Best Practice: an overused cliché meaning something that everyone wants to use, but no one knows how to define.

Many people start the New Year with a resolution, “a course of action determined or decided on” according to one definition at www.dictionary.com. Some companies also resolve to adopt “best practices” during the coming year. But are “best practices” being defined in a way that benefits the bottom line?

Using efficient, effective, proven approaches to everyday business is often referred to as “best practices.” Strategies and tactics used by the competition (or even internal knowledge) can help shape direction, but specific plans must be implemented by employees throughout the organization to really effect change.

Usually best practices are sought externally – learn what the competition does well and endeavor to duplicate those actions. Sounds simple, but transferring the knowledge about these practices is overwhelmingly tricky. Also, many companies overlook the best procedures already being performed by individuals, locations, or divisions within their own ranks.

If Only We Knew What We Know: Identification and Transfer of Internal Best Practices (1), by Carla O’Dell and C. Jackson Grayson, discusses the challenges of accessing the vast, yet untapped, amount of knowledge presently existing in most companies.

O’Dell and Grayson identify a number of reasons why transferring best practices internally is difficult: organizations structured in silos, cultures which value individual performance, virtual workspaces, over-reliance on databases versus hands-on learning, and little emphasis on rewarding sharing behavior.

The authors also name five motives which compel companies to start cultivating internal best practices. First, a call to action by executive leadership is usually spurred by a need for cost reduction, or by suggestions from customers. Second, demonstrated success (in any undertaking) inspires further effort. Decentralization and downsizing are the third reasons why many companies introduce knowledge sharing activities in the field, often out of necessity because of fewer corporate personnel.

Fourth, external benchmarking can create a sense of urgency and prompt internal action. Finally, recognition of potential gain instigates employees at all levels to become more keenly aware of internal best practices.

Once the need for sharing information has been identified, and senior leaders are motivated to take action, what steps can be taken to find and transfer these best practices? O’Dell and Grayson point to four important approaches: best-practice teams, benchmarking teams, knowledge networks, and internal audits.

The organization’s strategy determines top process improvement opportunities and then best practice teams are formed around those processes. Best-practice teams are usually made up of functional experts and other professionals in similar divisions throughout the company. They meet face-to-face on a regular basis to share successes and innovations, but communicate via email as often as daily. They are responsible for defining what “best practice” really means for their team. For example, Chevron’s best practice teams have definitions for Good Idea, Good Practice, Local Best Practice, and Industry Best Practice.

Benchmarking teams are recommended by the authors as a way to identify internally the kinds of information lacking throughout the organization. These teams are formed from the top levels of the company, in each of the major functions. Team members work together to assess current positions, identify areas for improvement, then search internally and externally to find solutions being implemented by others. For more information on benchmarking, stay tuned for the next Lessons Learned, “Benchmarking,” which will be posted in two weeks.

Knowledge networks exist at lower levels throughout the company, exchanging and accepting ideas with their respective best practice and benchmarking teams. Internal audits include assessing and rewarding individuals and teams for sharing knowledge.

Once best practices have been identified and cultivated, simply adding them to a database will not improve the flow of ideas throughout the organization. (See Dr. Handfield’s Top Ten Reasons Why You Can’t Automate Human Relationships, parts I and II.) The best practices teams goals should include harnessing, disseminating, and facilitating the ideas into each level of the organization. Remember, Confucius says, “I hear and I forget. I see and I remember. I do and I understand.”

By learning to share best practices internally, Texas Instruments and Chevron saved over $500 million and $650 million, respectively. Other organizations were as successful.

References:

(1) O'Dell, C. and Grayson, C. J. (1998). If Only We Knew What We Know: Identification and Transfer of Internal Best Practices. California Management Review, 40(3), 154-174.


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