The Nightmare Of Networks When Best Practices Meet The Intranet, Innovation Takes a Holiday
By Michael Schrage

(FORTUNE Magazine) – Blackmail is such an ugly word. But it's the best description of what happens when the passionate cooings of knowledge-management gurus get translated into the harsh realpolitik of today's corporate networks.

At world-class organizations like General Electric and Asea Brown Boveri, intranets that once carried urgent e-mails and turgid Powerpoint presentations now store databases enumerating the performance standards and process practices deemed "best." In theory, such immaculately networked cultures are supposed to "empower" people to be better employees. In practice, these knowledge-management networks and "best practice" databases create brave new infostructures that effectively enforce employee compliance with organizational norms.

To be sure, the Hewlett-Packards, Memorial Sloan-Ketterings, and other knowledge-management champions prefer not to think of themselves as best-practice blackmailers. Yet the networks to organizational hell are wired with good intentions. You ignore checking in with these databases at your peril. Dis these databases, and you may lose your promotion, your job, or your employment lawsuit--whether you're suing because you've been fired, or being sued for firing.

Consider: Did you thoroughly review your company's Diversity and Sensitivity Training Best Practices website before launching your departmental re-org? Funny, a review of server activity reveals you spent less time and did fewer click-throughs than any other executive at your level. Gosh, that doesn't look good. Hope the EEOC attorneys don't catch that one.

Or how about the really clever idea you have for reengineering customer service? Well, yes, it's provocative; now tell us again why it's so much better than the three proven ideas already tested and posted on our Customer Service Best Practice page? Why don't you implement them first? Don't you believe in peer review? Aren't you a team player? Hey, don't think of this as intranet intimidation; think of it as conformance to high standards. After all, these are best practices, right? We're only monitoring you to ensure that you are doing our best. By the way, how come none of your initiatives is yet "best-practice qualified"? You know, you have to do a bit of e-mail lobbying to get one approved, because policy is to post only four new best practices per quarter. We don't want to get too promiscuous, you know.

Last year the managerial digerati and corporate counsels worried themselves sick about private "smoking-gun e-mails"--messages that could lead to the kind of embarrassment we've seen again and again in Microsoft's antitrust trial. Today they'd be better off worrying about whether database-driven blackmail is the sort of best practice that invites gleeful external scrutiny even as it incites passive-aggressive managerial mutinies.

The simple reality is that cherished business ideals like best practice are as much about creating cultures of compliance as building processes for profitable productivity. Precisely how does the enterprise declare a practice worthy of intranet promotion and emulation in the first place? Genuinely impressive results? Your wannabe Jack Welch CEO's declaration? McKinsey & Co.? A--God forbid!--FORTUNE column? And if your performance evaluation isn't based in part on how well you draw upon these best-practice resources, then what's the point of having them? Promulgate the wrong stuff on your Net, and instead of amplifying innovation opportunities, you may just as easily smother them. Practice best practices...or else!

The thorniest examples of how Technologies of Best Practice can infect your business come from health care. Sloan-Kettering has been developing a sophisticated "disease-management system" database to track both standard and experimental therapies for cancer patients. As more diverse information gets integrated, difficult questions emerge: How does "best practice" or even "standard practice" get renegotiated and redefined as more data come in? What if the data reveal that certain physicians are consistently aggressive or passive with particular therapies? Should patients be steered toward the statistical median of treatment? Or do we defer those life-or-death medical definitions of "best practice" to individual physicians? Obviously, it would be a foolish physician who tried to modify a cancer therapy without running it by this internal best-practice database.

Do the disease-management databases turn into software scalpels for malpractice lawyers looking for empirical evidence that their clients received inadequate treatment? What do you think? "As a general rule, the more good data we have, the more [productive] arguments we have," says one doctor. But, he adds, "we're doctors, not statisticians.... There's a real conflict between the best standards of care for a particular group and the standards of care for a particular individual."

There's the nasty question: Does the best practice of putting best practices on the intranet force everyone into conformance with some arbitrarily defined best practice at the expense of innovation? It's unclear whether better insights into best practices make a culture more innovative or more conservative. It might even make more sense to publicize the "worst practices," punishable by dismissal and to be avoided at all costs. After all, the Ten Commandments stress "Thou shalt not."

These are precisely the digital dilemmas confronting every knowledge-intensive business. But the Panglossian perspective on a culture of best practices seems based on a willful ignorance of how most organizations manage themselves.

Just how sustainable are "best practices" in a world built on the premise that change is the one constant? Thanks to the irresistible rise of networks, the distance between making a virtue of necessity to making a necessity of virtue is vanishingly small.

MICHAEL SCHRAGE is a Merrill Lynch Forum Innovation Fellow and a research associate with the MIT Media Lab.