There is not much in business that is as unexciting or demotivating as figuring out, writing and enforcing a standard operating procedure (SOP). But, standard operating procedures lead directly to business success, and they need to be done.
What is exciting and motivating is better quality, the creation of a skilled workforce, decreased warranty costs, higher profits, a reduction in turnover/sick time, fewer accidents, healthier margins, lower waste, less rework, more sales, reduced legal/financial risk, increased employee productivity/efficiency and improved customer satisfaction.
What is a standard operating procedure?
A SOP is a written, detailed “how to” document – a road map to business success. It describes the step-by-step actions required to complete a routine business task. The goal is to get consistent employee performance; each task ought to be performed correctly every time. It is supposed to be in compliance with laws, regulations and the company’s policies.
It should also be:
- Available at the place where the work is done, as well as in operational manuals.
- A simple, clear, easy to read outline.
- Brief with only necessary actions included.
- Used for employee’s training.
- Focused on safety and efficiency.
- Updated every year, or every other year, depending on the business’s changing needs.
Where do you need standard operating procedures?
SOPs are management tools designed to achieve business success. They should be used everywhere.
- Production/operations
- Sales and customer service
- Human Resources
- Employee training
- Legal
- Financial
Why do you need standard operating procedures?
Whether it is a document, or a workflow app, creating SOPs is time-consuming. But, if you want sustainable growth and stability, they are vital. In the long term, it is well worth the initial effort and will save you time, trouble and frustration in the future. Here are a few of the reasons why your business’s success is more likely if you have them.
Springboard for strategic planning – You cannot get to where you want to go until you know where you currently are. Going through the process of creating SOPs gives you the chance to see the real – concrete information, not guesses – state of your organization. The clearer the understanding you have of its processes and employees the better your ideas will be for future plans and strategies.
Saves time and money – When the same job, process or task is done in different ways by different people, the time and money used to complete it can wildly vary. It is just good sense to put a system in place that trains employees to accomplish more in less time and money.
Provides consistency – Quality, quality, quality. Productivity, productivity, productivity. One of the biggest benefits of enforced SOPs is that they make sure all employees are performing a job or task in the same correct way, no matter who is doing it. They make it easier to replicate good behavior throughout the company. This allows you to grow quickly, profitably and efficiently.
Improved communication – A written procedure makes everyone’s job easier. When used properly it eliminates guesswork and misunderstandings for owners, managers and employees. How a job should be performed is right there for all to see, refer to and follow. In addition to the “how,” a SOP lets the employee know “why” they are doing something a certain way.
When a person understands and agrees with the “why” then they are more likely to do it right. If they do not understand or agree with it, then managers have a chance to provide additional training and education. There is also an opportunity for the employee to give valuable suggestions on how to improve the job and the SOPs.
Creates a safer work environment – Effective risk management requires employees to perform in a safe, consistent way. When employees perform in different ways there can be a legal or regulation liability.
It happens every day – good, well-intentioned owners are beaten by a poorly run, unregulated workplace. Their companies fail because they do not know that, when properly used, a standard operating procedure is essential for business success.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:
