Core business practices, as the term suggests, are the day-to-day or regular activities or policies of a company that fundamentally guide the company as a whole. An example of a core business practice might be a thorough quality check by at least two separate employees before any shipment leaves the factory. When core business practices develop, they are often so ingrained in the minds of employees and managers that they are second nature and are performed almost without thinking.
Factors Affecting Core Business Practices
Many factors affect the core business practices of a company. One of the most important factors is the example set by leadership. If the leadership of a company is seen by employees as performing its day-to-day activities with a high level of integrity, employees are more likely to do the same. Another important factor is the culture of the organization. A culture that takes pride in quality work product is more likely to have core business practices that encourage such behavior.
Changing Core Business Practices
Changing core business practices can be very difficult. Often these core business practices are so ingrained into the psyche of a company that the employees are barely aware that they even exist. They just consider these practices the ordinary course of business. Effecting a change in core business practices requires strong, visible support from leadership and often a realigning of incentives to promote the new practices.
Core business practices can be leveraged to create core competencies. Core competencies are things a business does well that are essential to its overall business strategy. For example, the core competency of a custom bike shop may be its ability to generate extremely quick turnaround on customer orders. A core business practice that might support such a core competency could be starting work on a customer order the same day that it is received, rather than getting bogged down by paperwork and administrative delays.
A competitive advantage is a strength of a company that gives it an edge over its competitors. In the custom bike shop example, the competitive advantage might be providing faster results than any other company in the market. This competitive advantage starts with the core business practices of the organization.