Beware of Best Practices

If you are the CEO of a start-up software company, be very wary of best practices. If you are the CEO of an expansion stage software company, be aware of best practices and know where and how to apply them, but still beware!

Instead of focusing on best practices, work hard to understand and prioritize your problems and solve them. To help you in this daunting task, be a sponge to new ideas, some of which may be called best practices. But don’t just adopt ideas and practices, even if they come from your most trusted advisors. Rather, identify those ideas and practices that are relevant to your business and those that will have true impact once you’ve assessed and problem-solved.

Best practices have a very important role to play in an expansion stage business, especially as repeatable models are identified and scaled. But the ones that are useful to your business are fewer and farther in between… more than advice-givers admit, even less so for earlier stage companies.

Defining Best PracticesLet’s define a best practice as a very specific set of activities that directly correlate to very specific results. That is, if you want to achieve A, do B, then C, then D, and then you get A. This is in line with the Wikipedia definition. It could apply to a product management process or sales and marketing. Now, there are lots of best practices out there. Some are very basic such as talk to customers, measure results, etc. But many go well beyond these, and provide entire multi-step processes to achieve various goals.

Where Your Success Comes FromWhile I’ve seen management teams outright ignore the basic best practices for building and running a business (frankly, practically ignore common sense), to their peril, I’ve also seen young entrepreneurs get excited by every best practice they read about in a book or hear from a Board member and proceed to adopt all those practices, only to let their business go sideways.

In a start-up, or even an expansion stage environment, most of your success will come not from applying best practices from books, blogs, and experts, but from accurately assessing your situation, identifying the problem, and coming up with a great solution for it. And then doing that over and over again, until, hopefully, you get to the point where you start to have a repeatable process for executing. Only then can you start determining what “best practices” make sense for you and your business. Most of the time, you will do activities that will have unexpected results. It’ll be easy to describe what happened after it happened, but not before you do it!

It’s all about the Context
The problem with any generic best practice from “experts” is that it lacks context. That is, a best practice process only works in very specific situations, and more often than not, no one talks about the situations where they don’t work. Furthermore, the earlier your business is, the less clear it is whether or not the right context exists.

And here’s the tricky thing: The more specific a best practice is, the narrower the set of situations where it is actually applicable, and the broader it is, the less useful it is!

Consider where best practices come from: Someone did something through trial and error, achieved some result, and then wrote about it. If it’s a true best practice, there’s research behind it to show that the results are repeatable in the right contexts.

Start-ups and expansion stage companies are very fluid and just don’t lend themselves well to many process steps that were defined elsewhere and identified after the fact. And rarely do the best practices described by someone else fully capture the context of their success and how that context is different from or similar to yours. The people, the market forces, the types of customers, and so on. So many factors!

Just because it worked for someone else does not mean it’ll work for you. You need to use your own brain.

So the more time you spend trying to learn and adopt the latest best practice, the less time and brain power you’re using to do truly important work.

Going even farther, building and running a new business is such a complex undertaking that a best practice is relative to the business. That is, what’s best practice for your sales process may not be what best practice was for IBM or for the operator-turned VC who sits on your Board.

For instance, borrowing from Lean Start-up school of thought, when a company is in the Customer Discovery and Customer Validation Process, by definition what you’re trying to do is figure out the best practice of selling and marketing for your business, and your business only. Only then do best practices become even relevant (other than common sense steps like speaking with customers and measuring results).

Best Practices Versus Problem SolvingI saw David Skok from Matrix give a great presentation on building a sales and marketing machine at a Lean Start-up Meetup last week. If you look at it, it certainly looks like a step-by-step best practice process to build a sales and marketing engine. But it’s really not. Instead, it’s a very helpful approach to help frame out and solve problems surrounding sales and marketing.Following David’s process does not even come close to guaranteeing success, and outputs will be different for different people and businesses. What matters is not executing each step, but rather grasping the principles behind them and creatively and intelligently applying them to your business.

I know this in part because the Q&A that followed David’s presentation revealed frustrations of those people who were trying to view David’s process as a best practice how-to guide. They were missing some details and wanted to know exactly when to do this or that, or how do you know this, or can you skip this step or that.But David’s process was a guide to thinking through the problems and attacking them, not the solution.

I suppose you can think of David’s process as a best practice for solving problems, but let’s set that aside. It’s not a best practice for actually executing sales and marketing. But it’s still extremely valuable as an analysis and problem-solving tool.

David also told a story of his early success in the mid 1980’s selling software. He succeeded not because he followed a clearly defined process. He succeeded because he had a fantastic insight and idea: To get prospects to call him back, he and his partner wrote a book reviewing all the enterprise software packages out there and then sent that book for free to all his prospects. He had a very high call-back rate and was able to land his first customers, helping start a business that had over $100 million in revenue within 4 years.

Now, following the proposed problem-solving approach it is more likely that you will do a good job of identifying your problems and the solutions to them, but it will not give you the answer, and it certainly doesn’t give you a step by step.

Where do Best Practices Fit?Last year I attended an Agile Bazaar talk about David Hussman of DevJam.

He presented the Cynefin model combined with some work by David Snowden.

As you can see, best practices have a very important role to play once you’ve figured out the solution to the problem and have a proven repeatable process that has a track record of success within your business, not just someone else’s. That is, the problem has become relatively simple.

Otherwise, most of the situations facing your expansion stage business experiences are Complicated or Complex, and if you’re a start-up, almost entirely Chaotic. It’s all about experimenting, assessing, analyzing, and responding, over and over again.

Here’s some more guidance:

So What Does All of This Mean?When people offer advice and best practices, by all means listen. Read the latest books and bloggers, and all that. And definitely continue to read the OpenView Labs newsletter and website.

But instead of looking for defined processes and answers, look for ideas and clues on how to better approach your problems, and then use your brain!