Innovation Best Practices: Does adopting a "Best Practice" really make you any better?
Originally published: 2015 (PDMA Visions Magazine • Issue 1, 2015 • Vol 39 • No 1)
Read time: 5 minutes
Part of PDMA’s mission is to uncover and disseminate best practices in new product development and innovation. Enormous intellectual effort is devoted to researching what organizations are doing, what is effective, what is not and what is worth telling the world about.
Yet, history is full of stories of organizations that have identified and implemented best practices only to find themselves in bankruptcy court. Thought leaders, pundits and bloggers question if the concept of “best practices” as applied to innovation isn’t, in fact, an oxymoron, arguing that by the time the best practice is identified, it can no longer serve as an innovative means of differentiation. Authors write entire books on the subject, such as “How the Mighty Fall” and “Best Practices are Stupid,” attempting to address this issue. Is it possible to really identify best practices for new product development, and if so, how can they be applied in an organization?
A Trendy Example
Not only is it possible to identify best practices, but it is critically important to implement them appropriately in new product development and innovation efforts. The trick is to identify the real ones and to apply them specifically to the needs of a particular organization. Consider a simple example of a popular personal set of “best practices” currently making the rounds through social media in the form of an infographic called “Habits of the Wealthiest People.” The chart shows the results of a study comparing the habits and attitudes of a few hundred wealthy people versus those of a few hundred far-less-than-wealthy people, showing statistical differences between their behaviors. At the bottom of the chart, there is a quasi-disclaimer, “Following these traits won’t necessarily make you rich…but they are worth a shot.”
The implication, which is frequently an explicit assertion of the blogger, sharer, tweeter or pinner who posts this infographic, is that these behaviors are a part of what separates the successes from the failures (at least as measured by financial metrics, which may or may not be how one ought to measure success). Now, kudos go to Thomas C. Corley, cited for conducting the study, as he studied both the wealthy and the poor and found differences between them. That is a refreshing change from the just-look-at-the-winners fallacy. But, is that simple study sufficient for identifying a best practice?
What’s Wrong with Identifying Differences?
Unfortunately, the infographic commits an error that is just as wrong as the winners-only fallacy, one that is perhaps even more dangerous, because the fallacy is harder to spot and much easier to believe. It is the error of assuming that correlation equals causation.
Correlation means that things tend to happen together. Causation means that one thing makes another thing happen. They are not the same; yet, people will often argue as if they are. After all, where there is smoke, there must be fire, right? Such arguments can seem reasonable, until you look at an absurd example.
The average number of letters in the English names for warm weather months (March, April, May, June, July, August) is 4.5. The average number of letters for cold weather months (September, October, November, December, January, February) is 7.8. Causation would suggest that when the names of the months get longer, the temperature of the weather gets colder. Who knew we could control the weather based on how we name the months of the year?
Thankfully, such absurdity is easy to spot. Not only is the correlation coincidental, but the data is rigged. Is March really a warm weather month and September a cold weather month?
For this kind of thing, we know better. But what happens when things aren’t so obvious? What happens when the correlation fits our preconceived beliefs in cause and effect?
In the “Wealthy Habits” infographic, for example, it shows that the wealthy get fewer calories from junk food than the poor do. Because they eat healthier, they are better able to succeed and become wealthy, right? Or, 63 percent of the wealthy listen to audio books during their commute to work, while only 5 percent of the poor do. Of course! The wealthy are diligently learning more about the world and improving their minds, while the poor are wasting their brains on worthless music or just staring off into space.
Those conclusions may fit our preconceived notions, but they are not remotely supported by the data. The cause and effect could easily go the other way. The wealthy could be getting fewer calories from junk food because they can afford higher quality food. Anyone familiar with inner city “food deserts” could certainly vouch for such a conclusion. Or, the wealthy could listen to more audio books because they can afford to purchase more audiobooks and the technology that plays them. Their wealth could just as easily be the cause of the audiobook listening effect, as the audiobook listening is the cause of the wealth effect. Correlation alone cannot tell us the difference.
So what does this have to do with best practices in innovation?
When considering whether, how, when and where to apply a “best practice,” innovation leaders must adopt a similarly healthy level of skepticism before steering their organization down that path.
For example, a recent management fad has been to make every business operate like Apple. Clearly, Apple had a winning formula, going from near bankruptcy to the single largest market cap company in the known universe. Differentiators could easily be identified: highly focused and well-communicated strategy, human-centered design, unique retail outlets, the new “genius bar” service, simple pricing structures and more. Surely mimicking these practices would translate to business success in other industries, right?
Fast forward to April 2013, with a very public, very humiliating ouster of Apple-guy-turned-JCPenney-CEO, Ron Johnson, after the debacle that involved making the discount retailer operate like Apple. The results were so bad, that the following May JCPenney ran a television ad apologizing for the attempted changes.
The moral of the story is that simply trying to imitate “winners” will not automatically lead to success. Blindly imitating the most innovative will not automatically make you innovative. Innovators need to know the difference between what will really work and what will not.
Knowing the Real from the Fake
When evaluating best practices, including those that you find doubtful and those that you find intuitively obvious, challenge your thinking before deciding whether and how to implement them.
First, identify your biases in advance. No matter how rational we think we are, we all carry our own biases into any decision. Having a good feel for what those are helps mitigate any adverse impact they have on those decisions.
Challenge the nature of the best practice. Is it speculation, or is it proven? Has it been evaluated with the rigor of a practice identified in the Journal of Product Innovation Management, or is it new and unproven. Is the “proof” really causation and not just correlation? Being unproven does not necessarily make it bad (all best practices are unproven at first), but it does suggest that extra evaluation is in order.
Determine if the practice fits your situation. Being a proven best practice does not necessarily make it good, either. You have to know how it was proven, in what circumstance and if that proof really applies to your situation. Is your organization ready and capable to implement the practice?
Set your expectations for the impact of implementing the practice. Some practices are simply going to be antes into the innovation game. Some are going to be long-term differentiators that take years to demonstrate value. Some require simultaneous cultural change to make success possible. Beware of expecting silver bullet solutions.
Best practices, even in the dynamic and increasingly chaotic world of innovation and new product development, are critically important to organizations trying to effectively bring new goods and services to the marketplace. Innovation leaders must put thoughtful consideration into whether, how, when and where to put them into effect. Doing so is a best practice in itself.
About the Author
Brad Barbera, NPDP, is founder and principal at Pi Innovation LLC, providing guidance to SMEs and non-profits looking to advance their innovation capabilities. He has led product development efforts in a variety of industries and has served as executive director of the Product Development and Management Association (PDMA). He is currently the editor-in-chief of PDMA’s Visions magazine.