doing the work of juniors and you’re therefore having to employ 2 Managers where one will do? Does each employee know exactly what his/her job entails? Or are they guessing and maybe doing jobs that are not necessary or can perhaps be done more efficiently by another means. Bear in mind though, this can in itself create inefficiencies. Civil servants have been known to refuse to do a task on the basis that it is “above their pay grade”.

5. Unnecessary Inventory

What is the level of your stocks or work in progress? Can work in progress be billed out more quickly? Do you need to carry such a high stock level? The higher the stock level the greater the chances of having to “scrap” unwanted stocks. This is a classic in a Fruit and Vegetable retail shop. Buy too much and you end up having to throw it all away. That 400% mark-up can very quickly turn to a 20% loss. In one of my previous business, we measured the stock that was thrown away – the amount was SCARY!

6. Unnecessary motions

How many times do your employees have to get up from their desk, walk to the printer or photocopier each day? Apparently, a time and motion study showed that the average employee goes to the printer/copier 61 times per week. My guess is each trip to the printer takes at least 5 minutes. A large legal firm apparently saved $100,000 by giving each employee their own printer (instead of having a “central” printer locations). The new best practice by the legal practice of “keeping the employees chained to their desk and working” made the partners a lot of money!

7. Defects

This is probably the easiest to identify if you’re looking to implement best practice. Time cannot be charged out because you have to re-work as a result of a “stuff up” or your product has to be thrown in the bin because you didn’t do it right the first time or you missed the deadline. Or worse still, you lose the order and/or the client. This area is probably best addressed by training and more training.CYBER SECURITY

8. Cyber Security

And finally, a new area that is posing the biggest headaches to businesses – cyber security. What would you do if you walk into your office tomorrow morning and you find that your computers have just caught the dreaded virus? Or some computer hacker’s been into your system and messed it up. If you believe that it’s never going to happen to you, then think again! The cyber attackers are getting better at their job. Look at what is happening around you. In mid-2017 200,000 businesses in 150 countries were hit by a massive ransomware worm that disrupted operations at car factories, hospitals, shops and schools. It can happen again. Remember, you’re not that special that you will be ignored.

It’s probably not cost effective for you to have the same super high security level used by the likes of NASA or the government.  But you can do a lot in your day-to-day to minimise your risk without breaking the bank. There are some basic best practice rules that can be implemented:

  1. Don’t give individuals unrestricted to your computer systems.
  2. Have everyone treat their passwords like a toothbrush – don’t let anybody use it, and get a new one every 6 months and most of all, do not use an easy to guess common password. That is asking for trouble!
  3. Have a good backup and off-site storage program – AND make sure it actually works!
  4. Downloading of programs should be strictly limited to authorised individuals.
  5. Teach your people how to recognise scammers. In fact, have them take this quiz. Scammers are getting smarter, constantly changing their scams to try to catch you out – so stay on the lookout!

WHERE TO FROM HERE?

Once you’ve decided that you must pivot and change the way you do business, the natural tendency is to want to do this quickly. We read time and again – Speed is everything. Time and tide wait for no man. Everything is changing at breakneck speed. There is a sense of urgency that it must be done and done quickly. However, this is not the time for that. Rush this and you will get to experience the people challenge first hand. Implementing new systems and practices should be carefully considered and then implemented in a timely fashion.

I am a great believer in the saying, “If something is worth doing, it’s worth doing well.” Therefore, use this time of enforced “holiday” because of Covid-19 to implement best practice for your business. Don’t just return to the “norm” after Covid-19. Challenge the norm and return to a better business.

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Patsy Lim FCAAbout the Author:

Patsy Lim’s business and financial background (having qualified as a Chartered Accountant in 1980), together with her entrepreneurial spirit enables her to apply a potent blend of strong financial and accounting expertise, deep practical business experience, and entrepreneurial flair and creativity to complex business problems. As an entrepreneur, she understands the issues that an entrepreneur faces. So, unlike some accountants who only know the theory of business, Patsy has had hands-on experience of what it means to be IN business, to start a business, to grow a business, and most of all, to manage a business when times inevitably get tough!

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Website: www.PatsyLim.com

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