Trillions of dollars flow through the U.S. financial system in a multitude of transactions between people, businesses, banks and corporations and whether these actors are aware of it or not, standards and regulations are necessary to the success of these transactions.
From an economic standpoint, standards and regulations and the best practices that inform their establishment, have the intended effect of levelling the economic playing field while simultaneously encouraging competition amongst economic players. Standards protect the diverse interests of each of the players in these financial transactions.
Best practices are defined as proven solutions that help to address a problem or accomplish goals. The concept behind establishing these standard ways of doing things is that if a method is confirmed as effective, there is no need to try to ‘reinvent the wheel’ which takes time, effort and money.
Best practices can be used and adapted to achieve solutions or shared goals, but standards of adoption may vary. Processes and methods and can be voluntary or ordered by an authority such as a standardization group, industry and professional organization, regulator, government agencies or upper management.
The establishment and acceptance of best practices take place in the academic world through published research, in the work of foundations, think tanks, private funders, government agencies and advocacy organizations. Libraries, databases, networks and the internet are all platforms which support widespread accessibility.
Increasing acceptance and adoption helps practices gain status. Best practices have to be measurable, testable, replicable and proven successful by the industry-leading authorities, innovative companies and organizations that pave the way by adopting new approaches that will become established methods.
Practices are viable and applicable if they are designed with a specific community, organization, process or application in mind. When developing them, a close look is taken at the people and issues in question to develop a context in which underlying problems and symptoms can be addressed.
Best practices must complement the culture and philosophy of the initiative, organization or company. Adequate resources and the commitment of all operational levels are essential for best practices to take root.
A clear mission needs to be established under the direction of a competent management team, complete with training and support. Best practices have to be comprehensive and well-understood, cost-effective and scalable, with a collaborative spirit and a flexible approach to adopting new techniques.
A successful, credible operation is supported by its adoption of best practices. In the highly competitive global market, the standards are no longer a choice but rather a necessity. Uniform methodologies take away a lot of the guesswork and in many cases improves the viability, credibility, effectiveness and competitiveness of a company or output and impact of an organization.
Though change can be difficult, the acceptance and successful adoption of best practices in place of the status quo can improve processes, efficiency and output and simplify operations, which makes it easier to justify the change and validate the efforts to accept innovation.
Benchmarking is an important part of the process of establishing best practices when choosing which ones to adopt. Benchmarks serve as a reference point and can be a useful management tool by which best practices are integrated.
There are four types of benchmarking: internal, competitive, functional and generic. These serve as ways in which methods can be established, and existing practices and protocols can be measured internally, against competition, against similar industries and even unrelated industries.
To ensure the successful adoption, it is important to begin by clearly defining the terms. For instance, the processes and issues need to be identified and addressed and groups and individuals that will be affected by the newly established practices have to be ascertained.
Establishing benchmarks and best practices requires extensive research, which means a great deal of data must be gathered and analyzed. This helps to determine trends, gaps and ultimately, will contribute to proving the process and creating the best practices.
Just because the name implies superiority, best practices, though adequate, may not actually be the greatest way of doing things. Innovation and the willingness to adapt is a crucial element of creating benchmarks, and as a result, new best practices continue to emerge.
Because innovation plays such a vital role in the establishment of criteria and new best practices, standards and regulations evolve to reflect the changing realities in various companies, organizations and industries. When one benchmark is established, it means many others could need recalibrating.
Best practices are validated where consensus is reached, goals are satisfied and the original issue is solved. Once the potential of a new best practice is discovered, it is necessary to develop and institute a plan of action. Again, this reinforces the importance of a strong management team to implement the plan and see it through.
Evolving with the changing possibilities of new ideas can lead to improved performance and superior results. It can be as simple as developing new equipment and technology or finding new uses for existing tools and technology to optimize resources and production while reducing costs.
There are a number of organizations that play an important role in the standardization of best practices. These standards help to specify the quality, safety and efficiency of product output, services and operational systems. They also support international trade.
The International Organization for Standardization (ISO) is one of the most highly regarded authorities in the establishment of relevant standards and best practices. ISO engages its membership in sharing knowledge and develops voluntary, consensus-based international standards for almost every industry.
With a membership of 163 national standards bodies and a total of over 21,000 published documents, ISO is celebrating seven decades of success as an independent organization dedicated to supporting innovation and addressing global challenges.
ISO certification bolsters a company’s reputation and improves competitiveness in the market. For instance, ISO 9001 certification speaks volumes about a company’s ability to deliver consistent product and service quality in line with international standardization which offers peace of mind to both investors and clients.
Other common and well-known standards serve as a point of merit. These codes cover everything from environmental, food safety and risk management to social responsibility.
The National Standards Institute (ANSI) is the U.S. representative to ISO and serves as the national voluntary standards system. It was established in 1918 by three government agencies and five engineering societies, and through its efforts, ANSI enhances competitiveness in the U.S. by forming standards and ensuring conformity through assessment.
Membership includes government agencies, organizations, companies, academics and international bodies. Together with its affiliates, ANSI represents the interests of its members in standardization and global competitiveness.
In Canada, the CSA Group, previously the Canadian Standards Association, has developed standards for fifty-seven industries including aerospace, energy and resources and healthcare. The first chapter was established in 1919 and has become the largest standards development organization in Canada with the widest reach across industries and sectors.
CSA Group has a library of thousands of standards and has become accredited in both Canada and the U.S., which helps to improve cross-border transactions by verifying the credibility and viability of products and services from the start.
As well as standards related to safety, performance, quality, process, best practices and environmental considerations, CSA Group also offers testing and certification, product evaluation, code and standard development, education and training, energy efficiency verification, cyber security, risk management, workplace safety and more.
Regardless of the organization or its jurisdictional bounds, all of these groups are dedicated to the same goal. They aim to advance global established, consensus-based, voluntary standardization and certification which helps to keep international trade functioning and protects economic actors.
Whether it is the Occupational Safety and Health Administration under the direction and guidance of the U.S. Department of Labor or the Canadian Centre for Occupational Health and Safety, each organization serves a similar function dedicated to continuous improvement through the acceptance of best practices in the interests of its members.
Though they are touted for their potential and the impact they can have on processes, applications and outputs, best practices are not always enough to keep businesses competitive and organizations efficient. Best practices and innovation must occur hand in hand, and this requires a significant organizational commitment to promote and integrate new best practices when they are validated.