How about Management by Walking Around?  Management is a contact sport not an objective setting exercise.  You have to get out into the field in order to see or “Check” what’s going on in your company (check is part of the Plan Do Check Act cycle of learning).  Lean thinking managers naturally walk around to get ideas for new kaizen improvement events, to see the work being performed, and to understand if the right work is being performed.  We call these Gemba Walks (Gemba is Japanese for the place where work happens).  In a Gemba Walk you want to observe your processes in action and look for signs of lean waste that need to be removed.

Management by Procedures is how McDonalds or other successful franchises manage their business.  You start by defining your process using a process map to build visual communication and understanding.  Next, write down what needs to get done, by whom, and when.  Then deploy and practice the procedure.  Perfect the procedure until you have a consistent process just like a franchise would need to roll this out to hundreds of others.

Managing by procedures is not a paper exercise.  It requires basic goal setting from the Management by Objectives crowd and also process checking from the Management by Walking Around group.  What’s different is that you will have process documentation that includes a process map, policies, procedures, and objectives that are clearly posted.  Systems are put in place to ensure your employees do not make mistakes.  And as a manager, you are actively involved in making sure your systems are working.

A franchise is built with consistent procedures.  Franchise owners are trained in the process and systems are put in place, by the franchise organization, to ensure that the franchise delivers the same consistent quality that the brand has built.

You too can start practicing how to Manage by Procedures by ordering the Office Procedures Bundle that is now on sale for 50% off during the month of December.  You will save $300 and receive 110 procedures, 124 supporting forms, and other supporting Word files that explain how to write procedures and use the manual.  You will receive this extensive set of policies, procedures and forms.

Easily editable policies and procedures for multiple departments:

• Accounting
• Administration
• Customer Service
• Disaster Recovery
• Engineering
• Environmental
• Finance & Credit
• Information Systems
• Manufacturing
• Personnel
• Sales and Marketing
• Security and Operations
• Shipping and Purchasing

Download a sample procedure template right now and see for yourself how this amazing bundle can help your business build greater consistency for success.

Now, what do you think of when you hear the term “lean“? Are you thinking “no fat”, as in Jack Sprat?  Do the words “efficient”, “effective”, or “no waste” come to mind?

If we put the two terms together, we get Lean ISO 9001, which means a quality management system (QMS) with no fat…an ISO 9001 system that is efficient, effective, and reduces waste within your organization. Who wouldn’t want that?

So, tell me…why do so many organizations implement huge ISO 9001 quality management systems, with hundreds of pages of policies, procedures, and forms, seemingly limitless bureaucracies, and ?

Few organizations are satisfied with the ISO 9001 systems they’ve built for themselves, yet they typically don’t want to change them. Why? Why stick with a system that causes more pain than it removes? Why not throw the old system out if it’s that bad, and replace it with a lean ISO quality system? Think of this: a lean quality management system — one that’s a mere dozen pages or so of easy-to-follow procedures, rules, and requirements, a minimum number of uncluttered forms, and no bureaucracy, which means you spend much less time maintaining your ISO 9001 QMS in top shape.

Easily Create a Lean ISO Quality System

It might be easier than you think to create a lean ISO quality system: mix one part ISO with two parts lean and you get a great quality system. Really, ISO is pretty straightforward once you introduce lean thinking into your organization.  Add lean kaizen improvement events for your corrective and preventive actions, lean standard work to create lean procedures, lean value stream mapping to define your processes, a lean dashboard to track your quality objectives, and a lean quality policy focused on your customer.

Starting with lean makes a ISO 9001 quality system implementation simple — certainly, much easier than trying to introduce a Six Sigma (DMAIC) process into your organization. Once you get lean, you’ll get ISO 9001 as well. Both are aimed at producing the same result — more satisfied customers.

To sum it up, don’t get started on the wrong foot by trying to design and implement a quality management system without Lean. Think of “a QMS without Lean” as something like “building an airplane from scratch”. It could be done, buy why would you?  Start with lean thinking and make getting your ISO 9001 registration a piece of cake.  Lean ISO quality is the way to go.

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Need help “leaning out” your ISO 9001 Quality Management System?  Contact Bizmanualz to learn how you, too, can have a Lean ISO Quality system of your very own.

The aftermath was much more painful than I thought it’d be. According to the oral surgeon, the tooth had taken root really well. Wisdom teeth I had out years before didn’t have the chance to firmly root themselves like this one. Because this tooth had been around a whole lot longer, the surgeon didn’t expect I’d heal quickly. “It should take about six weeks”, he said.

