Best Practices Do Not Create Competitive Advantage

Executive Summary

Few companies ever truly redefine an industry. But there are plenty of cautionary tales of those that clung to best practices — only to lose their competitive edge, and in many cases, their business entirely. Think: Walmart vs. Kmart. Netflix vs. Blockbuster. Apple vs. BlackBerry. Amazon vs. Borders.

If these companies were all following "best practices," why did some thrive while others collapsed?

A closer look reveals the answer: culture and mindset. The winners in these matchups share a common DNA—cultures of relentless curiosity, innovation, and a willingness to break from the norm. They didn’t just optimize what existed; they transformed it.

True industry leaders know where to apply best practices — and just as importantly, where to break from them. They understand that best practices ensure operational stability, but transformative practices create market leadership.

The danger for most organizations lies in a narrow, myopic view of their business and industry. They chase benchmarks instead of breakthroughs.

What separates the market leaders from the rest isn’t just execution — it’s vision. And the courage to challenge what’s been done before.

The Problem Statement - Transformative Practices Defined

According to the Oxford Dictionary, best practices are defined as commercial or professional procedures that are widely accepted as being the most effective. In some cases, they also set a baseline for minimum output or performance. At their core, best practices are grounded in the scientific principle of repeatability — proving a method works by consistently achieving the same result.

In business, best practices carry significant weight. They serve as the foundation for processes across countless professions, especially those bound by regulatory or legal standards. They build trust. They signal credibility. They reduce risk.

But here’s the question: Are we over-relying on best practices?

When should we lean on them — and when might they hold us back? Are there moments that demand we break the mold instead of following it?

This tension surfaces often in my client work. One of the most frequent conversations I have is about how a best practices mindset can unintentionally become a constraint — especially when teams are tasked with doing something truly innovative or unprecedented.

Interestingly, this conversation rarely comes up with founder-led companies. Founders instinctively understand that they need to build differently. They aren’t bound by tradition. They’re driven by transformation, not replication.

It’s easy to see why best practices become a go-to decision-making framework: they provide comfort, predictability, and a sense of control. But in a world that rewards originality and disruption, we must learn to ask: Is following best practice actually limiting what’s possible?

First, the name is pretty sexy. “Best practice”. There can’t be anything better than the best can there? If I do my best and aspire to achieve best practice then I can't be wrong. Right? Wrong.

Second, many people in company decision making roles have benefitted from tertiary education, often pursuing a profession. The profession itself is built on best practice. So this type of thinking is wired into people early in life.

Third, to become a decision maker in a business, one must succeed in more junior roles. More junior roles tend to be more defined with results measured against some form of best practice framework. 

However, like most things in life, there are situational nuances where certain approaches are more successful than others. Let’s explore.

Transformative Practices - Helpful in solving complex problems

 In today's fast-paced world, the constant flux of social, economic, and technological changes challenges individuals and organizations to adapt and thrive. Transformative practices encompass methodologies and mindsets that facilitate profound change and are essential tools for navigating this dynamic environment. These practices are not just about incremental improvements but about making fundamental changes that lead to significant growth and new possibilities.

Transformative practices involve leveraging new technologies, embracing emergent business models and at times, applying unconventional strategies to solve traditional problems in new ways. This could mean adopting artificial intelligence in ways competitors haven't thought of, rethinking customer engagement through unique digital experiences, or fundamentally altering the value chain for greater sustainability or efficiency. It requires embracing a new transformative business model, placing customer obsessions at the core of your business decisions. Seeing beyond the horizon and being bold in execution, often requiring a culture that supports experimentation, accepts risk, and learns from failure.

This mindset is critical in today's rapidly changing business environment, where technological advancements and shifting consumer expectations can quickly render "best practices" obsolete. Companies that adopt transformative practices are often those that lead their industries, disrupt markets, and create significant new value for their stakeholders. Gartner in their report titled “An Anatomy of a Generative High-Tech Provider Business Model” reports that companies spending on generative-style solutions (transformative solutions) have the potential to grow faster than traditional providers or cloud-based revenue. 

“Over the last five years, there has been a split in the high-tech marketspace. There were always companies that used technology to be more efficient. Now there are companies that seek outcomes that go beyond efficiency.” 

