Companies must blow up best practices
It’s time to reinvent best practices that have become bad habits within organizations.
In their new book, Geoff Tuff and Steven Goldbach from Monitor Deloitte investigate why so many leaders and employees blindly follow the same practices they always have. Or worse – follow them, knowing they have no value.
In a rapidly changing world it is crucial that corporations start thinking critically about the value of best practices. The history of sports exemplifies why this is the case. For many years, the Olympic high jump was performed by jumping forwards over the bar. Then Dick Fosbury from Portland, Oregon, came along. He wanted to challenge this technique, because he found it complicated. Instead, he wanted to jump with his back turning towards the bar. Many were skeptical, and he was told repeatedly that he would never be successful. All he could do was to shrug and try it anyway. And at the Summer Olympics in 1968 in Mexico City he sat a new world record by jumping 2.24 meters. Since then, this technique has been preferred by athletes all over the world.
The story underlines the importance of daring to do things differently. To take chances. In other words, to blow up best practices and find new and better ways of doing things.
That is also the key message in Geoff Tuff and Steven Goldbach’s new book ‘Detonate: Why — and how — corporations must blow up best practices (and bring a beginners mind) to survive’.
“We are living in a world of exponential change from new technologies, and we have not seen the full impact yet. It will feel like everything will change overnight,” says Geoff Tuff.
“That is exactly why we wrote Detonate,” Steven Goldbach adds.
“Companies think they have plenty of time to change, but that is no longer the case. Companies need to stop doing the comfortable things and start doing the things that create change. With this book we want to give people the tools to do so.”
Goodbye, old habits…
According to the authors, a first step is to identify all the habits that exist inside a company. Industries and companies tend to develop a set of habits and rules that shape widely held conventional wisdom over time. The authors call these rules ‘orthodoxies’.
“We advise companies to spot these orthodoxies, which prevent them from doing things differently, and imagine a world in which they do not exist,” says Geoff Tuff.
The mining industry is a good example, he points out. It is one of the world’s oldest industries, and rule number one is not to share your proprietary data – because this is where the gold is. However, the company GoldCorp dared to challenge this old rule.
“The company published its geological data and challenged the world to do the prospecting via an open innovation challenge, making three billion dollars, reaching 110 targets and an 80 per cent yield.”
To do what GoldCorp and other successful innovators have done, companies need to think more strategically about their opportunities. Geoff Tuff and Steven Goldbach distinguish between ‘known opportunities’, where companies can innovate based on customer and market insights, and ‘unknown opportunities’, which must either be discovered or developed.
“Known opportunities are what comes naturally to any successful company, and four or five years ago it made up 80 per cent of company opportunities. However, because of the exponential line of disruption, the 80 percent is changing to 60 per cent – and the number is still dropping,” Steven Goldbach says.
This calls for a change of mind. In the unknown sphere, companies need to bring a beginner’s mind, Geoff Tuff explains:
“In a beginner’s mind there are many options. In an expert’s mind there are few. As we see things change, expertise is not going to win the day. Seeing things differently is. By seeing things differently you expand your possibilities of how to solve a challenge. That is exactly what entrepreneurs do all the time when they disrupt an industry.”
Not only do companies need to think differently. They also need to act differently, Steven Goldbach adds:
“Firstly, companies need to embrace impermanence; Do not assume that the stuff you did today will last forever. You might discover something better, and you need to be able to react on new insights. Companies tend to hold on too dearly to the things they have decided,” he says.
“Secondly, companies should strive to make minimal viable moves; It is all about experimentation in a minimum viable way. Expectations of the return to the business is ultimately what kills innovation. You need to have an innovation function that does not necessarily need to create a concrete return in the short term. It needs to focus on learning through small experiments, rapidly executed. Failing only happens if you wait too long to test something,” says Steven Goldbach.
About the authors
Geoff Tuff is a principal at Deloitte Consulting LLP and a senior leader of the organization’s innovation and applied design practices. Tuff’s work centers around helping clients transform their businesses to grow and compete in non-traditional ways. Over the course of his career, Tuff has worked in virtually every industry, and he uses that breadth of experience to bring novel insights about how things might operate to clients stuck in industry conventional wisdom.
Steven Goldbach is a principal at Deloitte Consulting LLP and serves as the organization’s chief strategy officer. He is also a member of the Deloitte U.S. executive leadership team. Goldbach helps executives and their teams transform their organizations by making challenging and pragmatic strategy choices in the face of uncertainty. Serving clients in many industries, including consumer products, telecommunications, media and health care, Goldbach helps companies combine rigor and creativity to create their own future.