Six weeks? There goes my exercise regimen, I thought. Now, I’m not one of those who runs a marathon every other week. I do feel guilty, though, if I slack off for just a week. You take off for just a little while and it’s that much harder to get back on track.

Taking Preventive Action

The need for preventive action isn’t always that obvious in business. But whether it’s motivated by guilt or something else (standards or regulations), preventive maintenance makes good sense.

You get into good habits early, keep them up, and they pay off for you in the long run. Monitor and measure to (a) make sure you know what optimum process performance is and (b) improve.

(Also, don’t rush things along. I tried returning to action not quite two weeks after the surgery. Very big mistake! 15 minutes in, the pain was incredible. Another week later, I began easing back into my routine, with much better results.)

Learning and Adapting

So, what does an extracted wisdom tooth and an exercise routine have to do with your business? Well, if you noticed, there were a couple of preventive actions going on:

• Removing the wisdom tooth (to prevent an impaction or infection); and
• Exercising (to forestall the effects of aging).

As well, there was a corrective action (exercise being ”neglected”, then resumed) in the mix. In our everyday business, we continually encounter situations that call for corrective action. We all know about “putting out fires”, don’t we?

We know that corrective actions are a significant improvement over fighting fires. There’s an enormous difference between “fixing something that’s broken” and “taking action to ensure that what caused the breakage doesn’t happen again”.

Preventive action is another step — a leap, in some cases — above that. Preventive action makes good situations even better. Preventive actions aren’t the strong suit of most businesses, however.

Preparing for The Future

Why is that? In my estimation, it’s because preventive actions are forward looking and many companies struggle mightily with the here-and-now. The future is…well, something that always gets put off for the future.

We have to look at our organizations more like they’re living, breathing, sentient beings, in a perpetual state of evolution. Sure, you could put off having that “wisdom tooth” in your business removed but at what future cost? What makes sense for the short and the long term? Examine the situation in its totality. Understand and weigh present and future risks, then proceed.

What about your business? Do you have “wisdom teeth” — things or situations that don’t seem to pose a problem now, but could under the right conditions? Might there be a better way?

Your processes aren’t “one and done”, are they? Of course not. Those are events, not processes. We need to document events, but not for the sake of repeatability.

Processes are events or tasks we want to repeat an unknown number of times; we’d like some processes repeated indefinitely. If we want our business processes to be consistent — to yield predictable, consistently good results — we need to document them.

We document processes (i.e., write procedures) to ensure consistency and quality of the results. We also document processes so we can train (and retrain) employees. No matter who is performing or supervising the process, no matter when or where they’re taking part, we want quality and consistency.

To develop what we call a “well-defined process”, we use a couple of simple, effective process modeling tools: the SIPOC Diagram (or process map) and the Process Model.

The SIPOC Diagram

This tool gets its name from its five components:

• Supplier;
• Input;
• Process;
• Output; and
• Customer.

Figure 1 - SIPOC Diagram

This tool needs little explanation: because it’s visually oriented, the SIPOC diagram is very effective at breaking down language and other barriers. It helps people understand the purpose for the process and, when linked with similar diagrams of other processes, explains its relationship to other business activities.

The Process Model

Like we said, a one-time event is not a process, just like a one-time repair is not a corrective action. A true process is a cycle — the Deming Cycle, or PDCA, to be exact.

Figure 2 - the Process Model

This ISO process model does an excellent job of illustrating a typical process:

• You PLAN the process, establish process objectives (what the result should be), state the various requirements (customer, regulatory, standards-based, internal, etc.), and describe how you will get from point A to point B and back again;
• You DO, performing the process and collecting process data;
• You CHECK on the process, reviewing the data you’ve collected and analyzing process performance (not just according to stated objectives, but also for variability, consistency, and trends); and
• You ACT on your review findings, either continuing with the process unchanged or modifying the process to make it work better and implementing the process with those revisions.

The PDCA Cycle is the ideal framework for developing business procedures. That’s why at Bizmanualz, we use the process model as the basis for our procedure templates. The process model works for any procedure, whether it’s in Accounting, Human Resources, Sales/Marketing, or any of your other departments.

You’ll find that when you use these simple and effective tools to guide your procedure development, your processes will be well-defined processes and you’ll reach more of your objectives.

Thanks once again for your time and your comments.

