Best practices aren't enough

I’m currently reading Brett Steenbarger’s “Trading Psychology 2.0: From Best Practices to Best Processes.” I’m a fan of Dr. Steenbarger’s work and bought his new book as soon as it was released.

While this book is targeted at traders and investors, there’s a great deal of knowledge that can be gleaned from it that can be applied to many other aspects of your personal life as well as business.

For example, the premise of the book is that the four main ‘habits’ a trader should focus on to improve their trading are “adaptability, creativity, productivity, and self-management.”   Those four habits are ideal of any individual and any company to focus on as well.   Just like a trader, a business can have the best strategy in the world but if they can’t execute on that strategy and adapt to changing markets in a creative way, the strategy is (or will become) worthless.

I ran across this nugget in one of the first chapters and thought it worth sharing:

…what makes traders good are best practices—sound methods for deploying capital and managing risk. What makes traders great are best processes: detailed routines that turn best practices into consistent habits. Adaptability, creativity, productivity, and self-management: These aren’t just things that the best traders have. They are what best traders do—routinely.

Emphasis mine.

Interesting concept isn’t it?  Best practices aren’t enough….to be consistent and remain in business as a trader, consultant, person or company, you need best practices and best processes.  But the key to long-term success in anything is how you build, change and manage your best practices and best processes.

A best practice today isn’t going to be a best practice next year.  The same is true for processes. Something that works today may not necessarily work next year.   You need both best practices and best processes but you also need to have the wisdom to know when those need to change to adapt to the changing marketplace.

This is where the four key habits come into play.  If you can adapt your strategy you can survive.  If you can think of new ways to approach your market and client base, you can survive.  If you can be both creative and adaptable while doing the right things and managing yourself and/or your business, you’ll not only survive but you should thrive.

Best practices aren’t enough. You’ve got to add best processes into the mix.  Additionally, you (or your business) need to have the smarts and creativity to know when its time to change those processes and practices to better align yourself and your strategy with existing or future market conditions.

Back to the book…while it is targeted at trading, there are a lot of very valuable insights that can be applied to all aspects of your life…I highly recommend it.