• John Taschek, senior vice president of strategy at Salesforce

Business Transformation Model - Are You Doing it Right

For years, "transformation" has served as a broad term describing how organizations make strategic decisions to reach their full potential. Typically, companies first focus on achieving strong financial performance and organizational effectiveness before shifting their attention to higher growth, new strategies, and technology-enabled solutions. Yet, this journey misses a fundamental principle, the customer. 

In such a dynamic business environment, focusing on new ways of working, new capabilities, and new technologies is touted as the way forward. However, it’s the wrong approach. Transformations are not easy to get right. Research by McKinsey has long documented that enterprise-wide transformation is difficult, with less than a third of transformations reaching their goals to improve organizational performance and sustain these improvements over time.

Focusing on technology to transform, or even the business priorities, neglects the critical role of your customer in your transformation journey. Likewise top down board sponsored transformations are often ill defined, unwieldy and disconnected from the customer and oftentimes reality. If you don't make customer obsession the core of your transformation objectives, you'll undermine the full potential of your transformation goals. So, let’s explore the business transformation model.

Key Aspects of a Transformative Consultancy

Many organizations struggle to evolve beyond a "Best Practices" mindset—a framework rooted in replication and risk-aversion—into a truly transformational way of thinking. This gap in mindset is not just operational; it's cultural. It limits innovation, agility, and the ability to lead in rapidly changing markets.

As a result, a new breed of consultancies has emerged—transformation consultancies—positioning themselves not merely as process optimizers, but as strategic partners who challenge conventional thinking, unlock new value, and drive meaningful change. These firms aren't focused on what’s already been proven. They’re focused on what’s possible.

The key aspects that distinguish transformative consultancy from a best practices approach include six critical components:

1. Shared Business Outcomes

2. Partnership Approach

3. Holistic Perspective

4. Long-Term Orientation

5. Innovation and Customization

6. Capability Building

Let's Explore

1. Shared Business Outcomes: Unlike traditional models that focus on delivering specific services or projects, transformative consultancy aligns the consultancy’s objectives with the client’s broader business outcomes. Success is measured not by the completion of individual projects but by the achievement of shared goals, such as revenue growth, cost reduction or digital transformation. (see diagram 1)  

These models illustrate the flexible and performance-based nature of transformative consultancy partnerships, aligning the interests of both parties for mutual success.

2. Partnership Approach: Transformative consultancy involves working closely with the client’s organization as partners rather than as external advisors. This partnership is built on mutual trust, open communication and a deep understanding of the client's business. It involves co-creating strategies and solutions that are tailored to the client's unique challenges and opportunities. (see diagram 2)

These kinds of partnerships need not necessarily happen on a massive scale from the outset, in a way that is cost-prohibitive for both business and consultancy.  If decision-makers of both the business and the consultancy have a transformative mindset, small, pragmatic, proof of concept solutions will be born that eventually spur larger-scale transformative partnerships.

3. Long-Term Orientation: Instead of focusing on short-term projects, transformative consultancy takes a long-term perspective, aiming to drive sustainable change and create lasting value for the client. This might involve ongoing support, adaptation to changing market conditions or continuous improvement initiatives. It’s important to note that long-term in today’s accelerated cloud environment is not a 3 - 5 year time horizon, but achievable in 12 - 18 months. The focus is on ensuring that you are meeting a business need, not just a technology need with this approach. Referencing Gartner’s Business and Operating Framework model below highlights that intersection of a “Business Model” perspective intersecting with client’s “Enterprise Operating Model” highlighting how business capabilities are the linchpin to connecting these two together. 

4. Holistic Perspective: Transformative consultants look beyond immediate problems to understand the client's business ecosystem, including its culture, processes, technology and market environment. They consider how various elements interact and affect the organization's ability to achieve its goals.

5. Innovation and Customization: Given the partnership nature and long-term focus, transformative consultancy often leads to more innovative and customized solutions. Consultants and clients work together to ideate, experiment and iterate, leveraging the consultancy's expertise and the client's internal knowledge to develop unique solutions that provide competitive advantages.

6. Capability Building: Beyond solving immediate challenges, transformative consultancy aims to build the client organization's capabilities, empowering it to sustain improvements and continue innovating after the consultancy's role diminishes. This might include training staff, implementing new technologies or establishing “new” best practices.

Partnering with a transformative consultancy is a strategic approach for enterprises seeking to build trust and achieve significant business impact gradually. Often, these engagements begin with smaller projects, allowing the consultancy to demonstrate its capabilities and reliability. As trust is established, the consultancy is entrusted with increasingly complex and critical projects, leading to a deeper integration and greater overall business transformation. This phased approach ensures that the enterprise can evaluate the consultancy's performance and adaptability at each stage, fostering a strong, long-term partnership.

Business Environments Conducive to Transformation

Business environments that are conducive to transformation are characterized by several key elements. These elements foster innovation, agility and a culture of continuous improvement, enabling businesses to adapt to changing market conditions, technological advancements and evolving customer expectations. These environments typically include:

1. Leadership commitment with support for change: A clear vision for the future with a commitment to change and the ability to inspire and mobilize the business towards that vision. 

2. Innovation culture: Embody the three characteristics of innovation being employee empowerment, tolerance for failure and culture of cross-functional collaboration.

3. Customer-centric approach: Actively seeking the mind of the customer, gathering and analyzing customer feedback and leveraging data and technology to offer personalized solutions to exceed customer expectations.

4. Technology and data infrastructure: Embracing leading technology solutions and data analytics insights that support innovation and transformation. 

5. Strategic partnerships: Recognizing that true transformation requires moving out of what has been done before, and working with partners that bring new and unique perspectives, working collaboratively with you to craft transformative solutions.

Creating a business environment that embodies these characteristics can significantly enhance an organization's ability to transform successfully. This not only positions the company for long-term growth and competitiveness but also contributes to a more dynamic and innovative economy. However, it's important to note that not all aspects of the environment need to be perfect to ensure success, except for the crucial element of "Leadership commitment with support for change." A transformative consultancy can help establish this environment, enabling the client to implement the necessary changes. 

Role of a Transformational Consultancy

Transformative consultancy is particularly suited to environments that are rapidly changing or where businesses face complex, multifaceted challenges. It requires consultancies to have a broad range of skills and the ability to integrate seamlessly with their client organizations. Choosing a transformative consultancy provider means committing to a deep, collaborative partnership that goes beyond hiring an advisor to finding a partner in navigating change and achieving long-term success. A partner that goes beyond laying out a plan, has the technical and strategic expertise to work collaboratively with you to enact transformation. 

Transformative Practice Recommendations

Many traditional consulting firms were established in a pre-digital era and have methodologies deeply rooted in the practices of that time. This can create a challenge as they attempt to adapt to the rapid changes brought about by cloud computing and artificial intelligence.

These firms often have established methods and client bases that they are cautious about disrupting. Their expertise and business models are typically built around well-defined, often time-tested solutions and approaches that may not seamlessly integrate newer technologies like AI and cloud services. This conservatism can serve as both a shield, protecting their existing practices and customer relationships, and as a barrier to adopting transformative technologies that could potentially offer more efficient, innovative or cost-effective solutions.

On the other hand, newer consultancies that have emerged in the era of cloud and AI often don't have this legacy burden. They can build their methodologies from the ground up with these technologies at the core. This allows them to be more agile and often more willing to experiment with novel approaches and transformative practices.

The tension between maintaining traditional methodologies and embracing innovation is a significant strategic issue for many established consultancies. The challenge lies in evolving these methodologies to incorporate new technologies without losing the essence of what has made them successful. This involves a delicate balance of innovation, risk management and change management to ensure they remain competitive and relevant in a rapidly changing technological landscape. When evaluating a partner to enable your transformative approach, consider the following points: 

• Identify potential consultancies for a more transformative relationship by applying the business and operating model descriptions to each situation.

• Determine your company's internal desire and appetite to take on a transformative approach by evaluating your current business strategy to how differentiated it is to your competition.

• Ensure all business units are aligned with true transformation. 

• Recognize that your business must put information and technology at the core of your business model. 

• Focus not on the technology provided by the consultancy, but rather the business outcome. A true transformation consultancy does not come in with a set solution as in many cases, solutions are unknown at the start. 

• The  more strategic and valuable the business outcome, the less likely it can be achieved through best practice solutions, and in turn, the less likely it is to achieve the outcome through traditional technology-intensive change.