Best, Better, Next
Clients often ask me about best practices and what I tell them is that I don't really believe in best practices. Sure, the concept sounds worthwhile but it really needs a qualifier. It should refer to best practices
for now. For today's best practices will be second best next week and obsolete next month.
To really be engaged in best practices we need to continuously innovate. After all, if our competitors are always getting better, we must do the same, or even more. We can ask, "How can we do what everyone else is doing but better?" That's Better Practices. Or we can ask, "How can we change the game so that everyone's looking to us for 'best practices?'" That's Next Practices.
Consider the rapidly evolving home video market. For years, Blockbuster dominated the market with a model based on brick-and-mortar stores and per-use rental fees (including considerable late fees). Blockbuster was the model of best practices in that market for some time. However, at the height of Blockbuster's profitability, Reed Hastings and some fellow entrepreneurs launched Netflix.
Hastings was inspired to start the company after being charged a late fee for a video rental. Consumer dissatisfaction with late fees was high. Not surprisingly, Netflix's first pitch was "No Late Fees." Netflix also took advantage of an Internet ordering system that offered a wider selection, doorstep delivery, and a pay-one-price, all-you-can-eat fee structure. By the middle of the last decade, Blockbuster's practices were no longer "best." Netflix's were.
Netflix's rise was meteoric. They discovered next practices. They changed the game. Before long, Blockbuster had abolished late fees and offered Internet ordering. Despite the advantage of also having brick-and-mortar stores, it was too late. By 2010, Blockbuster filed for bankruptcy.
Netflix, on the other hand, continued to innovate. They added a streaming video service that attracted many new customers. Before long, streaming video became best practices in the home video market. Other major players like Apple and Amazon have become competitors. In fact, this month, Blockbuster, now owned by Dish Network, is being re-launched as an Internet video streaming service.
Also this month, Netflix has announced they will no longer offer DVDs ordered over the Internet and delivered by mail. What were hailed as Netflix's "best practices" just a few years ago are now obsolete. Netflix is spinning off its DVD business as a separate entity, Qwikster, in order to remain competitive in the future of streaming video. The new "best practices" in DVD rental are now the Redbox kiosks outside of storefronts across the country.
Netflix's move has earned mixed reviews, at best, but if it failed to act, it risked shackling a successful business (streaming video) to a dying one (DVD rental by mail), just as Blockbuster did a few years ago. Netflix will have to innovate even more if it hopes to survive in the long run, perhaps linking itself with content providers or hardware makers or both.
Whether Netflix's latest move works or not, the lesson of the home video market is that you must be able to deliver value and to anticipate what value is going to be in the future. You have to look at next practices. That will distinguish you from those who are simply focusing on "best" practices.
Up, Down, or Sideways: How to Succeed When Times are Good Bad or In Between. Click here http://www.marksanborn.com/up-down-or-sideways/ to download a free excerpt and to order.
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