All Systems GO!

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Compliments of COMPROSE, Inc.

We’d all like to be able to wave a magic wand and instantly streamline operations to turn our businesses into lean, mean, efficient machines.  Economic pressures and thin margins are causing business owners and managers to step back and re-examine their businesses: Are we operating in the most cost-effective, streamlined way?  Why are we wasting time, spinning our wheels?

With so many processes, people, and jobs, the idea of  building a lean, efficient organization can be overwhelming. Sometimes its easier to break the big job down into smaller chunks. Think about improving organizational performance by making incremental improvements. 

Try starting with just ONE business process.  Re-engineering even a single Standardized procedure can deliver a quick payback.

Here’s a great example:  One of our Zavanta customers, an IT consultant, took a highly complicated, error-prone data conversion procedure that took several days and people to perform and transformed it into a two-hour push-button procedure that anyone on the team could do.

Considering this data conversion task had to be performed every week, it is easy to see how the time savings would accumulate: week over week, month over month.  The annual savings could be the tens of thousands of dollars!

And then there are all the intangible benefits of standardized procedures. Making routine tasks more efficient frees employees up to work on important things such as innovation.  Less frustration; priceless.   Getting the mundane on auto-pilot clears the mind and improves focus. 

So think about your own organization. If you had to identify just one task that is problematic; people are spinning their wheels, lots of errors, what would it be?

To learn more about how you can build accountability into your organization and streamline operations, see the COMPROSE Operations Mapping approach and Zavanta software. 

We had to laugh out loud at the June 3rd "Dilbert" comic strip. As usual, Scott Adams put his finger on how often strategic management processes that sound so good in the Board room can misfire and become punchlines around the water cooler.

 

Are you actually encouraging your employees and colleagues to act randomly because no one in your organization knows the answer to Wally's question either. Are the terms Core Systems and Key Processes just more examples of baffling management-speak that fail to connect to what people actually DO at work?  

If that's the case—as we see so regularly in all types of organizations—then your company's most sincere efforts at improving organizational performance and standardizing operations may be just plain confusing and counter-productive.

It doesn't matter what words you use to describe your systems. The real key to successfully standardizing operations is making sure everyone in your organization understands what is important and why, who does what, and how to correctly complete their daily tasks. 

That's why the COMPROSE Operations Mapping approach is so different from other approaches. Operations Mapping integrates all levels of operations including detailed tasks. It starts with envisioning the goal and then breaks high-level processes into detailed tasks that roll back up to the top. Business goals are LINKED to the processes, policies, people, and detailed tasks needed to achieve them. Piecemeal approaches only address part of the puzzle.
 
So if you don't want your organization to end up looking like a Dilbert comic strip, take a closer look at a more effective approach.
 

Many have said that by just thinking about how their business “works” and defining the best way of doing things has gone a long way in transforming their organization from a “seat of the pants” culture to one of accountability. 

You have to put it in writing. Capturing and communicating standardized procedures, the right actions, and responsibilities (before the next misstep or security breach happens) is the most effective and fair way to make people accountable and minimize some of the push back you may get as you transform your culture. 

And we’re not talking about throwing a book of gobbledy-gook at people and just saying "See Ya!"   We’re talking about good systems that LINK clearly defined policies and standards to the processes, procedures and work instructions needed to carry them out. 

Good systems are continually refined and perfected with employee input on how to improve them.  Everyone understands how the business works at EVERY level and what their role is. 

As one of our customers tells her staff: If you’ve followed the procedure “you’re off the hook.”

To learn more about how you can build accountability in to your organization and streamline operations, see Operations Mapping.
 

That’s a core principle of Sam Silverstein’s methodology and book: “No More Excuses – The Five Accountabilities for Personal and Organizational Growth.”  “We are accountable to do the right things consistently.” Sam goes on to explain: “The problem is many managers are great at the strategic level but don’t define the right things that need to be done weekly, daily.” 

As we mentioned in our previous post, we run into this all of the time in organizations we work with.  Accountability starts at the top but has to trickle down to all levels.  As Sam points out, the pathway to accountability is giving people responsibility and authority.  So exactly HOW do you do that?

Well, the answer is yet another incentive for taking the time to develop good systems -- writing clear policies and standard operating procedures (SOPs).

Accountability is based on being clear about what you expect and giving employees a road map (defining the right actions) for how to achieve the expected result, repeatedly, consistently.  Its not fair to expect someone to always do the right thing if they don’t know what the right thing is.  Figuring it out on their own is not a strategy. Telling them once may not “stick.”

