Here’s Where ‘Best Practices’ In Corporate Culture Go Wrong

I spent three days of last week at the HRPA Annual Conference here in Toronto. As always, it was a great event to reconnect with tons of brilliant HR folks in my network, as well as make new connections, and absorb ideas and knowledge from the many session speakers and keynotes- and this year was especially fun.

As in past years, a couple of those speakers brought up ‘the Z word’…no, not zombies: ‘Zappos’. If you work in HR, or have any interest in organizational culture or employee engagement, it’s virtually guaranteed that you’ve read all about Zappos’ approach to corporate culture. They’ve been referenced as a benchmark in this area for many years now, and although I have nothing against Zappos, this year the Z word gave me pause. Maybe it’s because I’ve been doing a lot of thinking about organizational culture recently, or maybe it was this recent Tim Sacket post decrying the obsession with ‘best practices’, but I just couldn’t muster my usual enthusiasm for Zappos’ legendary approach.

Best Practices

“Best practice” has become a largely meaningless label an individual applies to one or more business practices that they hold in high regard; practices that they, or their industry or profession, consider to be ‘best’, presumably in comparison to other practices previously or currently in use. There might be theoretical underpinnings or research that illustrate the efficacy of these practices, but quite frequently there is not. It seems to me that in cases where such supporting data is lacking, the evidence used to justify the labelling of a practice as ‘best’ is the degree to which it is popular amongst similar organisations, especially if those organisations are successful (e.g. profitable, recognised and positively viewed). Often these practices are advanced as ‘best’ by the very organisations that employ them, or by consultants, thought leaders or professional bodies that champion the adoption of the practices in question. Given these questionable motives, it can be difficult, I think, to assess whether a ‘best practice’ is effective, or simply the latest craze.

A Best Practice is Born

Looked at from this (albeit cynical) viewpoint, it all seems a bit bizarre, doesn’t it? An organisation implements a program because one of its senior leaders read an interview with XYZ Corp’s CEO touting the effectiveness of said program, and a trusted contact who is a high-priced consultant says that several Fortune 500 clients are doing the same. She thinks: “If influential organisations are doing it that way, then it must be the best way to do it.” The propagation of the practice continues, with industry experts speaking at conferences about it as ‘the new industry standard’; attendees returning back to their own organisations intent on not being left behind, eager to implement a similar program at their organisations. And to make a long story short- a ‘best practice’ is born. Except that one size almost never fits all- so that even if the ‘best practice’ actually contributed to the success of the exemplar organisation, it may not work at all in another.

There is a fascinating theory that speaks to why this whole process occurs, and it’s one that I think holds lessons for HR, and the wider business world when it comes to our current level of discourse about ‘best practices’.

Institutional Legitimacy

New Institutional theory offers an explanation for why organisations make the decisions to behave in the ways that they do. It is grounded in the belief that organisations who operate in an ambiguous context are often driven to pursue ‘institutional legitimacy’. That is, an organisation will be driven to act in ways that seek to legitimise its existence, status and power by conforming to prevailing notions of what such an organisation ‘should’ look and act like. Davis and Powell describe this occurring through conformity with “rational myths” (which sound eerily similar to ‘best practices’), the efficacy of which is presumed on the basis of their wide adoption, rather than any concrete evidence.

The Z Word So, let’s take a closer look at Zappos- who by all accounts seem to offer a near-utopian work life, and certainly had the employee engagement and satisfaction data to back up the efficacy of their approach to corporate culture as a ‘best practice’, right? Well, maybe not…The thing is that most of the speakers I’ve heard reference Zappos over the years don’t bring up the company’s profitability or market share. And there could be a good reason for that, as some other people have suggested in the past. I’m not asserting that Zappos’ was not successful in many ways (such as creating a recognisable brand, or being acquired by Amazon), or that their HR practices did not contribute to that success- but I am saying that we might want to think a bit more critically before we send an organisation to the ‘HR Best Practices Hall of Fame’ in perpetuity.

Few among us would argue that employee satisfaction and engagement are not worthwhile pursuits, but not in isolation. They are  ultimately meant to produce ROI in relation to an organisation’s goals. Profit is not the only metric that matters, but when we talk about HR ‘best practices’, we should consider their role within the larger organizational context.

What do you think? Am I being too harsh on Zappos? Do you have suggestions for other organisations that speakers should reference as an example of HR best practices (please…)?

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