GPS: Operations: Standard Operating Procedures

Why spell out procedures?

There are many more reasons to formalize your business processes beyond the expectation that one day a buyer may come knocking. Having each process spelled out provides accountability to those responsible for each step, flexibility when needed (due to illness, maternity leave, jury duty, etc.), increased streamlining and refining of the procedures, easier training as new people join the company, and documentation — which is the “special sauce” that takes a business from being an idea to a tangible, real-world operation.

Don’t just climb the ladder, build one.

Many business owners focus on climbing the ladder and moving up. Remember that ladders extend in both directions, so as a business owner moves up, they should be building the rungs of that ladder below them as they climb. Documented procedures make a sturdier rung that allows employees below the business owner to step up the ladder and take on more tasks from the business owner. This type of ladder ultimately allows the owner to get out of the daily grind of operations and into the command chair over an expanding company. The goal is to have a team that is pushing and pulling one another up the ladder, always replacing themselves with the next team member.

Documenting standard operating procedures (SOPs) can be a daunting task. The process of documenting and creating formalized SOPs is extra work outside of normal operations. It’s also a task that has no ending or completion date because procedures should constantly be examined and refined. Any record of procedures will be a living document that should change over time — like a coach’s playbook, it should be informed by developments in the lineup, the game, and the season.

Getting Started

The most difficult step to documenting SOPs is knowing where and how to begin.

• Set a goal on how many processes you would like to document each month.
• Begin with the processes that are most well-known or easiest to document.
• Select a team member who will be passionate about building and documenting each procedure. This team member will be accountable for the care and updating of these living documents.
• After team members have a chance to review and comment on each procedure, make it a regular, revisited part of your business’s operational meetings.
• As processes change and improve, remember to update the documented SOP so it is always current.

Make sure all aspects of any process are transferable — that is, someone else can pick up the playbook, learn the process, and succeed with it. As you divide work up formally in a procedure document, make it crystal clear who is accountable, which should be well-defined and transparent. Issues will be easier to diagnose and resolve. This will help new team members move into their roles and climb the ladder themselves.

Your “special sauce” is found within the processes and procedures that uniquely belong to your business. As you build a library of documented SOPs, you are building a well-oiled money-making machine. Now your company is easily transferable and more valuable. That is the goal.

“Speed. That’s the name of the game. The first stop for every McDonald’s hamburger is the grill. Manned by two cooks, whose sole job it is to cook those all-beef beauties to perfection. Meanwhile, as the patty cooks, our dressers get the buns ready. Watch out. Burger crossing!"

– John Carroll Lynch as Mac McDonald in the 2016 film “The Founder”

The scene above shows Michael Keaton in the role of Roy Kroc as he first glimpses the SOP put into place by the original owners of McDonald’s. Roy immediately recognized the value in this new way of doing things — it wasn’t the four walls, the taste of the burgers or the design of the logo or uniforms. While those things all play a part, the documented procedures made it a well-oiled machine.

Eagle Corporate Advisors works with business owners, like you, ready to overcome obstacles and transform their paths to success. Throughout the journey, we work together to create value across your organization and unify your team toward sustainable results.

We do this first by listening and gaining a thorough understanding of the current state of the enterprise, along with your vision for the future. We leverage our experience and proven process to create achievable steps and timeframes. The optimal path is achieved through candid conversations as we make the journey together, giving you the freedom to choose the path that’s best for you.