Micro-managing each and every person that comes and goes isn’t effective and you don’t have time.  The way to build a culture of accountability is through good systems and procedures.  Sam Silverstein talks about this in another YouTube video:  Create Procedures and Systems for Streamlined Growth

To learn more about how you can build accountability into your organization and streamline operations, see the COMPROSE Operations Mapping approach and Zavanta software. 
 

The concept of "accountability" is certainly getting a lot of press right now-- the oil spill crisis in the Gulf of Mexico, the financial crisis, lax border security. Someone has to be “held accountable.”  

What about your organization?  Is yours a “culture of accountability?”  If not, why not? In the next several blog posts we’ll point you to expert advice on the topic as well as share some success strategies we’ve heard about from our customers.

Fostering accountability has to be one of the biggest organization challenges out there. For 20+ years we’ve heard comments like these from managers frustrated with how to get their employees to be accountable. “Why don’t my employees know what to do without me always telling them?" “Why don’t they ‘get it’?”  Well, in many situations it's management that doesn’t “get it”.

When it comes to creating a culture of accountability, the difficulty may start with peoples’ perception of accountability. Something bad happens, someone steps up and says “I take full responsibility, I’m sorry.”  Okay… then what? It's not about placing blame and saying "Sorry." Organizations who truly understand accountability, strive to avoid this scene entirely by intentionally standardizing operations and promoting a culture that could prevent misstep from happening in the first place! 

Sam Silverstein, an internationally renowned business speaker and thought leader on accountability, provides insights that we think really hit home on an organizational as well as personal level. Sam gives an overview during his appearance on Donny Deutsch’s “The Big Idea.” 

Check it out.

To learn a proven approach you can use to build accountability into your organization and streamline operations, see COMPROSE's Operations Mapping.  
 
Watch for more posts on this topic.

If you want an example of how much clear written policies and procedures matter in the real world, just look at the current crisis in the banking sector. Everyone from shareholders, cable talk show hosts, to Congress wants to know what standardized procedures,  management practices and safeguards were in place, and who was responsible for what.

Ultimately, it is the bank's Board of Directors and Management Executives that are accountable for whatever happens in their bank. The board of directors has very specific oversight duties and responsibilities. The directors should always know how the bank is being run and "once a policy is in place, it is the board of directors' responsibility to ensure that both management and staff are following the directives that they have." Board of Director Duties & Responsibilities

Because of the board's role, it is standard practice to have a bank's board read, review, and approve all the bank's written operating policies.  But, the Good Business Systems Squad here at COMPROSE have been hearing from a variety of sources in banking, including customers and regulators,  that "Board Approved" doesn't always mean what it sounds like. In many cases, the policy and procedure material given to the board to review is so convoluted, overly complicated, and downright confusing that board members don't actually read it--and, even when they do, they rarely understand it. Often, the board just rubber stamps the P&P documents which then go on a shelf and never get used. As a result, there isn't much actual oversight and it is virtually impossible to ensure that correct standard operating policies are being followed throughout the bank's operation.

In fact, some managers intentionally bombard their Boards with tons of pages of policy and procedure documents to review because it avoids their own accountability. If asked about an inefficient or questionable policy or process, a manager can simply say, "the Board approved it" and he or she is off the hook.

It may be--in no small part--that because of the high volume and poor quality of written policy and procedures being passed to them, Bank Boards cannot perform the oversight they should and, therefore, the safeguards that were meant to be in place are failing.

An oversimplification?  Of course! Bad P&Ps alone didn't cause the current banking crisis. But it is one problem that can EASILY be corrected and which can help correct many other problems in bank operations as well.

It's no secret that increased regulation and oversight of banking is on the way. Clear, accurate and understandable policies, procedures and operations manuals will be key at every level of the bank's organization--starting with the Board of Directors.

For more related posts, see:

5 Tips for Ensuring a Flexible Policy and Procedure System in Banking

Bank Regulators Caution About Boilerplate Policies and Manuals

Are Your Policies and Procedures Flexible Enough to Handle Exceptions?
 

Streamlining operations, improving organizational performance, and standardized procedures are 3 critical and interlocking components of success in every organization. But as we have talked about in many posts, the real key is getting good people and good systems to work together.  If the wheels on your car are out of alignment, you are in for a bumpy ride and might even end up in a ditch. It's the same thing if your people and your systems are out of alignment.