* * * * * * *

What about you? Have you used these tools recently? Did you find that they were extremely helpful, or not at all? What tools do you use to develop your procedures?

Have you used Bizmanualz policy and procedure templates? What did you think of them?

It is interesting to note that, in many cases, the internal control system at many companies consists of volumes of instruction-like procedures that document activities. If a company is taking the time and effort to develop a procedure-based financial control system, it’s worth the additional effort it takes to:

• Understand major financial processes;
• Establish key finance polices and goals (including performance goals and accurate financial statements);
• Determine which processes introduce the greatest amount of risk and which are material to our financial goals;
• Prioritize development of the internal control system according to materiality, risk, and other important criteria;
• Incorporate best practices; and
• Foster an environment in which continual improvement is the status quo.

Is there a better indicator of an effective system of controls than clear goals and key performance metrics that are consistently measured and regularly improving? And are you taking advantage of the financial control system to improve process results and your financial performance?

Easily Editable Procedure Templates for Internal Control


CFO Accounting Procedures Series

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Accounting Procedures Manual

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Financial Procedures Manual

Improving Processes in the Production Area and the Office

Discussions of process improvement and quality commonly reference the production area, or shop floor. Is it any less important for your other key office processes (for example, accounting and finance) to function effectively and efficiently? If you’re a service provider rather than a manufacturer, are quality and process improvement less material? (Of course not.)

How well does your company manage financial aspects like working capital, debt and investments, and leasing? These are as vital to a company’s success as efficient product design and production, yet few attempt to understand and improve finance processes to the same degree as, say, the product development process.

In fact, a lack of focus on finance is common, especially among privately-owned SMBs. Research shows that a majority of SMBs do not create capital plans, do not actively manage working capital, nor do they conduct analysis of financial statements.

Do you know if you’re making money on the cash you borrow? How about the assets you deploy, like accounts receivable, inventory, or cash? What about asset acquisitions you make? These are hard questions but they’re the kinds of questions you should be asking before you raise debt or equity capital.

What really represents the bigger threat to the success of your business:

• One of your Receivables staff borrowing 5-10 euros from petty cash when they’re short of cash and they want to go out to lunch on Friday? Or…
• Not having well-thought-out and consistent methods for managing high level finances that — if your financial situation suddenly and significantly worsened — could result in millions’ worth of losses?

The answer should be obvious.

A Financial Control System that Focuses on Improvement and Success

We’re not implying that businesses ought to ignore cash drawer controls. What we are suggesting is that focusing on low risk/low payoff components while neglecting key aspects doesn’t indicate a system of controls that appropriately addresses risk or that has its priorities in order.

Focusing on the mundane or trivial will do little to improve your overall financial performance! Internal control systems should be designed for continual improvement in key aspects of your operations, such as:

• Regularly reviewing and improving the overall capital structure;
• Using a capital plan to minimize the cost of capital while strengthening your debt/equity position;
• Managing working capital so excessive inventories and receivables do not sap your financial resources;
• Ensuring proper calculations and scenarios are explored while making debt & investment or leasing decisions; and
• Maximizing returns while minimizing costs for cash and merchant accounts.

A system of well-defined processes is not only about control or compliance: it is also about consistently striving to do a little better. Control systems that are designed only to achieve compliance are doing the bare minimum, which means they represent missed opportunities — opportunities to gain and keep a competitive edge, for instance.

That ought to be enough reason for any size and type of company to think about using the process approach to ensure continual improvement and an effective system of internal controls.

To help you build an effective system of internal controls for success, consider the Bizmanualz Finance Policies, Procedures, and Forms manual. Download a sample and see for yourself what companies like yours have saved in planning and development alone!

The dynamics of employee recruiting and retention are getting more and more complex.  The 21st century has introduced an array of new HR-related issues, such as:

• Family/medical leave;
• Telecommuting;
• Flexible work schedules;
• Global cultural workplaces; and
• A workforce that may not have the skills to meet forecasted hiring requirements for future job openings.

As baby boomers leave the workplace, the number of available workers to fill the projected demand is not expected to keep up.  How does a company’s Human Resources department plan for such a contingency?  Senior management must recognize that circumstances like these could prevent the company from accomplishing its goals.  The answer is to ensure that Human Resource Management is a key ingredient in strategic planning and the future success of the business.

Employee Recruitment and Hiring

The employee hiring process is generally initiated once you’ve identified a need to bring on one or more additional employees to fulfill certain requirements of your business plan. It officially starts when you fill out a new employee requisition, including required experience, skills, and qualifications, and ends with the candidate selection and offer, followed by orientation and reporting to work.

