Unfortunately those systems are usually developed by the employees, locked away in their memory, and changed without considering the impact on connected systems. As a business owner, how do you know when you need to invest the time and resources to get those systems written down?
Five Signals It’s Time
Here are five situations that signal it’s time.
- Your costs are greater than your income
- Your company has proven it’s profitable, and you want greater sales
- A key employee announces he or she is leaving
- One or more positions have a high turn-over rate
- You’re thinking about selling your company
Let’s briefly consider each one.
Your Costs Are Greater than Your Income
This situation often happens when a company has left the start-up stage (thus showing it’s consistently profitable), but then expands too quickly. The existing business systems aren’t robust enough to support the additional load brought by higher sales.
Another common cause is ignorance and confusion about the unwritten policies and procedures that compose the systems needed to execute business operations. When new employees are hired, they lack the system knowledge your existing employees gained while those systems were developed. Unless the existing employees are very good trainers, their trainees will lack the company policy and procedure knowledge needed to capably fill additional positions at the trainers’ level. The result is time and resources are increasingly lost due to putting out fires and dealing with employee frustration.
This situation also happens during the start-up stage while the informal, unwritten systems are still being developed. Here you need to quickly identify and resolve problems before they kill your company. High-level cross-functional flow charts that reveal problem areas and coordinate employee efforts are especially useful here.
Your Company Has Proven It’s Profitable and You Want Greater Sales
By the time small businesses experience this situation, management and employees have developed sound business systems. Everyone knows how to do their job and works together well enough to consistently get the work done. The problem is the policies and procedures are locked inside everyone’s memory.
Similar to the situations above, this makes training new people (the ones you’ll hire to support additional sales or will replace departing employees) difficult and effective only for the people who were lucky enough to be trained by skilled teachers. The difference with this situation compared to the one above, is you have time to create written policies and procedures before the chaos and frequent need to put out fires appear.
A Key Employee Announces He or She Is Leaving
For most small businesses, when a key employee leaves a wealth of knowledge leaves as well. The employee(s) who fill the open position usually lack the departing employee’s knowledge of how to do the work, so they create new, different processes to get the work done. Those processes, like torn jigsaw pieces, initially don’t fit well into the surrounding business systems and all the systems have to adapt to lock together again before work is reliably done well.
Hopefully there’s enough time to have the employee’s replacement(s) write down the departing employee’s processes during training. Have the departing employee review and correct the inevitable misunderstandings that occur during verbal training. If the key employee is leaving quickly, review what the employee does and prioritize the knowledge to be transferred.
One or More Positions Have a High Turn-Over Rate
This situation often occurs when employees are disengaged and comes from a variety of causes.
Employees often disengage when they’re confused about what they’re supposed to do and how they’re supposed to do their work. If they’re afraid to show their ignorance to their supervisors to get the training and support they need, such workers often quit to avoid the uncomfortable situation.
Another cause is disagreement between individuals or groups about what work should be done and when it should be done. The disagreements create silos and frustration when teams are pulling in different directions.
This is a great opportunity to create written policies and procedures to solve a high-cost problem. When the new hire is being trained, have the new hire write down the processes and review the processes with the new hire and trainer. You’ll likely find the trainer needs some additional training as well.
You’re Thinking About Selling Your Company
For some prospective buyers, seeing there are written business systems in place significantly increases your company’s worth to them. Other prospects often require the business owner and existing managers remain available for consulting/training purposes while the prospects absorb what information they can about how to run the business they’re considering buying. Creating a good set of written policies and procedures in the form of an operations manual largely frees you of the requirement to consult when you’re ready to move on.
Getting your existing business systems written down is especially helpful if you are positioning your company as one that can be used as a model for franchising. Doing so can substantially raise your company’s perceived value.
How to Systematize Your Company
Getting your company’s systems written down, reviewed, and approved is not a small task. Depending on company resources and complexity, it can take several months to more than a year to complete. Employees and managers often resist the effort for a variety of reasons, and the effort will certainly fail unless you as the business owner enroll them in the effort.
Planning for and regularly updating the written documentation is critical for the long-term success of the systematizing effort. All too often the investment of time and resources to create an operations manual is wasted when the manual becomes dusty and out-of-date as the company’s systems improve and adapt to new requirements.
Getting well-written company policies and procedures often requires skills and time not commonly available from employees who must continue to produce their regular work output. In such cases hiring a professional writer or editor at least, is a wise investment.
As Writing Jim, Jim Driggers provides copywriting and business process writing to owners of small and medium-sized businesses. His clients gain sales through marketing text that better resonates with their customers, and they save money when their employees follow guides rather than impulses. His clients give themselves the time to focus on what they do well when they leave their writing to Writing Jim.
For copywriting help with your print or online content or for help systematizing your business processes, contact Writing Jim at [email protected] or 925-231-5825. Visit www.writingjim.com for more information.If you care, share.