In his book, Less: Accomplishing More by Doing Less, Marc Lesser makes the point well:

"ORGANIZATIONAL ALIGNMENT: Organizations are in alignment when each person on the team or in the organization understands the larger mission and how his or her actions are connected to it. Organizations are out of alignment when individuals don’t fully understand and embrace the mission, goals, and objectives and don’t see how their particular activity influences and contributes to the organization."

The Company Procedures Manual delivers many benefits, but not enough people recognize its power as a strategic management process. Writing policies and procedures down and sharing standard best practices serves to align your organization. Not only does everyone know what to do, everyone knows why they are doing it.

As you are doing your strategic organization planning, take a look at the alignment between people and systems. If it's not in sync, developing and sharing clear standard operating procedures is the fastest way to get the wheels realigned.

By writing policies and procedures that clearly explain your unique business system you can guarantee that your employees understand their roles and responsibilities and are working on the right tasks. This is the very core of COMPROSE's Operations Mapping approach and Zavanta software.

For more perspective on this topic see these previous posts:

• There is a Place for Common Sense in Standardizing Operations
• Writing Policies and Procedures Started as a Way to Prevent Train wrecks
• Standardizing Operations by Systemizing Business Processes - Good Systems & Good People

A recent article in Quality Digest:“Thinking and Adapting in the Context of Standardized Work” by Mark Graban  raises a common myth we often hear: written standard operating procedures (SOPs) are too constraining and "robotic."

In his article Graban rebuts this myth pointing out that “Standardized work isn’t “mindless conformity.”

He further reminds us that Bill Marriott had written the same thing in regard to his hotel chain. 

Here at COMPROSE we can’t count the number of times we’ve heard people say:  “We don’t need systems or written operating procedures; we pride ourselves in that fact that our employees have freedom in how they their jobs.”  (in other words, SOPs are confining, impede freedom).  However, these same organizations were struggling with serious errors, inefficiencies and miscommunications because of a lack of standard systems.

Recalling one such conversation still leaves us a little unsettled. It came from a manager of a healthcare organization that was experiencing severe, sometimes life-threatening errors and a high number of complaints.  Yet, any mention of creating "structure" and operating standards was met with resistance.  

As with anything, you can go overboard.  You certainly don’t want to hamstring people. In his article Graban sites an interesting example of a situation where using your “brain” and common sense thinking is required!!

SOP best practice incorporates common sense. If you build the “right structure” you can free people up and give them the confidence to make the right decisions. 

The operative phrase is “right structure.”

Once you get the mundane and routine handled, out of the way and “systemized”,  everyone will FINALLY get to innovating and improving processes. 

As Shakespeare said, “A rose by any other name would smell as sweet,” but corporate manuals come in all shapes and sizes under all kinds of names: Employee Policy Manual, Company Procedures Manual, Employee Manual, Corporate Training Manual, Policy and Procedure Manual, Operations Manual, etc., etc., etc.

Does the name make a difference?

Yes! Although all manuals share a common goal of laying out consistent standards, streamlining systems, and standardizing operations within a company, their content, structure and purpose vary dramatically from type to type. The difference between “Employee” manuals and “Operations" manuals in particular is worth a closer examination.

• Employee Manuals cover basic employment rules and policies, such as hours of work, vacation and holiday policies, non-discrimination policies, overtime policies and so on. Most organizations have some sort of general employee manual or handbook blessed by the corporate lawyers and handed out by HR during new employee orientation. 

• Operations Manuals are unique to each organization and cover the specific work systems and procedures of the organizations. Operations typically contain processes, procedures, work instructions and job aids that help employees understand how to complete tasks correctly and in a standard way.

Many organizations have basic employee handbooks, but a large number of organizaions lack any kind of Operations Manuals and pay the price for this through inefficiencies, lowered productivity and higher costs. For more on why that is, see previous post Standardizing Operations Helps You Work Faster and Eliminate Waste. 

Many organizations make another classic mistake by mixing up Employee HR Manuals and Operations and Procedures Manuals. For more on why this is a problem and how to avoid it see Avoiding Common Pitfalls: Don’t Mix Policies and Procedure “How Tos”

Experts are becoming increasingly worried about the upcoming Flu Season. What happens if the H1N1 virus really does become a pandemic?  Banking and Financial Services will be impacted along with schools, government and the economy at large. What if half your workforce calls in sick?

