An article appeared in today’s online Wall Street Journal (“It’s Snowing. Do We Get The Day Off?“, 4 Feb 2010) that pointed out how vulnerable small businesses are to natural forces than are their much larger business “brethren”, such as Wal-Mart, Royal Dutch Shell, and Toyota:

• This week’s snow-and-ice storm that swept through the midwestern and eastern U.S.;
• The floods that have absolutely devastated Australia’s Queensland state; or
• The earthquake that hit Haiti over a year ago and two major quakes in the last decade affecting parts of Indonesia.

Of course, the large-scale destruction that accompanies some flooding and quakes will be the death knell for your business when your geographic expanse is limited to one office, which is in the flood/quake zone. In those cases, company policy had better include careful risk assessment and ongoing risk management, including major disaster and contingency planning.

Fortunately, most business disruptions are not nearly so large in scope. Like the ice storm that hit us (St. Louis, MO, and parts north, east, and west of us) just about a week ago, a day of down time — or even two or three — might not be critical. We might be able to continue working in the cloud, so our core functions continue whether we’re “there” or not. We can telecommute when the need arises. Having a bad weather policy seems like a non-issue for us.

“Well, that’s just fine for some B2B”, you might be saying to yourself, “but that’s not us.” If our business depends in part on foot traffic — people showing up at our office/storefront to do business — we can’t have workers not show up and expect that to have zero impact on our cash flow, or our company’s reputation. Our customers have come to rely on us to be there for them, regardless of what it’s like outside. If there’s a lot of competition in our area of business, one little “glitch” could send our customers elsewhere.

At the same time, we can’t risk the health or well being of our employees. What do we do?

We establish a “rain day” (or a snow day or ice day) policy, we put it in writing, and we make sure all employees — as well as our customers — know what that policy is. We establish clear, easy to follow procedures to ensure that the policy is carried out and we train all our employees periodically and when the likelihood of the threat is on the increase.

Does your company have an inclement-weather policy? Do you think it needs one?

Policies and procedures provide the framework and direction for addressing many common business problems your organization might face.  Let’s look at the top ten business problems solved by Policies and Procedures.

1. Accounts Receivable procedures to reduce accounts receivable (A/R) aging and ensure even cash flow.  Every company needs Strategies for Writing Accounts Receivable Procedures.  Your accounts receivable process is the heart of your cash cycle.  Salespeople can find plenty of customers but without cash-paying customers, you can’t pay your bills, which is part of your Strategies for Writing Accounts Payable Procedures.

2. Sales procedures to standardize sales pipeline management and ensure a consistent sales pipeline.  Sales procedures allow you to take control of the sales and marketing cycle.  Developing measurements, sales assignments, and target markets are all important elements of your sales process.

3. Disaster Recovery procedures will assist in an orderly and timely response to emergencies your company may face, as well as control the inevitable chaos that occurs.  Every company needs to effectively respond to disasters or emergencies in a timely manner; if not, they could be out of business.  In recent months, we’ve had ample opportunity to learn the lessons of the Gulf oil disaster, such as “having a disaster recovery plan before the need arises”.

4. Human Resources procedures ensure non-discriminatory practices; specifically, well-defined employee hiring and termination practices will help you avoid costly litigation.  Human resources procedures address diverse topics such as recruiting, hiring, training, retention, termination, and — most importantly –complying with local, state, Federal, and even international employment laws.

5. Quality procedures (nonconformance, corrective action, and auditing) improve product and process quality.  The ISO 9001 quality standard addresses quality control, quality assurance, and quality management practices.  Learning how to meet quality standards with ISO 9001 will help your organization reduce costly rework and overtime, thereby improving quality, satisfying customers, and contributing to your competitive advantages.

6. Customer communications procedures, like collecting data from customer feedback and complaint handling for process improvement.  ”Poor customer communication” is the root cause of much customer dissatisfaction.  If you know what your target customer wants, your business has all the information it needs to satisfy the customer. Implementing communication procedures will help you act on your customers’ wants, improving sales.

