In this article we consider whether best practice is always best. On the face of it, best practice ensures a certain standard, but is it a luxury that only businesses with time and money can afford, and when might best practice hold you back from being successful?
What is business best practice?
Best practice helps you to minimise risk and maximise opportunities. It’s about following recognised professional and industry standard approaches, processes and codes of conduct in every part of your business to achieve the best possible outcomes.
Why invest in best practice?
Best practice should be the benchmark for everyone in your business to aim for, so your business has the best possible chance of success i.e. achieving your long-term vision and goals.
It’s tempting (and easy) to cut corners, but businesses that don’t follow best practice can only survive for so long. When there’s a downturn in business, or employee or client or partnership relationships break down (and these things happen at some point in nearly all businesses), it’s typically the businesses that have followed best practice and those that are agile and innovative that survive. So, why wouldn’t you want to invest in best practice?
Does best practice lead to mediocracy?
Best practices are tried and tested and so named because they consistently help businesses to improve quality and performance. Some people might argue that best practice leads to mediocracy. Well, that would be true if everyone followed best practice.
Indeed, in some cases best practices could lead to mediocracy and may hold you back. For example, if everyone follows the same production guidelines for making widgets, then every business is likely to achieve the same level of performance and quality widgets. So, how do you differentiate your widgets from your competitors’ widgets and achieve business success?
The answer is to adopt best practices across the whole of your business rather than adopting them in isolation. Used in isolation, best practice can lead to mediocracy.
How to invest in best practice?
Best practice takes time and money to implement. With limited resources, you may not be able to invest in and adopt best practice across the whole of your business straight away. Instead, you need to be pragmatic and prioritise.
What are the rules of business best practice?
Best practice is all about planning, processes and people.
PLANNING is key to developing strategy and implementing PROCESSES efficiently and effectively, whilst PEOPLE are essential to make everything happen. People are the driving force behind every business.
There are no rules as such, although in some industries and professions, there are prescribed best practices and everyone must follow those best practices to retain, for example, their accreditation or professional status. In some sectors, such as business and people management, there are many approaches. Often, they share common elements of best practice, but their terminology may be different. In most cases, it doesn’t matter which approach you adopt, so long as everyone in the team is on board with it and understands the terminology you are using.
It is better to adopt best practices than not, because it helps to ensure everyone is on the same journey, working towards the same desired outcomes. If you don’t know where to start, then why not start with Business Clan’s rules for best practice…
Business Clan’s first rule of best practice
Our favourite starting point is a simple best practice approach to the planning process.
PLAN, DO, CHECK, ACT
This is a cyclical approach to planning. Best practice always dictates that you should PLAN – be proactive rather than reactive, so think strategically and act tactically. Then you need to get on and DO it (don’t procrastinate); review performance regularly and CHECK and learn from what worked, what didn’t work and why; and ACT on insights.
If you start with this best practice approach, you can layer in best practice in all areas of your business.
Business Clan’s second rule of best practice
Our second rule is to take a holistic approach to planning which includes how you measure success.
It was noted above that if you adopt best practices in your production processes, then your widgets will be as good as every other business that adopts best practices in their production processes. However, to stand out and achieve success, you also need to follow best practice in other areas of your business.
For example, if you also follow best practice when it comes to branding and marketing you will be able to expertly target and communicate what your brand stands for to reach your target audience, and position your product or service so people buy from you rather than your competitors. In terms of staying ahead of your competitors, you also need to invest in best practice approaches to both research and development, and people management. People (or HR) best practices will help you to engage and retain your staff, so you have a dedicated team whether they are working on new product development, in charge of health and safety, or delivering the best possible customer experience.
To help you implement best practice across all the components of your business, start by thinking about your business model. Here at Business Clan we use our own CLAN Framework. This framework helps you to take a best practice approach to thinking about all the inter-related components of your business model within the context of each other and the external factors affecting the market you’re operating in. External factors include market size and demand, competitors and the PESTLE factors i.e. political, economic, social, technological, legislative and environmental factors. Our CLAN Framework helps you to plan holistically.
In addition, you should also take a holistic approach to measuring success. We use our own CLAN Scorecard to measure business performance across the key components of our business model. It is based on the Kaplan and Norton balanced scorecard best practice methodology. The main difference is that our scorecard has an easy acronym to remember the four key perspectives for measuring business performance – CLAN – as shown in the figure below.
Measuring business performance across the four key perspectives will give you a balanced view of how your business is performing. Remember to measure what matters most and that the sum of incremental gains across the business will be greater than the sum of their parts. This is the Kaizen best practice approach to continuous improvement.
Business Clan’s third rule of best practice
Our third rule is to prioritise. Even with the best will in the world, you can’t do everything, so utilise your resources (time and money) wisely. We appreciate that this is easier said than done when there are so many inter-related aspects to consider and factors outside of your control, but don’t be put off. With practice it gets easier.
Conclusion – best practice leads to long-term success
If business was easy, then every business would be a success. The reason it’s not easy is because there are so many factors at play and most businesses have limited resources.
Therefore, start with planning, take a holistic approach and prioritise. This simple approach to best practice will help you to minimise risk and maximise opportunities to achieve the best possible outcomes for your business.