After the employee requisition, your staff prepares an appropriate advertisement to solicit qualified candidates.  The advertisement should make your requirements clear (e.g., all applicants must complete an application form) and should include such information as:

• Job title;
• Job qualifications;
• A description of duties; and
• Salary or pay rate.

The application form cannot ask the applicant to divulge any information that could be used to unfairly discriminate (questions of race, religion, etc.).  All language in the advertisement should be specifically job-related.  A “final date for accepting applications” may be indicated to ensure the company meets its own requirements, as well as to limit the number of applicants, so long as that date is conspicuous.

The advertisement may be posted in state employment offices, as well as in newspapers, radio, television, trade journals, announcements on yours and other websites. Some companies’ recruitment processes include job fairs and/or using a recruiting service. A statement that you are an “Equal Opportunity Employer” is required of job postings in the USA, the EU, and other areas of the world.

Depending on your location(s), you may have to comply with regulations pertaining to recruiting, selection, and hiring of employees.  Examples of laws affecting hiring include the:

• Age Discrimination in Employment Act (USA);
• Americans with Disabilities Act (ADA, USA);
• Various Civil Rights Acts (USA);
• Racial Equality Directive (EU); and
• Employment Framework Directive (EU).

Interviewing Applicants

Once you’ve identified qualified candidates, you should invite them in for an interview.  The interview is an opportunity to:

• Meet the applicant;
• Exchange information;
• Ask additional, or more in-depth, qualifying questions;
• Allow the individual to ask their own qualifying questions (about the company, the job opening, etc.)

The interview is for assessing the applicant — and vice versa — and discussing both parties’ needs in detail.

The interviewer must be careful not to ask questions that are considered confidential, discriminatory, illegal, or not job-related. Certain questions (about citizenship status, age, national origin, children, transportation, height, weight, disabilities, marital status, religion, military service, or housing) are off-limits, according to various privacy and rights laws. A sample (i.e., not an all-inclusive) list of questions one may “ask”/“not ask” an interviewee is included in the Bizmanualz^TM Human Resources Policies, Procedures, and Forms manual. In any case, open-ended questions are the best, in that they allow the applicant to provide answers voluntarily.

An interviewer needs good interpersonal skills and should always keep thorough recorded (written) notes of the interview.  A thorough interview record not only helps the applicant screening process — it can help defend the company if someone who’s not hired decides to take action against the firm on the basis of discrimination.

Title VII of the Civil Rights Act of 1964 and other local and state laws prohibit the interviewer from asking questions that could be used to discriminate against an applicant on the basis of race, gender, or other issues. Make sure applicants know if there are additional applicants to interview and that a hiring decision will be made by an approximate date.

Background Checks

Background checks should be performed on applicants who’ve succeeded at the interview phase of the hiring process. By the end of the interview, the applicant should be asked to read and sign a form authorizing your organization to conduct a background check, including a criminal check and a check of past employers.  This form should include a statement (“waiver”) that both you and the prior employer are released from financial liability from any suit that may arise from obtaining or releasing background data as long as the data provided are accurate.

Remember — if you hire an employee without performing an adequate background check and he/she later endangers other employees or customers, you may be held criminally or civilly liable.  Look for gaps in employment, verify addresses, confirm qualifications and education, talk to past employers, and verify professional references. Once again, keep careful, thorough documentation of all background checks.

A credit check — which has become more popular in recent years, regardless of the type of job offered — cannot be performed unless the applicant has approved it in writing, thereby releasing you from liability.  A credit check should be performed only if an applicant’s financial condition is relevant to the job (e.g., bank teller, loan officer).

If employment is denied due to the results of a credit check, the applicant must be notified in writing of the company decision and must be given the name and address of the credit reporting organization that provided the decisive information. Many states have specific “employment credit check” regulations; check with your state’s labor department or division of employment security for more information.

Federal and state anti-discrimination laws place legal limits on a company’s ability to obtain arrest and/or conviction records.  A criminal background check should only include convictions. Furthermore, only a record of conviction can be the basis for rejection, and then only if business necessity requires it (for example, a bank may reasonably refuse to hire someone convicted of embezzlement for a teller or teller supervisor position).