7. Shipping and receiving procedures are needed to track materials purchased and sold.  Most of shipping and receiving revolves around inventory or assets, which requires processes for handling, inventory management, asset acquisition, and asset disposition.  Specific supplier requirements — and the policies and procedures that flow from them — ensure that you receive what you want, when you want it, in the quantity you want, and with quality built in.

8. Management procedures can improve poor meetings, poor internal communications, and poor reporting.  Management is really about communication — that’s why improving internal communication benefits the whole company.  One of the best ways to improve communications is to develop, document, implement, and monitor a procedure for communications.

Also, it’s important that management shows its commitment to the highest standards, whether those standards have to do with internal processes or processes that directly involve your customers.

9. You also need compliance procedures to ensure your company conforms to the requirements of various regulations, statutes, and standards.  This is where policies and procedures can help your organization.  Compliance is one of the primary problems solved with policies and procedures.

10. Accounting procedures ensure that you fulfill your fiduciary responsibility to your shareholders.  Accounting is a process to track transactions of items, cash, and information.  Accounting procedures help to ensure consistency, reliability, and accuracy of those transactions, which (in turn) helps to build trust in your financial statements.  What Are the Top Ten Accounting Policies and Procedures?

Prewritten policies and procedures from Bizmanualz help solve many of these common business problems.  The Top Ten Core Business Policies and Procedures you will need can be found in the Bizmanualz CEO Company Policies Procedures Manuals bundle.

Top 10 Business Problems Solved by Policies and Procedures

1. Accounts Receivable procedures, to reduce A/R aging and ensure even cash flow.
2. Sales procedures, to standardize sales pipeline management to ensure consistent sales.
3. Disaster Recovery procedures, to control the response to chaos in an emergency.
4. Human Resources procedures, to ensure non-discriminatory employee hiring and termination.
5. Quality procedures, to improve quality.
6. Customer communications procedures, to collect data from feedback and complaint handling for process improvement.
7. Shipping and receiving procedures, to track materials purchased and sold.
8. Management procedures to improve poor meetings, communications, and reporting.
9. Compliance procedures to conform to regulations, standards, and laws.
10. Accounting procedures, to fulfill your fiduciary responsibility to your shareholders.

What do you think? How quickly could your most urgent problems be solved by implementing effective policies and procedures?

Business continuity management — more commonly known as “disaster recovery”, even in the present day — used to be about worst-case scenarios.  That is:

“What is the worst thing that could befall my company, and how do I ensure minimal to no disruption of the company’s operations if that happens?”

Aftermath of 1906 San Francisco Quake

“What could happen” has traditionally centered on such events as:

• Natural disasters (fire, flood, storm, earthquake);
• Disasters of the human kind (terrorism, rioting, looting, etc.);
• Major utility outages; and
• IT system problems (malware attacks, hardware failures, etc.).

While the likelihood of such a catastrophic event is believed to be very small, its impact – if it occurred – would probably devastate the business, causing it to fail.

As computers have insinuated themselves into every facet of every type of business, and the importance of alignment of strategy and operations has been realized, the scope of “disaster recovery” has broadened.  More complex recovery systems have been devised to address companies’ needs on a more comprehensive basis.

However, we’re still focused primarily on disaster recovery — assuming that only the worst will happen – rather than using a truly comprehensive, risk-based approach to crisis and continuity management.  Instead of dwelling on the most unlikely of possibilities, we ought to be more concerned with:

• What threats are more likely to take shape than others?
• Which of those threats, if manifested, will have the greatest impact on the company, which will have the next-greatest impact, and so on?
• How will the company act to prevent those problems or minimize their effect?

I’m not suggesting that your company has to completely give up on the doomsday scenario.  However remote the possibility of a cataclysmic event, you want to be prepared.

I am saying that your business continuity management plan ought to cover the risks inherent in conducting day-to-day business as well as the remote possibilities…things like the current brittle economic environment, or risks to our business structure and processes (e.g., cloud computing, embezzlement, misuse of company information, swine flu).

What do you think?  Could your crisis and continuity management plan take a more comprehensive, risk-based approach? Are you satisfied with your current plan?  Do you even have a plan?

Or, are you counting on the world to end in 2012?  (In which case, I suppose, the whole crisis and continuity exercise is moot.)

