Seven Secrets for creating Standard Operating Procedures (SOPs)

Seven Secrets for creating Standard Operating Procedures (SOPs)

When John Warrilow, world-renown author and founder of The Value Builder System*, comments on something it’s worth taking notice.

In a recent presentation, John described Standard Operating Procedures as the foundation of a business that is built to sell. Amongst other things, they provide the following for a business-:

  1. The secret to happy customers – by helping to provide your customers with a consistent experience
  2. Minimise the owner’s time spent problem solving – SOPs allow owners to pre-empt most questions employees ask resulting in less staff interruptions therby freeing up much needed business owner time to tackle other challenges.
  3. Help to train confident employees – SOPs give employees clear instructions on what main tasks make up their jobs.
  4. Increase the value of the company – by giving an acquirer more confidence that the business will continue to survive without the owner.

So if documenting your Standard Operating Procedures really does;

  • increase the value of your business,
  • improve profitability from greater efficiencies and productivity and
  • give the owner much needed time to focus on other things,

then why do some owners not invest the time required to put these SOPs in place? From my experience, it comes down to two things, time and money, and fundamentally, knowing where and how to start.

Anecdotally there is enough evidence to support an argument that the documentation of key processes and procedures will increase productivity and efficiencies which in turn will flow through to improved profitability. It’s also clear that any time spent documenting key processes and procedures now will be rewarded threefold in the future. That takes care of the time and money obstacles.

As to how and where to start here are the Seven Secrets for creating Standard Operating Procedures that John Warrilow advises will stand the test of time in your business.

  1. Use Video – If a picture says a 1000 words then a video is worth a million. By creating processes and training material in video format staff will enjoy the learning process and be more likely to retain the information. Such content can be supported by written documentation
  2. Keep your SOPs short – show your employees how you want them to perform a specific task. If you need more than two minutes break your instructions up into shorter video clips.
  3. One touch – the best SOPs are structured so that an individual only touches the process once.
  4. No double data entry – if a SOP requires entering data make sure that a single piece of data or field is only populated once and by a single person.
  5. Clear roles and responsibilities – when designing SOPs make sure it is clear who is responsible for each step.
  6. Make SOPs available where employees need them the most – ideally your SOPs should be cloud based and appear where your employees do their work so they can access them just in time without having to sift through a massive Google drive or Dropbox folder.
  7. Solicit help from Process experts: – just like Finance, Health and Safety and HR, SOPs are now an expertise in their own right. Experts from companies like New Zealand’s Bedrock provide guidance around templates, structures and frameworks which help make such an exercise less daunting

Increasingly I am hearing the message from business owners that they’re working too hard for fewer rewards. The more I research documenting SOPs the more I am convinced that if business owners invested the time they currently spend answering queries from their staff into documenting these processes, the quicker they would regain that lost time to use on more meaningful things in life
The benefits of putting some extra effort over the next few months into starting this process will quickly become apparent, while the longer-term benefits will continue to accrue as these SOPs are developed and introduced.

*The Value Builder System is a cloud-based assessment tool that helps build the value of a company. It has helped more than 55,000 business owners improve their company’s value by up to 71 percent.

What’s your Stress Quotient® – and how can you keep it under control?

What’s your Stress Quotient® – and how can you keep it under control?

Our Winter Pulse Check results showed that while many business owners remain confident their businesses are doing well, there has been a marked rise in those reporting anxiety, stress, and disturbed sleep as operating conditions worsen.

And it’s not just business owners feeling stressed.  The impact of Covid on workplace stress levels has been significant over the past 12 months and media coverage has highlighted the potential financial liability business owners may have if they choose to ignore the signs among employees.

The first step to reducing workplace stress is being able to identify and acknowledge it exists. There are several tools available to do this and it is an area we’ve been exploring for some time, in association with TTI Success Insights and an online tool – called Stress Quotient®  – which helps Kiwi business owners identify, measure and monitor various stress types within organisations and teams. Defining stress as ‘the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources, or needs of the worker’, Stress Quotient®  identifies seven key workplace stressors that both employers and employees need to watch for.

