“Best practice” is bad practice

I DON’T KNOW ABOUT YOU, but I’ve grown heartily sick at the number times I've encountered wankers waffling on about "the importance" of following something called "best practice"—a practice by which everyone in a profession or industry is encouraged to copy the practices of those whom the wankers deem to be the best.

It’s not just bad grammar, it’s bad for business.

It is, of course, simply a recipe for encouraging mediocrity and box-ticking, discouraging entrepreneurial experimentation and innovation.  For banishing competition and difference. To substitute conformity for innovation, and “conventional wisdom” for independent thought. To establish an establishment.

Until recently, wankers like this were a danger only to themselves and to know-nothings who paid for their advice and could be safely ignored. (Wankers like this always charge for their advice--and the more worthless it is, the more they charge. As Greek philosopher Thales was supposed to have observed around 2,500 years ago, the most difficult thing in the world is to know oneself; the easiest is to give advice to others. The wankers always charge the most for the least.)

But with the government increasingly trying to put every professional's head into one noose--and with the grey ooze of bureaucracy increasingly covering every part of the country, ignoring this stupidity is becoming increasingly difficult. With the onset of compulsory occupational licensing for everyone from drainlayers to financial advisers, pretty soon we will see the elevation of “conventional wisdom” into law, to be ignored only at the risk of expulsion from one’s chosen profession.

“Best practice” is a recipe for the calcification of industry, and the banishment of the very entrepreneurial experimentation that drives production and technology improvements. 

JUST IMAGINE IF HENRY FORD had followed these now widespread exhortations to place the practices of others over your own independent judgement. Henry Ford found the automobile a rich man’s toy, and turned it into a possession of everyman. He didn’t do that by following “best practice.” He did it by improving the quality of automobile while improving everything about their production. And he did that by continuously introducing new improvements and reducing costs, even as his rivals began emulating his innovations. 

The higher profits, naturally, went to Henry. To the innovator. And the benefits went to everyman. But at no stage could Henry sit back on his haunches and simply do what he had always done. As George Reisman outlines, what drives the new levels of achievement so essential to furthering our lives is not following “best practice” but pursuing bigger profits. 

What was good enough to once make a high rate of profit, ceases to be good enough as soon as enough others are able to do the same thing. In order to go on earning an above-average rate of profit,one must continue to stay ahead of the competition.  By the same token, any business that stands pat is necessarily finished in a free economy, no matter its past successes.
    For the technological advances of any given time are further and further surpassed as time goes on. Think how absurd it would be in virtually any industry to try to make money today by producing with the most advanced, most profitable techniques of 1900, 1940, or even 1980 [or 2000], and not bothering to adapt to the changes that have happened since then [and take them even further]. [Capitalism, pg. 176]

The advocates of “best practice” completely discount the importance of entrepreneurial activity as a driver of excellence—mostly because they don’t understand its importance as the primary driver of all economic activity.

So too do they underestimate the power of profits.

It cannot be stressed too strongly that under the freedom of competition, innovations must be adopted not only to make exceptional profits, but to be able to make any profits whatever. They must be adopted merely to remain in business at all.  This is true because sooner or later, as the result of the freedom of competition, virtually all cost cuts are translated into price cuts, and whoever does not produce with the lowest [possible] methods cannot cover his costs. [Capitalism, pg, 177]

Every producer is always looking for an edge—a means whereby to distinguish themselves from their competitors. Copying them isn’t good enough. What is needed is to beat them.

The constant rule that confronts every businessman every day, in short, is “innovate or die”—just one reason unleashing  entrepreneurs is so important.

But the advocates of “best practice” are down on innovation. They would like instead to substitute  substitute conformity.  And they’re very much down on entrepreneurs.  They would instead much prefer to deal with box-tickers—partly because the box-tickers are more likely to ask for their advice.

NOW ODDLY ENOUGH, I WAS thinking thoughts like this over the summer when I came across an astonishing article in an unlikely source. I was reading a copy of NZ Education Review when I came across an article by Professor Stephen Cummings from Victoria University of Wellington arguing that

there’s a move away from copying best practice toward seeing each organisation as a particular and unique collection of capabilities to be developed. You can’t be a leader by following “best practice.”’

Too right.

You can read Professor Cummings’s article here: Facts and fads affect strategic management.