You have decided you need policies and procedures, but which business policies and procedures do you need?  Assess the business impact of each of your core business processes to generating revenue or introducing risk and then rank the results.  Core business processes that greatly impact your revenue or risk are where you want to start.

The Bizmanualz CEO Company Policies Procedures Manuals are designed with your core business processes in mind.  The nine business procedures manuals in the series provide your entire company with examples of the primary procedures used in writing your company procedure manuals.  How do the nine procedure manuals address the core business processes?

1. Customer Strategy & Relationships (Marketing) is a good place to start.  Most businesses talk about the customer being the most important part of any business.  Well, if your customer is so critical, have you mapped out a clear customer strategy and customer relationship process?  Do you have customer strategy procedures for developing awareness and education of your business in the marketplace?  The Bizmanualz Sales and Marketing Policies and Procedures Manual provides sample policies and procedures to help you set marketing strategy, marketing tactics, and marketing planning to cover the first part of your marketing sales funnel — awareness and education.

2. Employee Development & Satisfaction is essential to your business because your employees are the ones that talk to and develop your customers.  The Bizmanualz Human Resources Procedures Manual provides example procedures for hiring, administration (e.g., personnel records, compliance), compensation, and — the most important part – developing your employees.

The HR manual also includes a sample Employee Handbook and an HR Manager’s manual to provide a complete discussion of human resources.  Keeping employees and facilities safe is the focus of the Bizmanualz Security Procedures Manual, which includes coverage of guard force management, employee conduct, emergency operations, protection, and safety.

3. Quality, Process Improvement & Change Management is driven by competition, your desire to excel at what you do and make your customers happy.  The Bizmanualz ISO 9001 QMS Procedures Manual provides a sample quality manual, the six quality procedures required by ISO 9001, and additional supporting procedures to provide a foundation for your process improvement and change management initiatives.

4. Financial Analysis, Reporting, & Capital Management is critical to fast growth companies.  Cash is the lifeblood of your company and a fast growth company consumes cash quickly.  The Bizmanualz Financial Procedures Manual has example procedures for financial administration, raising capital, managing capital, financial statement reporting, and the internal controls necessary in a fast growth company.  A controllers manual is included to provide the direction and organization for controlling your company cash.

5. Management Responsibility addresses all of your core business processes and is integral to every area of your company.  Every manual in the “CEO Company Policies Procedures Manuals” covers the management of that departmental area.  Each manual provides a departmental (functional) manager’s manual that describes the departmental organization structure, major responsibilities, departmental guidelines, ethics, policies, and – of course – the primary business processes for that department.  The Bizmanualz Business Procedures Manual provides a simple, fast, and easy way to provide immediate oversight for all of your operations.

6. Customer Acquisition (Sales) is about engaging the customer and closing the sale.  The Bizmanualz Sales and Marketing Procedure Manual contains procedures for the entire sales funnel, sales process, sales administration and sales management common to organizations that have to oversee a sales force.  The Bizmanualz Accounting Procedures Manual contains procedures for controlling cash and the revenue cycle, which is a parallel and supporting activity to the sales process.

7. Product Development must obtain requirements from sales and develop products that satisfy the customer.  Therefore, product development procedures are found in both the Bizmanualz Sales and Marketing Procedure Manual and the Bizmanualz ISO 9001 QMS Procedures Manual, which contains procedures for customer requirements, as well as the design and development of new products.

8. Product/Service Delivery The Bizmanualz Accounting Procedures Manual contains procedures for shipping, receiving, and inventory control.  But since delivery is part of ISO and quality, the Bizmanualz ISO 9001 QMS Procedures Manual also provides coverage of this critical customer facing area.

9. Accounting Management is about accounting transaction management, as opposed to finance which is focused more on raising, managing, and using cash effectively.  The Bizmanualz Accounting Procedures Manual focus is on controlling operating cash receipts, cash disbursements, inventory and assets, the revenue cycle, and general accounting administration.

10. Technology Management is about all of the technology in your company.  The Bizmanualz Computer, Network and IT Procedures Manual contains procedures for IT administration, IT asset management, IT training, technical support, IT security, IT disaster recovery, and software development.  More in-depth continuity planning coverage is provided with the Bizmanualz Disaster Recovery Procedures Manual.