Check out this article from Bank Info Security, "Pandemic Planning: Beyond 'Checkbox' Compliance" .  It offers some good insight for everyone not just Banks and Financial institutions.

This quote in particular from business continuity experts Harry Rhulen points out why having your detailed business "system" clearly documented is absolutely critical to managing emergency situations like a Swine Flu Pandemic could pose: 

"What any organization needs to do, if they would like to have a truly implementable, actionable communicable illness plan, is they need to do an analysis of how their business works. What products come into their business? What happens when they are there? What goes out?"  --  Harry Rhulen,  Bank Info Security, July 31, 2009

Capturing your organizations detailed business systems--including processes, procedures and work instructions-- is not just about checking a box to satisfy the compliance officer, or even just about improving operational performance under normal conditions.

Standardizing operations and streamlining business processes are the things that will allow you keep operating effectively when nothing is normal. H1N1 virus or not, now is the time to get your business systems in order so whatever happens your organization will remain operational.

Find out how the COMPROSE Operations Mapping method and Zavanta software can help.
 

In an previous post  Do "Unwritten Rules" Undermine Your Business?, The Good Business Systems squad warned about the dangers of operating your business with "unwritten rules." This question from the May issue of St. Louis Small Business Monthly highlights more of the dangers. What happens when star performers leave and take their "unwritten" knowledge out the door with them?

My biggest all-star employee just left the company to work for a competitor.  He was efficient, virtually mistake-free and energetic.  When he left, he took with him a bunch of unwritten knowledge about how he did his job.  I now have a couple of people that are similar in background and knowledge, but they just can’t match what this person was able to do.  Besides working on my employee retention, how can I get access to the hidden or tribal knowledge that people like this all-star have?  What is a way that I can document the habits that separate all-stars from bench warmers?

- Missing My All-Star, Maryland Heights Business Owner

If you are still relying on word-of-mouth training and tribal knowledge you are putting your business at risk. 

The very best way to retain the knowledge of star performers is to capture that unique knowledge as part of your company's operations manual and standardized procedures.  By writing policies and procedures that clearly explain your unique business system and contain the unique details that only your All Star performers understand you can prevent costly "brain drain" and also improve your corporate training effectiveness.

Don't wait until a star performer leaves and you are left with a big knowledge gap to overcome. COMPROSE Zavanta software is designed specifically to make it easy for your "All Star" Subject Matter Experts to capture their special knowledge and share it with others through effective policies and procedures. It provides all the tools necessary for writing policies and procedures that others will read and use. You can learn how other organizations have successfully implemented this strategy at www.comprose.com.
 

In today’s economy, no organization can afford to tolerate wasting effort, staff time, or money on inefficient operations for long. Surviving in tough times means making the best use of available resources and that means eliminating waste. That’s where examining your business systems comes into it. “Systemized” organizations accomplish more, in less time, with fewer resource. Simply put, clear work processes make organizations faster and less wasteful.  

Just look at the illustrations at right. Which looks more like your internal processes? 

Be honest. Ask yourself: “How much valuable time gets wasted in my company because of unnecessary steps, confusion, and “everyone doing their own thing.”

When work processes follow inconsistent or—even random—paths employees waste precious time “guessing” what to do and re-inventing the wheel instead of accomplishing their goals.

The larger and more complex your organization, the worse this problem gets when there are no standards or systems in place.

For more on how standardizing operations can help you weather tough times, download our complimentary white paper: 5 Reasons Standardizing Operations Offers You a Life line in a Tough Economy.   This white paper explore 5 reasons standardizing operations is a smart strategy to help your organization weather the tough times—and thrive over the long haul.

How many times a day do you and your colleagues stop and interrupt a co-worker or supervisor to ask a question or get help in performing a basic task? 

According to a report in Time Magazine, on a typical day, workers are interrupted about 7 times an hour! That’s 56 interruptions a day, and 80% of them are considered trivial.  According to a study by Basex Research, interruptions cost the U.S. economy $588 billion a year.

In our own research performing operations consulting to organizations across industries, we have found employees in typical organizations spend an average of 10% of their days consulting with co-workers and supervisors for help performing routine tasks. That amounts to 45 minutes a day spread across a 7.5 hour workday. If you have a 300 employee company with an average composite wage of $20/hr, that time rapidly adds up to a labor cost of $1,080,000 a year! 

