Businesses are better off finding their own way, rather than simply copying others, say academics.
Companies that copy best practice may just become "best followers", warns Stephen Cummings, Professor of Strategic Management at Victoria University Management School.
"Organisations have to see themselves as unique - it's no good being the third best, it's about having unique capabilities.
"Strategy is about differentiation," he says. Best-practice strategy,
although a good tool for efficiency, can erode your competitive edge.
Cummings has studied trends in strategic management over the past four decades with Associate Professor Urs Daellenbach. The pair co-authored a paper, A Guide to the Future of Strategy. They found that fads in management strategy move in five-year cycles.
Once, if a company was looking for strategic direction it would have brought in management consultants, based on the idea that outside help was better. But with only four big advisory firms in the world, all companies would have the same homogeneous strategies, says Cummings.
"It seems to be low risk to bring in management consultants, but you don't look to harness enthusiasm of your own people that way."
Boards also drive strategy - but it has to be the right board. There is a strong correlation between diversity and creativity, says Cummings, and you are more likely to get more creative solutions if you have diversity.
"One of the most strategic things of any business is product design, but you don't see designers on boards. Instead you have professions that look at the past, [such as] lawyers: law is all about precedent, and accounting is about accounting for the past."
Strategy is often imposed, with the need to copy best practice dictated by the market, but it takes creative agency away from your organisation, argues Cummings. In a new book, Creative Strategy: Reconnecting Business and Innovation, Cummings and co-author Chris Bilton have come up with some alternative approaches.
Rather than copying best practice, business leaders are better off starting with worst practice - learning from what they do badly.
"Because, in the words of Sir James Dyson: 'We learn more from failure than success."'
"Good practice" is also preferable to "best practice", argue Cummings and Bilton. Leaders should encourage people to put forward examples of good practice and debate their relative merits - a much more engaging method that spurs creative thinking. "Promising practice", meanwhile, encourages people to bring forward promising ideas from the parts of the organisation they think should be developed.
Finally, "next practice" encourages people to debate what the organisation should do next, rather than following what seemed to work for somebody last year.
Best practice implies that there is only one best way, and good leaders know that is unlikely, he says.
Cummings' research discusses the notion of trying to develop strategy from the middle. In A Guide to the Future of Strategy, he and Daellenbach suggest that good strategies at the top of the organisation should also exist at the middle.
Today's leader has to be in amongst it. Air New Zealand chief executive Rob Fyfe is good at that, says Cummings. "He is in there with the hard hat; he talks to people, spends Fridays regularly in a different part of the organisation, rather than sitting around with 12 people of a similar age in suits, not creating interesting ideas."
When TVNZ's Rick Ellis went to Electronic Data Systems in 2002, Cummings says he sent round an email to staff with the simple question: "Any ideas?" He got 300 responses - and used 30 ideas that the company started to develop.
"You need a certain personality to do that," says Cummings.
"Leaders have to have the ability to move from the top to the middle.
"The CEO is taking on an ambassadorial role. We need people who are good communicators."
Cummings and Bilton say good leaders should integrate domains that are often carved into separate disciplines: organisation, innovation, entrepreneurship and leadership.
"Individual innovation and one-off entrepreneurial behaviour will create nothing if they are not supported and directed by leadership and embedded into the organisational culture," says Cummings.
Effective creative strategy is also about dealing with and integrating opposing forces within each of these four domains.
"Leaders and organisations that are not continually challenged by opposing forces and alternatives at every stage became mired in self-congratulatory 'best practice' copying, and create generic, uninspiring and un-strategic offerings."
In Creative Strategy, the authors also looked at sports and arts organisations. In the book, Bilton and Cummings provide a case study of the Royal Shakespeare Company (RSC) turning itself around. It looked at what it did well on stage and took it to the boardroom, aiming to transfer good practice from the stage to good practice on the board.
A crucial turning point for the RSC came in 2003, with the appointment of Michael Boyd as artistic director and Vikki Heywood as executive director. Boyd, unusually, made sure he continued to be a director of plays. "At the same time, Boyd also provided a view from above, mapping the play's meaning and linking individual initiatives into a collective understanding," says Cummings, writing about the case study in the journal Human Capital.
"We define this approach to leadership, in which an overall vision is built upon and shaped by the actions and experiences of others, as 'leading from the middle'."
The RSC showed a desire to move beyond its traditional image and relate to new markets. This led to a programme for schools called Stand up for Shakespeare, a campaign which helped bring Shakespeare back into the national school curriculum.
The company also came up with the idea of rewriting Romeo and Juliet for Twitter. It has engaged a new generation beyond its traditional demographic, says Cummings.
But following what the RSC did is not the answer for every business, he says. The approach is part of the company's traditions: "They were part of discovering it and creating it ... It is part of them."
Gill South is an Auckland freelance writer.
