Why Policies and Procedures are Important

admin, 9/14/2019

The concept of corporate regulation is as old as commerce itself. Organizations have always historically set some form of rules and regulations in order to help direct their staff in their daily operations. The use of the term 'Policies and Procedures' reflects both the policing of these regulations (policies) and the documenting of specific steps (procedures) that are followed in order to execute business operations.

The reasons that policies and procedures are critical to organizations are varied but always center on the plethora of benefits they contribute towards the operational strength and longevity of an organization. In this article several of these will be detailed.

Why Policies and Procedures are Important For Business Continuity

One problem that often confronts organizations is when operational procedures are only known to one or more employees, often because they devised the procedures themselves. This presents itself as an operational risk because should that employee leave the organization, fall sick, or even take vacation, the organization is left partially inoperable - which compromises business continuity.

To mitigate against this risk, organizations often seek to document those procedures. By documenting the procedures another staff member would be able to take over their responsibilities, so long as the documentation is comprehensible and can be picked up in a reasonable amount of time. 

It may sometimes be necessary to conduct a procedural review within the organization, in which someone oversees the day to day operations of each staff member to ensure that:

  • The operations they perform are fully documented 
  • And, if not, whether this is because the documentation is deficient or the staff member is erroneously deviating from what was prescribed.

Tip: If you have enough resources in your organization, why not assign a staff member each month to team up with another staff member to perform this review? Sharing knowledge can always help reduce dependencies in the organization, and provide the opportunity for critical feedback.

Why Policies and Procedures are Important For Increasing Efficiency

Often when an organization documents procedures, they were developed under a rigorous process - possibly having passed through several iterations through which the procedures were optimized or improved. The current procedures often represent the product of that process, and are the fruits of what is often years of investment. This is especially true if the organization has a process in place to review and optimize procedures on a regular basis.

Because of this, having staff follow procedures is critical to the efficient operations of the organization. Should a staff member decide to improvise the procedure, or naively reject documented procedures because they feel their experience or "gut instinct" is adequate, they will be operating inefficiently which can compromise the whole performance of the organization.

Why Policies and Procedures are Important For Increasing Consistency

A big part of an organization's reputation can stem from the consistency of their product or service. The procedures involved in creating a product or providing a service are critical, and thus following the same procedures will likely be the only way to achieve the same level of service or quality of product on a consistent basis. 

This is why it is paramount that the organization's procedures are followed to the letter so that clients have a reliable, predictable and consistent level of service or product quality on every single interaction.

Why Policies and Procedures are Important For Safety

The company's procedures not only the most efficiently devised, but they also often represent the safest approach. Health and safety is a critical part of any operations. Nobody wants anyone to get hurt. An organization's staff are people who often have families that depend on them. And from a business perspective alone it can result in lost time and significant liability. 

When staff ignore written procedures and instead "wing it", they are not only risking the efficiency of the company, they are also risking the safety of themselves and potentially of other workers - if not customers. Safety is a critical aspect of following procedures, and one of the chief reasons that staff familiarity with policies and procedures is of utmost importance.

Why Policies and Procedures are Important For Increasing Quality

How many recipes instruct the chef to "pour in as much as you like" instead of providing measurements? Clearly any variation in the measurement will impact the product at the end of cooking. Similarly, any variation in following procedures will impact the quality of the product or service that is being rendered. Customers expect consistency in the quality of their product. 

This is one of the reasons that chain restaurants or cafes are as popular as they are: because they have very strict procedures for creating their products. This results in a degree of consistency in each of the products, no matter where or when you order them. But an organization doesn't have to be a chain restaurant to have procedures. Any organization that has detailed procedures that are followed consistently will consistently produce quality products, and over time this will naturally attract customer loyalty.

Risk Mitigation

Safety is one aspect that can expose an organization to legal liability, but there are many others. For example an organization may have a policy for writing social media posts to stop people from posting copyrighted material. If a staff member ignores that policy and posts a copied article on social media, your organization will be liable and may be sued for copyright infringement. Problems with product quality can also expose an organization to lawsuits. 

The organization's documented policies and procedures can be a key risk mitigation measure.

Conclusion

In this article we've listed a few reasons that organizations choose to document their Policies and Procedures: to protect business continuity, increase efficiency, consistency, safety, quality and for risk mitigation. 

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