Best practice in business

Best practice in business means finding - and using - the most effective ways of working to achieve your business goals. It involves keeping up to date with the ways that successful businesses operate, and measuring your ways of working against those used by the market leaders across your and other sectors.

This measuring is known as 'benchmarking'. It allows you to compare your business with successful peers across sectors. Use it to highlight gaps in efficiency, quality and innovation, and identify where your business could improve. See how to benchmark your business performance.

Benefits of best practice for businesses

Adopting best practice can help you:

• 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

Standards for best business practice

Standards are fixed specifications or benchmarks, established by independent bodies such as the British Standards Institution (BSI). They cover:

• technical standards - precise specifications against which you can measure the quality of your product, service or processes
• management standards - models for achieving best business and organisational practice

Applying the right standards will help you embed best practice across your business, and check your work against objective criteria - for example, in manufacturing or service quality. See how to make best use of standards.

Management is a key area of business. Following management best practices can help ensure clear direction, staff motivation and adaptability in driving business success.

Examples of management best practice

Management best practice involves:

• communicating a clear mission and strategy
• leadership by example
• setting realistic and achievable targets
• using an open and communicative management style
• clear and careful strategic planning

Tools to help achieve management best practice

You can use several business tools to achieve management best practice, including:

• benchmarking against competitors
• forecasting and financial planning
• strategic planning for growth
• performance monitoring with KPIs

See more on strategic planning for business growth.

Sharing objectives and strategies with staff through a strong communications approach is an essential part of management best practice. It help everyone understand where the business is heading, and how they (individually and as part of a team) fit into this picture.

Measure business performance

Use key performance indicators (KPIs) to measure progress in achieving varied business objectives (for example, sales, profitability, staff turnover) and identify areas that need attention. Tools such as benchmarking, business planning and performance monitoring will help you measure your performance and compare it with that of your peers and competitors and against your own objectives.

Where necessary, 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 you with any future planning.

Change management best practice

You can apply management practices in change initiatives as well. These can help provide structure and control to planning and implementing change in a business. Learn more about best practices in change management.

Successful businesses are often those that attract, develop, motivate and retain top talent. Following HR and people management best practice can help you get the most out of your staff.

Examples of HR best practice

Key business strategies for embedding HR best practices in business include:

• involving employees in the development of the business
• communicating with employees
• adopting flexible working and policies that encourage equality and diversity
• adapting to hybrid working arrangements
• setting targets and rewarding achievement
• offering employee development and training

See also what is best practice in business.

Use staff input to improve business practices

Employees can drive improvements across your business. They are often best placed to see what improvements to working methods you can make and where, or the first to notice market demands changing. For example, production staff will be aware of inefficient production processes, while customer service staff will know exactly what your customers think about your product or service and what they commonly complain about.

You can use this knowledge to involve employees in developing improved ways of working. This is likely to make your staff feel valued, as well as help you gain their trust, commitment and buy-in when implementing changes. Poor communication, on the other hand, can result in misunderstandings and mistrust from your staff. 

Read more about the advantages of good employee communication.

Improve people management

Good people management should extend across all areas of your business. Recruitment, training and people development, working practices and the working environment are all areas which you should continually review to see where you can make improvements.

Use tools like performance appraisals, quality circles, cascade briefings, 360 degree feedback, and internal communications to help you get the best from your employees. Learn more about managing staff performance.

Most businesses experience operational issues that can be resolved through the introduction of best practice. This includes, for example:

• quality management standards and systems
• stock control, delivery and supply chain management
• purchasing and ordering policies
• information management

You can identify which operational areas will benefit from best practice by:

• benchmarking
• internal analysis
• reviewing appropriate national and international standards

Quality management

If the quality of products, services or processes is a concern in your business, introducing quality management systems can help. Examples of such systems include:

• Total Quality Management
• ISO 9001 standards
• automated stock control
• just-in-time ordering and delivery
• lean manufacturing and supply

After you identify areas for improvement in your business, you can implement the necessary changes. Keep your employees, suppliers and customers aware of what you are doing to avoid disruption to your business. Follow, as much as possible, best practices for quality management standards and change management in business.

Sales and marketing strategies are vital to business success. They help you reach more customers and sell more products or services. Align these efforts closely to follow best practice, boost lead generation and increase revenue.

Benefits of aligning sales and marketing

Coordinated sales and marketing teams typically achieve:

• higher customer retention rates
• higher sales win rates
• increased revenue growth
• faster growth
• faster profit growth

Sales and marketing alignment also shortens the sales cycle and links return on investment directly to marketing materials.

Key elements of sales and marketing business best practice

Technology now largely shapes the buying behaviour, so sales no longer have full autonomy over the buying process. Marketing has an increasing role to play, as it offers a critical link to understanding the buyer.

Coordinate your sales and marketing to gather a clear picture of your target buyer and the different steps in their buying process. Align on:

• shared revenue process and goals
• consistent messaging (eg for sales pitches)
• content strategy for both teams
• lead follow up or handoff process
• service level agreements, if necessary
• regular communications

Leverage technology, including websites, social media, pay per click advertising, search engine optimisation and email marketing to align your sales and marketing efforts.

Benefits of digital marketing best practice

Some of the benefits of digital marketing include:

• cost-effectiveness - it is often much cheaper than traditional marketing
• measurable results - help to make improvements, as well as reveal the return on investment
• new markets - online channels can open your business to a global market
• personalisation - messages can be targeted and unique to individuals and groups of customers

As with all best practice, it is important to plan your digital marketing carefully. You must also comply with any legislation that applies to electronic business communications or online transactions.

Building a culture of innovation and creativity in your business can help you stay one step ahead of your competitors. It keeps your products and services fresh and in line with what your customers need. By following best practices, you can react more quickly to changing markets, customer expectations and needs, and you are likely to see changes coming before others do.

Innovation best practice

Best practice in innovation involves constantly looking at your existing products, processes and procedures to see what improvements you can make. For example, you can innovate through:

• continuous product or process improvement
• better product design
• applying new technologies like AI to existing or new offerings

Innovation can be small tweaks or major changes, from internal teams or external ideas like customer feedback. Strong leadership, motivated staff and a 'how to do better' mindset drive success. See more on continuous improvement for better profitability.

Despite common belief, innovation doesn't always happen spontaneously. Innovative businesses often have strong, inspirational leaders and management, and well-trained and motivated employees. These businesses constantly look at every aspect of the organisation - not just its products and services - and ask the question 'how can it be done better?' 

You should regularly and intentionally plan for innovation in your business.

Learn more about the common approaches to innovation and find seven ways to encourage innovation in your business.

You can give your business a distinct competitive advantage by making good use of information systems and technology, including new technological advances in artificial intelligence, cloud services and cyber security.

Importance of technology in business

Technology has transformed the way businesses communicate and interact with customers and suppliers, market themselves, access information, and buy and sell products. 

Tools like video conferencing, webinars and mobile devices enable different ways of deploying staff. Initiatives like hot-desking and remote working can increase productivity, improve communication and facilitate flexible working methods. Even in the smallest companies, integrated databases and systems can bring significant cost savings and improvements in efficiency.

Start with a technology needs assessment and develop an IT strategy to identify and implement IT best practices.

IT security best practices

Cyber risks threaten any digital operation, so it's vital that you follow IT best practices to protect your business online. These may include different safeguards for information access, such as:

• strong passwords and multi-factor authentication
• firewalls, antivirus and endpoint detection
• security software, including patches and updates
• staff training on secure IT practices
• safe and regularly tested backups

Read more about cyber security for business.