18 Aug Safe Operating Procedures
Are documented systems and safe operating procedures necessary in business and do they add value to a business?
They certainly do and add value to your business.
This is a question that many business owners have to come to grips with as they grow their business, especially start-up SME businesses. Whether we agree or not, business rules or processes are becoming even more important with the growing demands of compliance and risk management and the consequences if you get it wrong.
A lawyer never goes to court with an empty brief case!
Take a moment and think how many court cases involving personnel grievance and/or health and safety settlements could have been avoided, if the business policies, disciplines, rules or procedures had been in place, and if they have been communicated via a formal induction process and most importantly had been understood by the persons concerned.
Does your business have a formal induction process?
My question to the reader is, does your business have documented management systems and safe operating procedures and if so, how effective are they?
Another question that is worth considering is, why do so many businesses not have any documented systems, instead relying on experience, gut instinct, their so called “business savvy”, or relying on others to bring the knowledge to the business? How often does the old “stand by him or her and they will show you what to do” training process still happen?
I believe there are a number of reasons why this happens, and they are usually due to the following reasons:
- They don’t have time to develop them, as they are too busy working in the business from day one;
- They don’t know where to start or how to write them;
- Knowledge is power, so they prefer to keep it close to the chest or in their head;
- “I could be held to account if I don’t follow them”; and/or
- The business owner and others believe systems and procedures are restrictive and block creative thinking or the innovative spirit of the individual.
A number of years ago I had the opportunity to listen to Brad Sugars, an Australian marketing guru. He gave an interesting insight into the value of documented business systems and especially the value that they can add to a business.
He used one of the most interesting and successful businesses in the world as the example – McDonalds. You may not agree with the product, but you can’t fault the service and their success.
Brad asked the question, “What is the average age of a McDonald’s manager?” The answer is between 25 and 30 years old. He then asked for the average age of the young people who provide a consistent and excellent service and who are skilled at onselling the other products to you (e.g. “do you want fries with that?”). They are 15 to 18 years old. These are the same kids whose parents can’t get them to make their beds or keep their bedrooms clean, yet they are helping to run the most successful franchise operations in the world. Why?
The answer is simple:
- McDonalds has systems,
- McDonalds has rules,
- McDonalds has standards and
- McDonalds train their staff to deliver a consistent and excellent service every time, based on those rules, processes and standards.
This may sound simple but how can you apply this to your own business?
One of the key problems facing many businesses is that too many of their employees carry the company’s knowledge and even passwords in their heads. Does this happen in your business?
I call this “head stuff management” and the problem arises when the employee leaves, goes on holiday, maternity leave or dies. In effect, what they carry is the intellectual or proprietary knowledge of your business in their head.
An example of this is when I mentioned to an employee that she was entitled to four weeks holiday, and then asked her who would do her job while she was on leave and how effective would they be. Her response was, “I can’t even have one week off before I have to come back to work to fix or find something for the management”. The business employed 165 personnel. Can this happen in your business?
If this sounds familiar, start thinking about capturing and recording this information ASAP – it will add value to your business. If you don’t, your business could have little or no value if you want to sell it in the near future. Ask the 10,000 NZ baby boomers who are now trying to sell their businesses.
As an example, a business who builds quality boats was approached by an international company who also made a similar product, with the idea of partnering or purchasing the company. The factory review went well, but when my client was asked to show the interested party the management and design systems, he had to admit that they were all in his head. The client lost the opportunity to sell his business at a healthy profit and to also have world exposure to his business.
Systems and safe operating procedures can add value to your business in many other ways such as:
- Proof of due diligence for compliance requirements;
- Tendering for new contracts and achieving preferred supplier status to customers;
- Internal and external auditing for compliance to selected legislation or standards – ISO9001, etc;
- Risk management and potential fault reduction;
- Employee training;
- The reduction of injuries, waste product, rejects, scrap, customer complaints ($$$ off the bottom line);
- Proof of due diligence for HR or health and safety reasons; and
- Insurance investigations – this is increasing especially for health and safety related claims.
In conclusion, do documented systems and safe operating procedures add value to a business? They certainly do – for mitigating business risk, for the growth of the business and its personnel, and for the delivery of consistent, quality, and safe products and services every time.
View some of the Hasmate Safe Operating Procedures here or contact Hasmate today to discuss your requirements.