Again, many state laws are more restrictive than their federal counterparts; this should always be considered when a criminal check is required.  Some states require an employer to conduct criminal record checks of applicants for jobs that involve working with minors (e.g., day care, teaching, coaching) or in health care; always check with your state for guidance on criminal record checks.

Discriminatory Restrictions (Federal & State)

Companies that have fifteen or more employees are subject to federal anti-discrimination practices covering recruiting, application and hiring processes.  States have more laws that are restrictive and generally affect even the smallest companies as to anti-discrimination.  A company cannot discriminate in hiring based on sex, race, color, national origin, citizenship, disability (physical or mental), religious affiliation, military service, pregnancy, personal bankruptcy, refusal to take a polygraph test, or age.

Selection (New Hire Employee)

The successful applicant should be processed into the organization in an orderly manner beginning with a company orientation, a review of the company policies concerning employee’s, a tour of the job site, a safety brief concerning the job, introductions to associated supervisory personnel and co-workers, and processing into the payroll system.

GENERAL EMPLOYMENT ISSUES

The new hire is sometimes asked to sign an “at-will” employment statement, which means there is no contract binding either party to the other (unionized employees being an obvious exception). In other words, the employer or the employee may terminate the work relationship at any time without cause.

You may hire applicants who are not U.S. citizens.  However, once a non-citizen is offered a job he/she must have an “Alien Registration Receipt Card” (USCIS Form I-551, commonly known as a “green card”) or an appropriate “work visa”, which shows that the individual has the right to work within the United States.

Also in the USA…within three (3) days of employment, every new hire must fill out a “Form I-9” and supply identification and proof-of-eligibility documents listed on the I-9. This is required of all firms, in accordance with the Immigration Reform and Control Act (IRCA). Note that I-9 forms must be kept separate from personnel files.

Minors (those under 18 years old) may be hired, except where certain work hazards (e.g., working with explosives, in a sawmill) are a normal part of the environment, where minors are prohibited in accordance with the U.S. Fair Labor Standards Act.

Minors that are 14 or 15 years old may work only during certain hours after school (e.g., not after 10 p.m.), not more than three hours a day, and no more than 18 hours a week; check your state and local labor statutes for specifics.

Employee Relations / Retention

The most important elements in employee relations are:

• Ensuring that employees are paid a fair wage for their efforts, combined with a benefits package that compares favorably with standards for businesses similar to yours;
• Respect is important to employees — they need to know their efforts are appreciated;
• Respect for their management team; and
• Having a sense that they will be individually and collectively treated in a fair, lawful manner.

The company can communicate employee appreciation through performance appraisals, or performance reviews.  Employees want the opportunity to hear how they are doing in comparison to what you expect from them and how they might compare to other workers in similar functions.  Developing individual and group performance standards is an essential ingredient in employee relations and retention.

Performance standards should be clear, concise, consistent, and in writing.  Effective performance appraisals are objective, assesses employee potential, identify opportunities for improvement, allow for compensation review, and can be used to identify training needs.  They can be a powerful motivator for the employee, if used correctly.

The employer needs to decide on how they will administer base pay and incentive or bonus programs, as well as when pay and performance will be reviewed with the employee.  Most compensation packages (in small to mid-size companies) include Salary + Incentives + Benefits.  A reasonable and common relationship is Salary (65%) + Incentive (5-8%) + Benefits (27-30%).

The compensation function falls under wage and salary administration.  This includes establishing pay rates and grades, establishing job classifications for pay, compliance with state & federal minimum wage laws and annual reviews of your company’s position with regard to pay and benefits as compared with national and local businesses similar in nature.  Market salary surveys can be purchased and will provide valuable comparative information on a local, regional, national, and line-of-business basis.

Another key employee relations ingredient is deciding which benefits to provide.  Legally required benefits include:

• Social Security;
• Medicare;
• Unemployment insurance;
• Workers’ Compensation (insurance for work-related injury);
• Federal and/or state leave laws (e.g., FMLA); and
• Continuation of group health insurance coverage after termination (e.g., COBRA).

Insurance programs are normally offered to employees (and are sometimes mandated by law).  Most plans for employee insurance benefits include medical, hospitalization, vision, dental and life insurance.  The company, the employee, or a shared form of contribution by both the employee and company may pay for the insurance program.

Other benefits may be included, though they are not required by law, as additional incentives. (Generally, if such benefits are offered to one employee, they must be made available to all employees, in accordance with anti-discrimination law.) These benefits include:

• Retirement and pension benefit plans (e.g., 401K);
• Employee stock ownership plans (ESOP);
• Defined benefit plans (a monthly pension payment upon retirement); and
• Defined contribution plans (money periodically deposited by the company into an employee’s individual retirement account).

