In an age in which customers are scarce, any company’s best practices seldom remain proprietary. Business models are shamelessly imitated with inner corporate workings becoming public knowledge. Best practices travel at Internet speed.
People are becoming masters at imitation. If you don’t have a good idea yourself, you can always knock off someone else’s product. An imitation is not necessarily an exact copy. You use details to create a difference: the look, the product extension, the packaging—anything that can make the other company’s idea look less new And this is easier than it used to be. If once you could hold on to a secret formula for years or even decades, now it’s a matter of months or days before your competitors catch up and replicate it.
One explanation is that the modern need for cooperation between companies forces them to post revealing information on their Web sites, where it is accessible to anyone. But secrets also travel with people. Nowadays there is massive employee mobility from one company to another. Despite noncompete agreements, whatever is learned at, say, Microsoft will inevitably benefit another company that hires a former Microsoft employee.
Consultants carry information and practices from one company to another, too. And software companies survive by encapsulating the leading companies‘ best practices into a package they can make available to customers. If you don’t want to buy or build best practices yourself, you can borrow or lease them, or buy them from an outsourcing provider. Anyone with a great idea that becomes a product or service will see someone else quickly pick it up—and not just replicate it but improve upon it.
Also contributing to the proliferation of best practices is that businesses everywhere are getting much better at organizational change. Any company’s first attempt to improve business practices is tough. By now, though, many successful companies have experienced multiple changes and have learned from their battle wounds. Clearly, the company most adept at organizational change has the edge.
One example is Du Pont, which has gone through at least five waves of change over an eight-year period. The first push was to cut costs and raise productivity. In the second, the company integrated its operations to get different parts of the organization toconnect and work together. People were just beginning to relax when Du Pont geared up for a third wave, aimed at reengineering its processes to eliminate unnecessary work. Next came a refocusing wave that concentrated on a few high-priority areas; and finally, a wave in which customizing products and services for individual customers was the focus.
The point is that if your company, which has gone through one change, is competing against Du Pont, which has experienced five, which of you is likely to be more skillful at it? Like Du Pont, General Electric is now steeped in change. During the 1980s and 1990s, then CEO Jack Welch led his company through four or five waves of change. That best practices are no longer enough to bring back your lost customers is certain.
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