As your business grows, you will need to change to adapt to new circumstances. You can experiment with different ways of working to see which suits your business best. But this approach is inefficient and may lead you to make inappropriate decisions. A far more effective way of making changes is to look at how successful businesses operate and to introduce their ways of working into your business. Evaluating how your operations compare with the most effective and profitable enterprises, and then using their most successful elements - the 'best practice' - in your own business, can make a big difference.
BEST practice is the process of finding and using ideas and strategies from other companies and industries to improve performance in any given area. It means finding - and using - the best ways of working to achieve your business objectives. It involves keeping up to date with the ways that successful businesses operate - in your sector and others - and measuring your ways of working against those used by the market leaders.
Businesses has used best practice benchmarking over the decades and realized billions in savings and revenues in all areas of business operations and sales.
'As-Is' best practice addresses or includes the present practice followed by the specific company which is planning to implement the changes required to keep itself in the league of other top companies in the industry. This is done in all functional areas like HR, Operations, Finance, and Maintenance. etc.
'To be' best practices are generally the best practices which exist in the industry and have been refined over a period of time. Preventive maintenance, activity-based costing etc. are considered as best practices.
'To be' best practice includes some of the practices which are already adopted globally and are taken as industry standards for swiftly operating businesses in a competitive global scenario.
How do you get best practices?
1. Best practice through benchmarking
Applying best practice means learning from and through the experience of others. One way of doing this is through benchmarking, which allows you to compare your business with other successful businesses to highlight areas where your business could improve.
2. Best practice through standards
Standards are fixed specifications or benchmarks, which are established by independent bodies such as the Nigerian Standards Organization better known by (NIS). NSI develops both technical and management standards:
- technical standards are precise specifications against which a business can measure the quality of its product, service or processes
- management standards are models for achieving best business and organisational practice.
Applying the appropriate standards to your business will enable you to apply best practice across the organisation, and to work against objective criteria to achieve manufacturing or service quality.
Best Practice Areas:
1. Management best practice
Management best practice involves:
- the communication of a clear mission and strategy
- leadership by example
- the setting of demanding but realistic targets
- an open and communicative management style
- clear and careful strategic planning
There are several business tools that you can use to achieve management best practice, including:
- financial planning
- strategic planning
- performance monitoring
Using key performance indicators (KPIs) is an effective way of monitoring your business. KPIs can be used to measure progress in achieving business objectives across a range of activities and enable you to identify areas that need attention. They can also can be used to measure activities such as sales volumes, profitability, quality and staff turnover.
The KPIs you choose will depend on your specific business. They should, however, be related to your overall objectives, be clearly measurable and provide an indication of where improvements need to be made.
Tools such as benchmarking, business planning and performance monitoring will help you to compare the performance of your business with that of your peers and competitors and against your own business objectives. Where necessary, you can introduce new ways of working to improve competitiveness and business efficiency. Having accurate and up-to-date information about your business performance will also help future planning and change management.
Communicating your objectives and strategies is an essential part of management best practice. A good communications policy will ensure that everyone in your business knows the direction in which the business is heading, and understands their own part in its development
2. Best practice in sales and marketing
The right sales and marketing strategies play an essential role in the success of your business.
Developments in technology have opened up entirely new ways to market and sell products and services. Best practice now involves harnessing the power of the internet, email and mobile telephony to increase the effectiveness of getting products and services to the customer.
Even the smallest business can benefit from having a website. Many organisations also use electronic newsletters (often known as e-zines), regular emails and SMS (text) messaging to communicate with their markets. Social and other networks or online forums are increasingly used for business promotion. The benefits of this kind of marketing include:
- worldwide reach - a website can be seen by visitors from all over the world
- lower costs - a website can cost much less to set up and run than a traditional shop
- a level playing field - small businesses can compete alongside the websites of much larger businesses
- better targeting - emails are less likely to be opened by someone else, and opt-in mailing lists ensure that your message is read by someone who wants to receive it
- new markets - a website makes it easier to target customers who were previously out of reach
As with all best practice, it is important to get the implementation right. Your website needs to be thought out carefully, and updated regularly.
3. Improving business operations through best practice
Most businesses have some operational issues that can be improved through the introduction of best practice methods, including:
- quality management
- stock control, delivery and supply chain management
- purchasing and ordering
- information management
You can identify which operational areas will benefit from best practice methods by:
- internal analysis
- reviewing appropriate national and international standards
Areas for improvement could include the introduction of quality management systems such as Total Quality Management or ISO 9000, automated stock control, just-in-time ordering and delivery and 'lean' manufacturing and supply.
When you have identified the areas for improvement, you can implement changes. It is important, however, to keep your employees, suppliers and customers aware of what you are doing, and to make sure that the changes do not cause unnecessary disruption to your business.
4. Best Practice in Information Liquidity:
Much like cash liquidity, the liquidity of information is a measure of business success. In a successful company, data flows smoothly and information is transformed into economic value. Information liquidity is obtained by integration of processes and systems at all levels. Integration should be the driving force behind design, methodology, development and deployment of all IT systems.
5. Business continuity management:
Organisations face a variety of threats to their business continuity, some deliberately targeted and some as a result of external events. It is increasingly important that businesses can assure regulators, investors and stakeholders that their continuity plans will minimise any disruption.
What are the benefits of Implementing Best Business Practices to your business?
A best practice strategy can help your business to:
- become more competitive
- increase sales and develop new markets
- reduce costs and become more efficient
- improve the skills of your workforce
- use technology more effectively
- reduce waste and improve quality
- respond more quickly to innovations in your sector