A few weeks ago, I was asked to provide a not for profit community organisation with a business perspective on the topic of best practice.

It made me think about what the fundamental planks are of good management for any organisation, whether a private firm, a charity or a government instrumentality.

And in doing so, I realised that we are invariably sending the wrong messages about what constitutes sound business practices and successful management behaviour.

Those urging organisations to be more business-like usually focus on the need to cut costs in their operations, to weed out inefficiencies, reduce layers of management, to downsize and generally to do more with less.

But the advice that I gave my audience in the not for profit community organisation about best business practices was all about growth and creating new opportunities.

I focused on words like creativity, innovation, novelty, speed and know-how. And not on the terms usually associated with the business perspective – managerial efficiency, cost containment, downsizing, process re-engineering, maximising shareholder value and restructuring.

From the Australian Business Foundation's research and reading, it is clear that deep-seated changes are underway that affect the very basis of competition in industry and commerce; the way businesses operate and how they relate to their consumers, their suppliers and the other stakeholders of the enterprise. This fundamentally affects what constitutes best practice business management and operations these days.

Successful businesses are characterised by risk, innovation, speed and agility. They are outward-looking, close to their customers and operate globally, irrespective of where head office is or where their products and services are produced, or whether they are even big enough to have a head office.

Their real assets are the intangible ones – market intelligence, skills, experience, technical know-how, customer service, a company's ability to learn – not the physical assets of land, buildings, equipment, employees we usually consider to be a business' tools of trade.

Commercial success and competitive edge comes not from low cost, high volume, standardised products. It breeds on being quick off the mark with a new idea or a successful adaptation or improvement that really satisfies a consumer need and that distinguishes what you offer and how you do business from the rest of the pack.

This is called first mover advantage and these days it doesn't last long. With fast, easy and cheap access to information worldwide, most innovations are quickly imitated and copied.

Therefore, best practice involves continuous improvements. Firms must be adaptable in their work methods and people organisation.

They are likely to invest heavily in training or other means of work-based learning and transferring knowledge within and outside the organisation.

They will be organised to create new opportunities, to re-configure their products and services, to find new markets and to capture value from all of this.

Some even argue that truly successful businesses must eat their young, cannibalise even their most successful business efforts in order to create the fundamentally different, emerging business ventures of the future.

Whatever the answer to best business practice, it is a more interesting story, a more challenging task than mere cost-cutting and downsizing. It seems to me that no discerning business leader has ever down-sized their way to greatness.

There is a world of difference between conservative stewardship and intelligent entrepreneurship.