Savvy executives recognize that a company’s core organizational and operational processes are crucial to realizing its competitive potential. These organizational processes integrate the goals of the business into its employees’ day-to-day activities via routines. Executives also know that a primary route to the development of such processes and practices is the study of best practice. The enterprise’s capacity to flourish depends in part on their ability to capture and embed best practices from their own and other companies. Without mechanisms that facilitate the sharing of best-practice knowledge — such as visits to exemplar companies, communities of practice and the use of experts — companies would be consigned to reliving the same mistakes day after day. Searching for and then articulating, refining and embedding best-practice ideas brings companies in a sector to a level playing field. Those companies that fail to adopt best-practice processes rapidly become complacent laggards.1
But our research into high-performing companies shows that while the search for and adoption of best-practice processes is indeed necessary, it is not sufficient. (See “About the Research,” p. 50.) Other types of processes, which we call “signature processes,” also can be crucial. We find that a unique bundle of signature processes combined with industry best practice ultimately enables a company to prosper and compete.
We use signature to describe how these processes embody a company’s character and signify their idiosyncratic nature. Signature processes arise from passions and interests within the company; by contrast, concepts of best practice arise outside the company. So while one task of every executive is to find and adapt best practice, in a sense bringing the outside in, an added critical task of management is to learn to identify and preserve the company’s signature processes. This added duty might be thought of as the need to bring the inside out.2
The distinction between a signature process and an industry best practice is not absolute, however. If... To read the complete article, login or sign-up using the form below.
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