Other benefits include payment for time not worked (e.g., vacation, sick leave, long-term disability (LTD), holidays, bereavement). It is important to note that employers are not required to give any Federal or state holiday as a day off, with or without pay. However, all employers are required to excuse employees for military leave and jury duty (and in some states, time off to vote); review your state laws for exceptions.

Companies with generous benefit plans might also include legal insurance, tuition reimbursement, payment toward credit counseling or psychological counseling, and reimbursement for parking and transportation.

Benefits are very important to the employee.  Your benefits program sends a direct message to your employee community — it tells them how much you value them.  It tells them if you think of them as assets or liabilities.

All of these issues are covered in the Human Resources Policies, Procedures, and Forms manual from Bizmanualz. It provides a great start for any growing company.  It’s well researched, covers the core human resource management issues, provides guidance and sample forms, and even includes a sample Employee Handbook.  Check it out and let me know what you think.

Lack of Management Support

Top management must be absolutely, unequivocally committed to the idea that implementing a quality management system will improve the business. If management isn’t sold on the premise, the rank-and-file isn’t going to buy it. ISO 9001 puts it this way:

Top management shall provide evidence of its commitment to:

• Developing and implementing the quality management system; and
• Continually improving the effectiveness of the QMS.

What do you suppose the developers of ISO 9001 meant by “providing evidence of commitment”? A quick e-mail to a select group of individuals, saying “good old Wutsizzname” has been assigned the task? Or, does it go much further than that?

Insufficient Resources

Management has to ensure the availability of resources needed to develop, implement, and maintain the company’s QMS. By resources, ISO 9001 means people, training, equipment, tools, funds, and time. To ensure that there are adequate resources for your QMS, you need SMART objectives and you need a development, implementation, and maintenance plan.

These aren’t separate plans, either. They’re all part of a larger plan. The development, implementation, and maintenance phases of your QMS each have to be planned with the others in mind. Are you familiar with the saying, “The whole is more than the sum of its parts”? Well, nowhere is it truer than your QMS.

So, set your objectives, make your plans, and provide appropriate and sufficient resources. Monitor the progress of the project and adjust as needed.

Or, take a wild guess as to how much and how long it’ll take to develop your QMS. (You might get lucky.)

Poor Communication

For your QMS to conform to ISO 9001, top management has to communicate to the entire organization how important it is to meet customer and regulatory requirements. You didn’t need ISO 9001 to tell you that, did you?

The quality standard also says that “top management shall ensure that responsibilities and authorities are defined and communicated within the organization.” If Wutsizzname is the lead developer of the QMS, he has to be a developer in more than name only. Top management has to be clear about what his responsibilities are and how far his authority extends and should make it clear Wutsizzname is backed by management.

Poor communication isn’t simply a matter of what you say — it’s mostly what you do (or don’t do).

Lack of Customer Involvement

Customers and their satisfaction are the heart and soul of every successful business. And it’s not just external customers that deserve the company’s attention — there are internal customers for every project and process, as well. The ISO process model doesn’t make a distinction — a customer is a customer.

Customers of the QMS include procedure users. Their satisfaction may be measured by how well a procedure is executed, time after time. The best way to ensure customer satisfaction (i.e., consistently outstanding execution) is to involve the users in developing the procedure.

Who would know better than they whether the procedure accurately depicts the process in question? Why wouldn’t you have the users — the process owners and stakeholders — test and validate the procedure before its implementation?

In other words, if you tell Mr. Wutsizzname, “Don’t bother the people in XYZ department with silly questions – just write the procedure“, is the result of that procedure likely to come anywhere near what you expect?

Recapping the seven ways you can make your QMS project a success:

• Have a positive attitude;
• Carefully craft a comprehensive development plan;
• Manage your expectations;
• Ensure the unqualified support of top management;
• Provide sufficient resources to get the project done right;
• Keep the lines of communication open at all times; and
• Involve users/customers in the development process.

Is there anything that I missed? Anything you’d like to add to the list? If your QMS project — or any other major project of yours – didn’t turn out like it was supposed to, what would your experiences tell you to do differently?

I appreciate all your comments. Thanks for your time, and best of luck.

