The ability to expand your business depends utterly on your ability to develop, write, make available and enforce good policy.
It’s been said that life is a game. If so, business, being part of life is a game. The easiest way to understand policy and its importance is in this context. Pick your favorite game. It can be a card game, a board game, a sport, etc. It has rules doesn’t it? Policies are the rules for your business. They tell everyone in your organization how to play the game of your company.
When you’re growing a business you evolve policies and procedures that work best for your business. Some of them are born out of the need to comply with the government laws and regulations, some of them evolve from trial and error. However they evolve, they should form the structure of the business and the know-how concerning producing your products or services. Some of it may be quite proprietary information.
Your policies must be workable. Procedure A, when followed exactly, should get the same result every single time. Whether that result is rendering a highly technical service or waxing a car, the procedure yields the exact same result every time it’s used. If it doesn’t get the same result every time, it isn’t workable.
A policy is repeatable if it can be followed or applied to similar circumstances regardless of the specific people involved. Such a policy should empower the personnel involved in that area to simply handle whatever the policy is addressed to without further approvals. An example of this might be a pricing policy that gives the sales person the authority to negotiate with a prospect within set parameters, such as a quantity discount up to X% with a minimum purchase of Y units. If the customer is placing an order that’s Y units, the sales person doesn’t have to get management approval on the discount as long as it’s X% or less. The sales person can repeatedly negotiate with customers on this basis without ever having to get further approval from management because his actions are prescribed in policy.
Laws can change. Advances in technology occur regularly. These things might necessitate or prompt changes in your policies or procedures. When they do, the changes must be documented in policy. The old policies must be gotten rid of and replaced by the revised versions and all staff need to be notified that a change has been made. This ensures your policies and procedures remain current and the staff involved are kept up-to-date.
Policy Must Be Knowable
Policies must be in writing. Depending on the industry or the resources of the company the written policies can be accompanied by video, or photos.
Your written policies must be easy to understand. This includes defining the terms used in your industry or company jargon. Every industry has its specialized terms. Clear definitions should be provided when they are used in policy. This practice ensures that staff who are taken on who may not be familiar with those terms will be able to understand your company policies.
For policy to be knowable, the staff needs to be able to access them and read them whenever necessary. There are a variety of ways to accomplish this. You can keep a policy library that has all of your policies in manuals or files that are accessible to all staff. You can make electronic copies available to your staff on your company computer network or an employee section of your company website (just keep it secure so it can’t be accessed by the public).
Policy Must Be Enforced
It’s vital that policies are enforced and that they’re enforced uniformly. A policy that is directed at all employees must be followed by all employees. You can’t be selective about who does or doesn’t have to follow them.
Similarly, using the pricing policy example. A sales person who gives a larger discount than X% without getting management approval must be corrected in an appropriate manner so that it doesn’t happen again. Conversely a sales person seeking approval on discounts that fall within the parameters of the policy would also have to be corrected as he too is failing to follow the policy.
All of the above apply to a “one-man band” or a national company. Policy becomes increasingly important as an organization grows in size and/or complexity. The bigger the organization the more policy is needed. Even if you’re a one-person operation, you will benefit from having definite policies established about how you do things. This will help keep you consistent and help you retain customers and generate word of mouth. Who knows, they might even help you grow from a one-person operation to a large enterprise.