Some of the most prominent U.S. consultants and advisory services now present their clients with comprehensive checklists of what are, in their opinion, the attributes of excellence for managing information systems.
Advisory services offer tips and high-priced periodic reports on whatever topic seems to befuddle information executives. Large consulting firms collect their best practices in an unending stack of loose-leaf binders. Those become handy sources of repeatable advice for their less experienced consultants.
Having a comprehensive compilation of best practices is good business. A recent series of full page advertisements from one of the largest consulting firms declared that " ... our professionals will start by sharing ... what works best for others."
Receiving the "best" advice is always appealing to managers looking for assurance that they are doing the right thing. But beware: It can spell ruin for IS managers.
Any idealized list of what is "best" could be irrelevant in dealing with a company's unique maladies. Managers who adopt generic lists without understanding their companies' real problems, priorities, schedules and budgets are sure to end up searching for new jobs.
Consultants don't explain how they come up with their suggestions except by mentioning that they reflect the experts' views. Nor do the originators of best practices lists explain how they validated their prescriptions with independent performance measures such as profitability.
Consultants like the best practices approach because it lets them write an impressive report based on their firms' preferred practices and methodologies.
But if you are still sanguine about best practices lists, consider this: There is evidence that excellence can't be based on complying with even the most elaborate set of desirable attributes. Just consider the most prestigious prize in U.S. business the Malcolm Baldrige National Quality Award, given out annually by the U.S. Department of Commerce.
How have those "quality" companies fared in the real world? I examined the financial results of all 23 Baldrige winners through last year. My purpose was to discover if economic performance is related to the high ratings for complying with what prominent experts believed to be standards for excellence.
Ten organizations are privately held or have been merged, and therefore financial data isn't available. One of those firms, Wallace Co., filed for bankruptcy protection two years after it won the Baldrige in 1990.
Of the remaining 13, results are published only for the parent company, some of which entered just one of their major divisions in the contest. Nevertheless, in each case the parent company spread the fame to the entire firm. Therefore, I felt justified to look at the total financial results of the Baldrige winners.
Only two of the 13 firms show a positive economic value-added (defined as profits minus costs of shareholder equity) for the seven-year period from 1988 through 1994. Solectron Corp. and Corning, Inc. added $134 million to the U.S. economy. Eleven of the winning firms, including Armstrong World Industries, Inc., Eastman Chemical Co., Xerox Corp., Federal Express Corp., Texas Instruments, Inc., Westinghouse Electric Corp., General Motors Corp. and IBM, show negative economic value-added. They detracted $101 billion from the U.S. economy.
But consuming the best pharmaceuticals indiscriminately won't guarantee superior health. Medicines are effective only after correct diagnosis, correct prescription, adherence to instructions and continued good care.
Instead of seeking to adopt the best practices from somebody's list, chief information officers would be better off by first coming up with ways to determine what their firms really need. CIOs need to devise processes that will assure that they comprehend and can measure what performance goals are worthwhile. Only after that is done is it safe to look up a catalog of good ideas and find which ones may fit their situation.
IS executives should beware of anyone who invokes generally applicable best practices as the source of his or her authority. No one has yet demonstrated that there are universal insights for delivery of systems superiority. Not enough is yet known about the influences that deliver exceptional organizational performance. Anyone who presumes he or she can compile a generic list of what makes excellent information management is guilty of peddling placebos instead of curing ills.
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