Checking the procedure is a form of procedure verification.  You run a test before implementing the procedure to verify that the procedure works and meets all the design requirements.  But how do you know if the procedure will work outside of the design space ?  Will it work in the real world, with real users?  At this point, we are beyond procedure verification — we need to validate the procedure to ensure the process and procedure are working.

You are not done with your procedure until it has been validated.  After all, you wrote the procedure to close some gap in compliance, quality, or performance — how do you know your procedure is actually closing the gap?  Procedure validation consists of performing procedure training, process auditing, and completing a process procedure management review that will allow us to confirm that the gap is closed, the process is working, and the procedure works.

Process Procedures Implementaton and Training

Procedure validation starts with process implementation and procedures training.  Procedure training will be your first feedback from the actual users.  Gather the procedure users together and brief everyone on the main procedure tasks, changes, and process objectives.  Use your process maps to visually explain the process.  Highlight individual responsibilities for key performance metrics.  Ask questions and obtain feedback.  Remember: your procedure goal is “a working process”.

If you have a lot of users from multiple work cells or geographic locations, you need to prototype the new procedure — test it in one area before implementing it across the whole business.  Your procedure validation should occur before a widespread implementation.  In a small organization with limited scope, this is often not practical.  In that case, process auditing is critical to ensure that the procedure works.

Process Procedures Audit

Once employees are trained, how do you know if the procedure works or is being used correctly?  To find out, you need to audit the procedure at some point after procedure training. Process auditing is an internal audit of the process and procedure.  At some interval after training, you need to follow-up on your new procedure and see how it’s being used.  Is the procedure followed?  Is the procedure effective?  Is the process working?  Is the procedure working?  Is the procedure integrated into the process?  Simple questions, but they all must be asked.

If the process or procedure is critical to quality, compliance, or performance, you should perform a process procedure audit sooner and more frequently (perhaps 7, 30, and 90 days apart).  You are still in procedure validation and you need feedback to determine if your procedure is working.  Once validation is complete, you may be able to back off the process audit (e.g., cut back from monthly to annually): it all depends on how well the process is working and how critical it is to your firm’s success.

Process Procedures Review and Change Management

Once audited, how will you know if the procedure is performing as expected?  To find out you will need to analyze the audit data and process performance and hold a process procedures management review.  If you started your process procedure journey with a project charter, you have your original quality, compliance, and performance objectives.

Compare your audit data with the project charter to determine if your procedures work, if the process is working as expected, if you’re ready to close out procedure validation, or you need to make changes to improve your process procedures effectiveness.  Change Management can be tricky here.  Process optimization comes later, after you close out the original design, the process is going for a while, and you’re ready to improve once again.  For now, focus on important procedure changes to achieve the original objectives, in order to prevent scope creep.

Conclusion

We started the process procedure journey with a procedure implementation plan.  Your process procedures project continued with a process map, documenting your process procedure design.  If a procedure was required, you had to write a procedure.

The process procedures journey ended with procedure validation, where you ensured the process was working and the written procedure worked.  Once validation is complete, you’re ready to start your next process procedures journey.

Required Policies Procedures

Only company policies and procedures required by standards, regulations or company strategy must be developed.  ISO 9001 requires only six procedures, so why do many companies feel they need to write 40 or more procedures to achieve control?  Occasional users need procedures as a reminder of procedure steps that they do not perform very often.  Frequent or regular users do not need, and often times do not use, the procedure.  So how are those other 34-plus procedures used?  Most procedures are used to train infrequent users.  For training purposes you may only need a process map.  Are you using your procedures to make up for a weak training program?

Your Policies Procedures Template Design

When you do write procedures you will need to standardize on a procedure template design.  Start your policies and procedures template design by thinking through your document and record control procedures.  Your procedure template design should make room for a header block to ensure your procedure communicates your purpose and scope.

Add a Title, Policy, Purpose, Scope, Responsibility, and Definitions section to help people understand your procedure. Clear department responsibilities identify who does what and helps to declare which positions are mentioned in your procedure with a synopsis of what is expected for each position. Key term definitions reduce confusion; industry jargon should be explained in the definitions section of your procedure to help new procedure users.

Writing Policies Procedures

Before you start writing procedures from scratch, look around for examples, or templates, that you can copy.  Pre-written procedures will speed up your development, reduce your research time, and turn writing procedures into editing procedures.  I’ve found it’s a lot easier to edit a procedure than to write one from scratch, depending on the procedure.  Many procedures are really common using business best practices, so why reinvent the wheel?

