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Where does business success come from? Are great quarterbacks born as great football players or did they have to learn how to play football? Great players practice all week for the game on Sunday. But what do they practice? They are already great. They practices plays — football procedures.
In business, employees are expected to perform their job all day long. But how much time is allocated to practicing their job?
Evaluating Business Success
In football, teams have a playbook defining, step-by-step, every player’s job on every play. The team practices every play until it is executed correctly. Now they are ready for the game on Sunday.
Does your company have a playbook or business manual? With step-by-step procedures, job descriptions, reports and forms for every job? Does every employee know exactly what is expected from them for the company to succeed and keep its customers happy?
Is Your Playbook is a Valuable Asset Leading You to Success?
All large organizations have a playbook or business manual. Is that how they got large? They standardize business processes to eliminate inefficiencies. They find the plays that work and use them over and over to succeed.
Let’s take sales – do your salespeople have a quota to fill? Do they have call sheets to complete, month-end status reports, 30-60-90 day forecasts? What about the rest of your company? Every employee needs the same process detail to be successful. Yet having clearly defined policies and procedures is often an afterthought to starting a business.
Policies and Procedures are Your Business Success
But, policies and procedures are your business. Return policies, credit procedures, sales and service policies, policies on vacation, healthcare, and sick leave. Policies, documented or not, communicate your strategy, vision, and understanding of the market to your employees and customers. It’s not what you say. It’s what you do that is the essence of your company.
How many points could your team score if there was no playbook and positions were not clearly defined? How would you communicate in the huddle what you wanted to get done? Chaos would develop and the team that was better organized would win.
What are the Costs of NOT Having Policies and Procedures?
- Opportunity costs – Lost sales or goodwill from the uneven treatment of customers. McDonalds requires that all food served at its thousands of franchises taste and is served exactly the same. Would you continue to eat at McDonalds if it wasn’t?
- Inefficiency costs – Time spent correcting tasks improperly performed or documented. “If you don’t have time to do it right the first time, when will you have time to fix it.”?
- Legal Liability – How much does the company pay its lawyers to defend itself when policies and procedures are unclear, someone gets damaged, and people sue? In the movie “Erin Brockovich” Management gambled with safety procedures and lost. The losing company had to pay hundreds of millions of dollars for damages, plus legal fees and they still had to fix the problem.
Companies operating without clearly articulated policies and procedures are gambling – they don’t know if they’ll succeed. Successful companies don’t take chances with success. They practice, honing their skills, focused on winning through a process of well thought out policies and procedures. Not only do policies and procedures solve business problems, but they can be the deciding factor between your business success and failure.