Business Process Policies Procedures

The Bizmanualz CEO Company Policies Procedures Manuals collection is the best overall deal — you save 45% when you buy the set, compared with purchasing all nine manuals individually.  The series covers all of the core business processes in one simple bundle.  It includes manuals for:

• Financial Policies and Procedures
• Accounting Policies and Procedures
• Computer & IT Policies and Procedures
• Human Resources Policies and Procedures
• Sales & Marketing Policies and Procedures
• ISO 9001 Quality Policies and Procedures
• Security & Disaster Policies and Procedures
• Business Policies and Procedures Sampler

Every critical area of your company is now covered with the Bizmanualz CEO Company Policies Procedures Manuals set.  Coverage is now easily at hand for Accounting, Administration, Customer Service, Disaster Management, Engineering, Environmental Management, Finance & Credit, Information Technology, Manufacturing, Personnel, Sales & Marketing, Security Operations, Shipping, Purchasing, Inventory, and ISO 9001 conformance.

Like anything else worth having, a continuity plan isn’t easy.  However, the most elegant, complex plan isn’t necessarily the best one.  Start simple, with a framework like the one below, and build on that.

1) Do you have a plan in place?

• If not … DON’T PANIC!  Action driven by panic can often be worse than no action.
• If so, when was it last tested? How thoroughly?

2) Have you conducted risk assessments?  What is the risk of a swine flu outbreak crippling your business (vs. other events, like a flood, tornado, or gas leak)?

3) Have you identified and prioritized your vital operations?  (Don’t leave out payroll and benefits, whatever you do!)

4) What’s your employee attendance policy?  “Come in unless you’re on your deathbed?”

• Do you have a telecommuting policy?
• How robust are your security policy and practices?
• How are your network and server capabilities (especially those you’ve outsourced)?

5) What is your chain of communication?

• How sure are you that your employees are getting the same information at the same time?  How about your contractors/outsourcers?  Are you keeping them informed?
• Are you able to keep your customers, suppliers, etc., in the loop?

6) Are your suppliers adequately covered? (That is, do they have a continuity plan?) Should you be worried about an interruption of supplies or services? Do you have a fall-back position?

7) Is your staff sufficiently cross-trained that you’ll be able to withstand a loss of 10, 25, or even 50 percent of your staff for weeks at a time?

8 ) What is the line of succession?  Who makes executive decisions if the chief executive is incapacitated for a period of time?

9) When the flu bug has passed, be thankful you weren’t hit much worse.  Then get started on a real continuity plan.

Periodically test every piece of the plan. A desktop or bench test is better than no test at all, but a “live” test of every function, department, and facility in your continuity plan is a must!  If it’s been three or more years since any part of your plan was tested under simulated “real-world” conditions, you need to put your continuity plan to the test now!

This swine flu is sure getting around quickly, isn’t it?  It’s front-page news in every daily paper you see and the lead story on every newscast.  It’s more than a little unsettling watching the numbers rise so quickly—all those pictures and videos of masked people.  Swine flu could push back the hoped-for economic recovery even further if it gets as bad as some people are predicting.

Swine Flu photo by sarihuella on flickr.com

It would be a terrific blow to your business if the swine flu outbreak turned into a pandemic and you lost 10 percent of your workforce—or more—to prolonged illness.  A simple but effective continuity plan—though it wouldn’t keep the problem away from your door—could help you weather this storm in fair shape.

But do you have such a plan?  Sad to say, you’re in the majority if you don’t, which leads to my next question.  Why do most of us wait until illness or other tragedies are on us before we ask ourselves, “What will I do?”  If you’re a small business owner, employing six trained, highly skilled workers, what if just one of them is out for a week or so with the flu?  Counting you, that’s 14 percent of your workforce!  If another one goes on the sick list at the same time, that’s 28% percent. Or what if it’s you, Ms. President?  What do you do?  Is NOW the time to put together a continuity plan?

Even after the swine flu passes, how many companies will say, “That was scary!  We’re putting a plan in place so we’re never caught unprepared?” How many of those companies will actually develop and implement a continuity plan?

Is your company ready?

Next … start mapping out your company’s continuity plan.