  1. DEMAND: While today’s employees may want challenging tasks to maintain their engagement and motivation, it is important that demands do not exceed the ability to cope. Workplace stress tends to build as demands and responsibilities increase. Stress can be directly tied to poorly designed jobs, excessive workloads and talents and skills not matching the work. The goal is to have a balance between demands and time.
  2. EFFORT/REWARD BALANCE:  Having purpose or job satisfaction is an important factor in any job. High effort without satisfying one’s need for rewards can lead to workplace stress. Rewards come in many forms; recognition, helping others, gaining knowledge, personal growth, structure or compensation. High effort in the workplace is essential but must be matched by the reward that the individual desires. Workplace stress arises when there is a significant disconnect between needs and rewards.
  3. CONTROL: A feeling of powerlessness is a universal cause of job stress. You alter or avoid the situation because you feel nothing can be done. Common sources of stress at work include complaints of too much responsibility with too little authority, being involved, not being heard and no one understanding what you really do. Workplace stress increases as one’s degree of control decreases. The goal is to have a balance between responsibilities and personal control.
  4. ORGANISATIONAL CHANGE: Organisational change affects people differently. While some people welcome it, others become apprehensive and stressed at the mere mention of change. Organisational change can be defined as any change in people, structure, technology or procedures and can vary in degree and direction, produce uncertainty and initiate both stress and opportunities.
  5. MANAGER/SUPERVISOR INFLUENCE:  Common reasons given for stress at work include lack of effort from your employees or self-imposed pressure on yourself. Most people don’t realise that stress is a part of every job. That’s why, when you are working under reasonable demands you can get the job done more efficiently. However, when you do things that go beyond normal pressure this can cause stress.
  6. SOCIAL SUPPORT: A lack of support from colleagues and leadership can lead to workplace stress. A supportive environment is one where leadership provides clear and consistent information and co-workers stand ready to assist when needed. An environment that promotes positive working relationships and addresses unacceptable behaviour promotes productivity and employee engagement.
  7. JOB SECURITY: People worry about many aspects of their jobs, but most of the fear comes from job security. Job insecurity comes from the fear of job loss and the associated unemployment implications. Stress can also originate from a lack of advancement or being promoted too slowly. People also can have a concern with being promoted too quickly to be successful in the job.

By measuring each of these seven key workplace stressors, we can focus on the things that are within one’s control without having to make huge changes or rethinking career ambitions.

There’s a well-known saying: What gets measured gets managed so it may be time for NZ businesses to start measuring organisational and individual stress levels. Not doing so may overlook important health and safety issues in the workplace.

If you think Stress Quotient® could be a valuable tool to identify, measure and monitor stress levels in your organisation please get in touch with me or one of The Alternative Board team.

Confidence and motivation fraying for some SMEs, survey shows

Confidence and motivation fraying for some SMEs, survey shows

Article by Marta Steeman – Senior Reporter – Stuff Limited

The stresses and strains of handling Covid-19 disruption is taking its toll on the confidence and motivation of a good chunk of small businesses, a new survey shows.

The Alternative Board’s Pulse Check Autumn 2021 shows business confidence is still high among 46 per cent of the 271 member and associates who responded to the survey but a substantial chunk, 39 per cent, are “just ok” and have no room for more lockdowns.

The Alternative Board is a business development, coaching and mentoring organisation for small to medium-sized businesses and has about 300 members here. There are about 15 franchise operators around the country.

The Alternative Board North Canterbury managing director Steve Wilkinson​ said the Covid aftershocks of shipping delays, higher prices and difficulty finding suitable staff seemed to be fraying the high levels of confidence reported in the summer.

Continue reading on Stuff

Article first published in Stuff 14 May 2021.

Credit issues are on the rise

Credit issues are on the rise

Our recent Business Pulse Check showed 7% of respondents have experienced more late payers and defaults, while 4% are struggling to pay creditors. In recent client coaching sessions, I am also noticing that there is an emergence of fiddly credit issues that are starting to take up a little more time for both business owners and their credit staff.  These issues range from company liquidations, more creative excuses for not paying, down to just not paying on time, or paying later than normal. In some cases, the debtor has grown their exposure with the company over recent months without any further analysis of the increasing credit risk.