Organizations who have a clear system of standardized procedures available to employees in easy to access operations manuals can dramatically reduce the cost of interruptions, work stoppages, and lost productivity throughout their companies. When employees can simply look up the answer quickly and reliably, they complete their work more efficiently without interrupting others and that saves the entire organization.

For more ideas on how streamlining your business systems can reduce costs and improve organizational performance, download a copy of COMPROSE’s free e-book, How to Be an Operations SuperHero: 3 Frequently Overlooked Ways to Improve People Performance and Help the Bottom line. 
 

Whether you have an official Operations Manual or not, the people in your organization apply policies and procedures everyday to guide decisions and complete their work. You might ask, Why bother to write down standard operating procedures and policies and make them "official"?  Many organizations don't. They operate by "unwritten rules," informal policies and procedures that get passed on—or NOT—by word-of- mouth from employee to employee.

Well you've heard the old joke, an oral contract isn't worth the paper it's written on. Unwritten rules are the same. There's no accountability. There's always somebody who "didn't get the memo." When nothing is written down and standardized, your organization will quickly develop inconsistent and inefficient operations practices that can lead to big problems over time.

How do you keep from undermining your business with unwritten rules? Capture your unique "system" in tangible form that everyone can look at, refer to, and correct when necessary.

This is the very core of COMPROSE's Operations Mapping approach. By writing policies and procedures that clearly explain your unique business system you can guarantee that your employees make better choices on a day-to-day basis to prevent errors, streamline business processes, and succeed at improving organizational performance.

For more, see 5 Common Mistakes Executives Make that Derail Operations Excellence.
 

What’s the most important factor in reducing task errors? Employee Skills? Training Methods? or the “System” itself  (aka steps used to perform the task)? 

An interesting research study carried out by Michael Byrne of Rice University and Elizabeth Davis of the University of Texas overturns many common assumptions about employee training methods and performance improvement. They were interested specifically in why “post-completion” errors are so prevalent. In a post-completion error, a person correctly completes a series of actions but then fails—or forgets—to complete an essential final step. Running a complicated photocopying job but then walking off and leaving the original documents behind in the copier is an example of a post-completion error most of us can relate to.

To investigate this, Byrne and Davis created controlled laboratory studies and compared performance results using two distinct step sequences for completing the same task.   They also, examined the relative effectiveness of employee training methods (reprimand, reinstruction, and praise) on correcting post-completion errors. We found the results, published in the journal Human Factors, “Task Structure and Post-completion Error in the Execution of a Routine Procedure”  fascinating. They surprised even the researchers.

None of the “motivational manipulations (reprimand, reinstruction, and praise) had a reliable effect on altering task performance (for either task completion time or task accuracy)." The only group that consistently outperformed the others was the one that followed the better procedure in the first place.

When the standard procedure that test subjects followed included the “post completion” step within the logical sequence of the task (rather than as a separate “after task” activity), errors were drastically reduced.  The only difference between the test groups was the ORDER of the steps given in the written procedure test subjects followed.  Yet, the performance results showed a significant difference in error rate.

The implication for organizations wanting to improve organizational performance and reduce errors is to the most effective technique is to streamline systems and procedures. Changing corporate training methods and varying strategic management processes, such as reward versus reprimand, did not achieve the results that simply defining a clear, efficient procedure did.

For more on how streamlining your business systems can reduce errors and improve performance, download a copy of COMPROSE’s free e-book, How to Be an Operations SuperHero: 3 Frequently Overlooked Ways to Improve People Performance and Help the Bottom line. 

Okay. You know it’s really bad out there when you hear “the best investor in the world,” Warren Buffet, proclaim the economy just fell off a cliff.  Fortunately, in the next breath he went on to say that the tough times are temporary and America’s best days are still ahead.

Whether you’re an economic optimist or a pessimist, the critical question on everyone’s mind is: What are the best steps we can take right now to pull us through today and get us ready for the rebound?

This economic downturn is the ultimate wake-up call for everyone to get back to basics, and build leaner, more accountable, results-oriented operations no matter what. In good times, standardizing operations to improve performance and efficiency might seem like a “nice-to-have,” but in times like these, it’s a survival tool.

By refocusing on operations and eliminating waste you can gain a critical competitive boost so you can “out-tough” this lousy economy.

Click to download a complimentary white paper: 5 Reasons Standardizing Operations Offers You a Life line in a Tough Economy.   This white paper explore 5 reasons standardizing operations is a smart strategy to help your organization weather the tough times—and thrive over the long haul.