April 1, 2011 – The term “one-size-fits-all” has become commonplace, yet the result invariably seems to be “one-size-fits-none,” at least for most.

It brings to mind back when hats were sized for each head and didn’t have belt buckles or a plastic snaps in the back to “adjust the size.” In those days, it was possible to get a hat that fit well without needing any snapping adjustments.

Today, however, the focus has shifted to a one-size-fits-all approach driven by the need for efficiency and low-cost. In many ways, companies looking for best practices face the same challenge. The desire is to find those one-size-fits-all best practices needed to move the company forward efficiently and effectively; unfortunately, in reality, these vanilla solutions rarely exist.

At the core of the issue is that most companies have differences that set them apart and create unique requirements. What may be a best practice for Company A may be a disaster for Company B. Why?

Here are a few differences that have a hand in determining whether a single practice will be effective at a given company.

1. Cultural Differences
The company culture may be the most powerful influence on a best practice. Companies vary dramatically in how they measure success, manage their employees, set expectations and conduct business. A practice that works well and is accepted and supported by the employees of one company may be viewed as too harsh and uncaring by another company.

2. Distribution Differences and Preferences
A best practice that works well in a company with captive agents may create difficulties when used in a brokerage company or a direct writing company. At a captive company, there’s no strong need to attract the broker to sell your products. Direct writers bypass traditional distribution channels and seek to attract the customers without an intermediary.

Very often, even companies that have similar distribution systems have difficulty in using a common practice. Big companies with a captive agent force will develop a practice that is quite effective, but could be all wrong for a small regional company.

3. System Differences
Many of today’s best practice processes are strongly influenced by a company’s IT system. One company’s system built 20 or 30 years ago is not going to align with another company’s best practices where the systems are of modern architecture and contain databases, data marts, workflow, rules engines, integration hooks and other speed-of-light features. Trying to identify a single best practice that focuses on processing is not practical.

4. Customer Differences and Expectations
Company A’s customers might accept a Web-based interactive system or an automated call center that permits the customer to complete transactions without having to talk with a person. But that best practice might flop for a company selling Medicare supplement coverage to elderly customers who want to do business the old-fashioned way—by talking with a real person.

These are only four potential differences that make it difficult to select one best practice that works for many companies but, clearly, there are many more. These challenges beg the question, “How does one find or develop a best practice for a particular company?”

Like many answers, the solution comes from applying a thoughtful process that incorporates the unique characteristics of a given company. Think about buying a suit: The first step is to determine size and select a color. The suit selected is similar to thousands of others of others at this point; however, it doesn’t fit. The next step is to get a tailor to customize it by taking in or letting out the waist, hemming the slacks, taking in or letting out the jacket, shortening the sleeves and so on. This process customizes the once-generic suit to the specific buyer’s frame. When the tailoring is complete, the suit may still seem similar to many others, but it has been modified to meet very specific needs.

Building a best practice is similar. Start with one that works for another company, recognizing that it must be modified to meet a specific situation. Tailor it to the various environmental and cultural differences that make the company unique, fine-tuning to successfully integrate it into the operation. Upon completion, while the best practice may resemble that of another company, it’s been tailored to fit very specific needs.

Remember, one size does not fit all, especially in a world where differentiation is a key source of competitive advantage.

Hayden Jones is a senior consultant for The Robert E. Nolan Co., a management consulting firm specializing in the insurance industry.

This article originally appeared in Insurance Networking News.

 

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