Introduction: Why You Need to Review SOPs
Are you feeling stuck in the way you do business? Do you feel like the market is changing and your company is at risk by ‘doing things the way they’ve always been done? Having a regular review and assessment of Standard Operating Procedures (SOPs) on a quarterly basis will assist you in recognizing opportunities as well as inefficiencies. Systems that are negatively impacting the company are costing you lost revenues.
Family businesses, especially multigenerational companies, can be steeped in tradition. There is a history and a way of doing things that supported the company to grow and prosper in the past. The family is committed to the legacy, which can foster an attachment to keeping things going the way they have always been done.
The problem is the economic and political environments change, consumers’ values change, technology creates new opportunities and choices for customers, and new competitors are constantly entering the market. Staying agile and adaptive keeps you in the proactive seat rather than in a reactive one where you wonder what happened.
Today, we are looking at SOPs, one piece of the puzzle that can be both helpful and a hindrance to your company’s growth. It is all about how you use them!
Risks of Ineffective SOPs in a Family Business
Outdated procedures in a family business can create bottlenecks and points of friction, interfering with company growth. Using unreviewed SOPS from even two years ago can be quite disruptive. Consider the following questions to identify some of the risk areas and where outdated procedures can be costing your company money, time, and talent:
- Financial – are operating costs too high? Where could they be reduced? What products are selling well? Are there products with low sales? What are the profit margins on each product?
- Regulatory compliance – do practices still meet regulations and code, are there new ones that need to be implemented?
- Customer service – is there better service technology available, do you need to train staff? Are you responding to customer feedback and reviews?
- Equipment and technology – costly or outdated or needing too much maintenance?
- Onboarding and hiring talent – up-to-date training on procedures and company protocol?
- Culture – how is this assessed, what is being done or needs to be improved to build the strategic brand?
- Data – storage, metrics, evaluation, organization, systems?
5 Tips for Maintaining SOPs Effectiveness and Efficiency
You’ve got to think about the big things while you’re doing small things, so that all the small things go in the right direction. —Alvin Toffler
Routine reviews of SOPs make change easier to manage. Leaving things to pile up, like dishes on a kitchen counter, can turn into a mountain to deal with if not addressed in a regular, timely manner. Having a routine for review (like washing dishes) keeps your company running smoothly. Here are 5 tips for your SOP routine:
- Review SOPs quarterly.
- Create a process, agenda, and schedule for the quarterly review.
- Involve both employees and management in the review.
- Use metrics and data (this will give you real-time, current, and accurate data to make decisions from).
- Ask questions during the review, such as:
- Do the SOPs support the company’s vision, mission, and values?
- Is there an easier, more cost-efficient way to perform this procedure?
- Is there still value in each of the operational processes? What is that value?
- Who specifically needs to be involved in the review?
- Who will be responsible for the action steps coming out of the review? Who will monitor the completion of the tasks?
- Is the company working holistically in its operations? This will improve internal communication between departments, including finance, marketing, customer service, operations, and human resources.
Maintaining effective procedures and communication with employees will ensure the deepest success for your family business.
Making smaller adaptive changes with quarterly SOP reviews makes change easier to manage and monitor. Leaving SOPS unattended puts the company at risk. Risk equals potentially severe loss in revenues to corporations. Don’t let outdated SOPS negatively impact your family business.
Need help learning how to take your company through a detailed review?
I am an experienced family business specialist who knows how tough it can be to respect tradition while dealing with family conflict over change. Using assessment tools and my skills in counseling, I can support you, your staff, your family, and your company to move into the future you desire while honoring the family legacy.
Connect on a discovery call to chat about your specific needs.