Internal vs. External Best Practices
By emphasizing "context" in the overview, we have made a sharp and important distinction between internal and external best practices. Internal "best" references your own range of practices and performance. External "best" references practices, performance and contexts of other organizations.
Many external best practices are broadly applicable and may well be good candidates for your business. The proper place for these in the grand scheme of things is as innovations.
Innovations, by definition, are new — at least to your business. They are riskier and may require significant change to implement. Their outcomes in your context are uncertain.
Internal best practices, by contrast, are known, not new. They have already been implemented somewhere in your business and you can find out how good the outcomes have been. Change is often minimal since the implementation exists. You may have to tweak it a bit to roll it out broadly but the unknowns are far fewer in general.
Start with Internal Best Practices
There is nearly always a pot of gold available in implementing your current best practices throughout the organization. Your current performance reflects an average between best and weak practices. Any significant shifting of this average toward the best practices side can have a huge impact.
Yet, very few organizations have any systematic and routine way to identify their own best practices and to bring the non-best majority upward. Organizational silos are just one of the obstacles to taking a best practice out of its current location and moving it to other units.
Most businesses cannot even list their best practices. They have no real idea what their best practices are or where such practices may reside. This is a good place to start.
External Best Practices as Innovation
Our view is that external best practices are most effectively introduced as part of managed innovation. Such practices are nearly always new in critical aspects and require careful piloting and evaluation.
Minor changes can be treated as kaizen improvements. They typically affect small parts of a broader process and can be managed more closely. Deviations from an expected outcome can usually be absorbed and fixed without major disruptions.
Major changes can often be hugely disruptive and can face tremendous internal resistance. Sizable investments are common. Outcomes are uncertain in nature and magnitude, making the risk in general very high.
Product innovation and business practice innovation share a great deal in terms of their disruptive potential and risk.
Innovation Means New
Our emphasis is not on innovation as it is normally understood — new (i.e., to us at least). Our "innovation", if the term applies, is simply in doing what you do now but smarter — in more productive ways.
Working smarter means applying knowledge, analysis and intelligence to existing practices. The practices are not new, and thus not innovative as this term is generally understood.
Innovation generally entails substantial risk, cost, disruption, and resistance.
Smarter as we have defined it generally means low risk, low cost, fast results, and minimal resistance.