If you have to write a procedure from scratch, start writing procedures using active voice construction to reduce task confusion. Subject, verb, object provides clear active voice construction for your procedure.  For example, “Accounts Receivable invoices customers” is clearer and contains fewer words than “customers are invoiced by Accounts Receivable.”  The extra “are” and “by” make the sentence longer, put the subject last, and force the reader to stop and reread the action.  Be direct and to the point — use the active voice.

Add references to related documents to improve your procedures’ usability.  Clearly note when your procedure refers to other procedures or forms.  There’s nothing worse than following a procedure and coming to a passage that refers to a company form and…that’s it. You don’t know what the form looks like, where you might find it, or what version of the form you need.  Putting an example of the form, with an explanation, in the procedure will save you and your users time during procedure training and implementation.

List applicable laws or regulations: clearly communicate your company’s need for compliance.  If you’re implementing a records retention procedure, references to IRS or equal employment opportunity (EEO) passages, for example, provide a brief synopsis and help you implement your procedures.

How to Write Policies and Procedures

Policies Procedures Overhead

Large organizations have a large number of procedures.  They have a lot of staff, business operations, and economy of scale to make their procedures work.  Smaller businesses should remember — the more business procedures you write, the more business procedures you have to edit, implement, train, audit, and review.  More procedures may also produce more audit findings in addition to more updates, more documents to control, and more administration overhead.

Many companies fail to plan for this administration and procedure overhead, so it should come as no surprise that their procedures don’t work as well as expected.  Every procedure becomes outdated, eventually.  Also, due to infrequent maintenance and use, some procedures are overlooked when it’s time to update them.  This can result in repeated procedure audit findings or, worse, repeated waste, fraud, and abuse which the procedures were intended to reduce.

The lean thinking solution is (a) to write only procedures that you absolutely have to write to conform to requirements and (b) to improve your training program to build competent and skilled employees instead of writing procedures you don’t have the time or budget to maintain.

Next week, we’ll cover policies and procedures implementation and training.  It’s much easier to comply with standards and train employees when you’re working with written procedures.  If you’re interested in learning more about your procedures, call or e-mail us for a procedure review of your written procedures.  We’re happy to provide feedback on what you’re using and tell you how you can improve your processes.

How can you use the individual steps of your process procedures journey to focus your business on:

• Adapting your core business processes to process change?
• Building repeatable business processes?
• Adhering to process standards or regulations?
• Managing your business processes more effectively?

Each step of your process procedures project results in an important milestone being reached.  Your entire process procedures project will move along better and quicker, with better results, if you achieve each milestone.

Figure 1 depicts the business process procedures journey work flow.  The journey starts with project management.  The extent of a business process change can be large or small — they may or may not require written procedures — but even small process changes require basic project management to avoid having the law of unintended consequences catch up with them.

1. Process Procedures Project Management

To get the buy-in of your employees, start your process procedures project with a project charter that focuses your team on clear project goals and objectives.  For example, if you’re working on an accounts receivable process, be sure receivables clerks consistently follow the process.

Your process procedures project plan should allow time for the six steps in your process procedures journey: allow about 12% for project planning, 13% for process design, 25% for procedure writing, and 50% for process procedure implementation, training, process auditing, and a management review at the end of the project (Figure 2).

Figure 2 – Process Procedures Project Time

Process procedures project management key milestone: completion of your project charter and project plan.

2. Process Mapping and Process Design

Your procedures process map should include the sequence of process steps with clearly defined inputs, documents, and records.  Make a special note of the process flow metrics, responsibilities, and goals.  For example, an accounts receivable process should note the invoices per hour processed, who is responsible for cash, write-off, or discount approvals, and how close the process is to the goal of collecting within thirty days.  This information will help with later procedure writing, process training, and process auditing.

For many business processes, a process map may be the only documentation needed.  Not all processes require procedures, work instructions, or anything more than a process map.  In fact, a form may be all you need.  It is really a matter of scale: the more employees you have involved in a given function — the more complex it is — the more formal process documentation you’ll need.

Process procedures process mapping and design key milestone: complete “current state” process map with process data.

Next week, we’ll cover writing policies and procedures.  Procedure writing is a result of formal, required compliance and training.  It is often much easier to comply with standards - and train employees – when you work with a written procedure.

If you’re interested in learning more about your procedures, e-mail us at info@bizmanualz.com or call us at 314-863-5079 for a procedure review.  We’re happy to provide feedback on what you’re currently using and show you how we can help you improve your processes.