Starting up? Don’t think that you would start your business and make the policies and procedures for the succession of business later. I know most of us think that making policies and procedures at a very early stage of business is a waste of time and capital, but it’s very important for the business to become successful.
The reasons why policies and procedures are required:
- It brings structure to a company
By creating policies and procedures, a company knows what the rules are, what success and failure is. It also helps on succession planning of a company. Mostly startups fail due to lack of policies and procedures, they focus more on the generating revenue, marketing and other things which are undoubtedly very essential but while doing this the founders come across situations where the vision diverge and things start falling apart. If we have a set of policies and procedures at this point, referring to which a decision can be made without any diversion from the vision of a company.
This will also help leverage human capital, you retain good people when you have a structure.
2. It brings operational success to a company
During succession planning, the key is operational success. If a company doesn’t succeed operationally, it cannot progress. The key to operational success is a company’s policies and procedures. There are many people and different level of authorities involved in running operations, if these people do not have a direction, the decision making will diverge and thus a company can become unsuccessful operationally. By creating policies and procedures, the operations employees are restricted to a fixed direction which is in the company’s best interest.
3. It helps Risk Management
Loss of knowledge is very critical to the success of a company. During a succession planning a company should be prepared for a planned or unplanned loss of knowledge. In such situations, the policies and procedures can direct a company to assess the risk of losing a key individual in a critical role, and can mitigate the damage caused by turnover. Here the policies and procedures will also help in onboarding a new individual in that critical role at the same time maintain decorum of a company and avoid panic impacting success.
4. It brings Control and Compliance
By ensuring that policies and procedures are in place for succession planning, businesses can also ensure they are in compliance with regulatory rules and guidelines. Compliance and control are very important to any company’s success. Control and compliance comes in place by defining the policies and procedures of a company. Essentially, the compliance and control policies of a company are dynamic and allow room for change to grow with the company.
Additionally, the benefits of policies and procedures are as mentioned below and if implemented from startup phase, it will help develop a very successful business.
- Employees are provided with information that allows them freedom to carry out their job and make decisions within defined boundaries.
- Employees understand the constraints of their job without using a ‘trial and error’ approach, as key points are visible in well-written policies and procedures.
- Policies and procedures enable the workforce to clearly understand individual & team responsibilities, thus saving time and resources. Everyone is working off the same page; employees can get the “official” word on how they should go about their tasks quickly and easily.
- Clearly written policies and procedures allow managers to exercise control by exception rather than ‘micro-manage’ their staff.
- Clearly written policies and procedures provide legal protection.
I tell my people when it comes to Policies and Procedures; “Restrictions Apply”, Think before you do!