What is a Best Practice?
Quite simply, we define "Best practices" as documented strategies and tactics employed by top-performing companies. No company can be "best-in-class" in every area, but profiled practices have been implemented and honed to help their practitioners perform more profitability or efficiently.
Similar to types of benchmarking, best practices fall under two key categories:
Internal – best practices employed by groups or individuals within a company
- External – best practices employed by best-in-class organizations outside a company that may or may not operate within the same industry
Internal best practices
Within every organization there are functions/units that are top-performers. Identifying, harvesting and deploying the practices employed by these best-in-class units can dramatically enhance organizational performance.
In addition to the performance, the process of finding best practices can generate tremendous innovation and creativity within the organization. Following are some examples of organizations that have successfully leveraged their internal strengths to improve organizational performance.
- Dow Chemical implemented a best practice knowledge management program, saving more than $1 million in its first 18 months.
- Ritz-Carlton in 1992 designed its recruitment and selection interview based on the traits of its best performing employees which proved to be an effective system to hire better and retain employees longer than other competitors.
External best practices
External best practices, true to their name, require organizations to look outward for growth. Specifically, companies can improve performance by assessing the best business practices of competitors or other highly-successful organizations.
Identifying best practices within and outside the industry can often lead to innovative solutions that boost performance levels and capabilities. Following are examples of some organizations that have innovatively adopted practices of organizations outside their industry.
“Learn More About Managing Best Practice Knowledge”
- AT&T reengineered its customer complaint handling process after studying best practices from leaders of express mail, airline and hotel industries.
- Xerox Corporation significantly improved its warehouse function by adopting best warehouse practices from L.L Bean, a catalog order company.