This article challenges the notion of best practices as universally applicable rules, takes a closer look at why lenders crave them and discusses what we can do to break the dependence on the false authority of best practices.
Of late, the business world in general has been somewhat obsessed with the notion of best practices. It has gained official bandwagon status, but the substance behind the notion is questionable. [paragraph] In fact, it may be at that tipping point in every fad's life where it seems to have an equal number of proponents and critics--an Internet search turns up plenty of skeptical opinions. Yet, while there are plenty of vocal critics that challenge the idea of best practices, the allure seems simply too difficult to resist. The mortgage industry is not immune. [paragraph] By definition, best practices are those generally prescribed as most effective and suitable for a particular application or as practices that consistently achieve superior results. The term likely began as a catch phrase to describe generally good advice and ideas for consideration. But, in practice, it has evolved to hold much greater authority. [paragraph] The most enthusiastic subscribers view best practices as definitive rules that anyone can confidently apply in a simple, one-size-fits-all fashion. The "generally good advice" definition is not particularly bothersome. It is perfectly reasonable to seek perspective to generate ideas and perhaps even emulate some approaches in the expectation of better results. But the latter, more seductive, definition is the one that prevails and troubles.
Best practice is a delusive concept that we too easily toss about. There are no concrete criteria or standards for validating that a practice does in fact produce consistently superior results over a broad range of applications.
There are few best practices for which there is conclusive evidence and research to support them. Best practices become best practices simply because someone declares them so. And willing subscribers accept them with few misgivings or questions about how they came to be.
Absent real evidence, or perhaps even in the face of contradictory evidence, we willingly grant authority to "experts" based on an assumption that they know more, have more experience and offer proven, reliable advice.
The reality is most best practices are nothing more than collections of concepts, methodologies and techniques that resulted in some level of success in a circumstance that is familiar but distinctly unique.
Best practices rely on the principle of standardized approaches that are suited to simple, discrete processes that have few variables at play. Under the logic of "if it worked for Lender A, it will work for me," lenders (and experts) place high stakes on the idea that that they can easily duplicate those practices in their own similar, but not identical, circumstances and achieve the same successes.
The fundamental flaw is that the expectation is based on the assumption that simple solutions can be applied to complex scenarios in a template fashion. Best practices typically ignore context as the critical factor and fail to emphasize that certain conditions must be true to be applicable.
In truth, attempting to hold a best practice to the standard of being applicable in all contexts would cause the concept to crumble under the weight of complexity. The simple, easy solution would no longer be simple, easy or even useful.
The chicken or the egg?