In a paper I wrote earlier this year on the Changing Face of Credit Risk I emphasised the need to continue to be vigilant with your credit control processes and procedures.

With the Christmas break coming up it is critical that everyone makes sure they have robust processes in place for collecting outstanding debts – including pro-actively following up overdue amounts expediently. Anything left outstanding on Christmas Day is unlikely to be paid until late January, with the resultant impact on your company cashflow at a time when it is most needed.

In the meantime I would suggest you remain focused on the following:

  • Watch for changing signs with any clients i.e. increased exposure/delays or excuses in paying.
  • Where appropriate be pro-active in updating Terms of Trade, particularly in cases where you may not have personal guarantees and exposure is increasing.
  • Use credit checking more regularly for clients who are showing different patterns in their payments.
  • If appropriate, consider registering under the PPSR register.
  • For clients showing changes in trading/payment patterns consider putting in place credit watch processes.
How the Important but Not Urgent can catch you out.

How the Important but Not Urgent can catch you out.

As business owners we all undertake activities every day that loosely sit under one of four categories-:

  1. Important and Urgent
  2. Important and Not Urgent
  3. Not Important but Urgent
  4. Not important and Not Urgent

At one of our recent meetings of The Alternative Board in Christchurch, we undertook an exercise to establish how our business owners planned their activities during a normal day. The results were not only relatively consistent but also quite alarming!

Everyone was able to put a particular activity they had undertaken in the previous day into one of the above categories and the following themes emanated from the ensuing conversations.

  • For obvious reasons everyone placed priority on the Important and Urgent activities above everything else
  • A significant part of some people’s day was taken up with activities relating to the Not Important but Urgent category. Further discussion reveals that a lot of this activity came from staff and other enquiries. In some cases, this reflected a lack of training or specific operating processes and procedures within the organisation. This then necessitated the business owner getting involved in urgent issues that could have been handled elsewhere had better training or processes and procedures been put in place.
  • A surprising amount of time was spent on the Not Important and Not Urgent category. This including following social media, looking at emails of little relevance to the business owner and reading the media.
  • The biggest concern that came out of this assessment was the lack of time and effort put into the Important but Not Urgent activities. This category included such activities as-:
  • Proactive communication with key clients with a view to building key strategic alliances
  • Development of Databases/CRM systems to allow proactive communication with clients and prospects
  • Further development of websites, particularly around providing online sales capability
  • Strategic Marketing
  • Development of written processes and procedures
  • Staff development

“Why is this the case?” was the question asked. And “What was required?” to ensure that more emphasis was placed on this important category of daily activities in every business owner’s life.

The general answer to these questions was that in some cases the activity needed to move into the Important and Urgent category to prompt more proactive activity.  A common comment was “No one will die if I do not do this activity.”

But guess what? Covid-19 came along and what was previously deemed Important but Not Urgent suddenly became Important and Urgent. This new sense of urgency was created through;

  • Business owners unable to communicate with clients about their status under Covid levels because they had not put the time into developing their Database/CRM system. This had a direct impact on revenue streams.
  • Business owners unable to automatically ramp up online sales due to a lack of investment of time in putting the  process in place.

So, what’s the message here?

If you leave something that you have deemed as important for too long, at some stage it will go from being not urgent to urgent. This will not only cause unnecessary stress but may lead to wrong decision making because of the urgency now created.

It’s critical that business owners have-:

  • clearly identified what the activities in this IMPORTANT and NOT URGENT category are
  • ensure that they understand the risks should that activity become IMPORTANT and URGENT at short notice
  • understand what those risks mean to the underlying stability of the business and
  • make sure there is enough time going into this activity to reflect the ongoing risk.

These Important but Not Urgent activities form part of the monthly reporting from members of our Peer Group Advisory Boards. Fellow members continue to remind each other of the importance of ongoing regular work being done on these particular objectives to avoid some of the practical pitfalls that Covid has shown us can occur, as a result of failing to do so.

Author: <span>Steve Wilkinson</span>