In 2009, Dr Atul Gawande wrote “The Checklist Manifesto”, a book showing how implementing checklists for all procedures helped reduce the accident-rate in hospitals. From developing countries to the best hospitals in the world, all benefited from the simple measure of checking off items in a checklist.
The methodology copied from pilots (where we really care if they get something wrong) worked just as well in hospitals (where we really care if they get something wrong) will work just as well in your business start-up. Where you really care if you get something wrong!
As checklists are to doctors and pilots, SOPs should be to your business. Without them, you will be inviting the most common cause of business failure into your business.
While it’s just you doing your business, a detailed set of SOPs will help you do the following:
- Remember what you have to do without actually having to make the effort to remember.
- Avoid costly mistakes and resulting inefficiencies.
- Assess and change processes that could be improved.
- Speed up the training of new employees, so it isn’t just you doing your business.
By the time you reach that last point, your SOPs will be invaluable. They will be the thing that enable your business to become a proper machine. The things that your company does, that you have been doing so far, will now be executed by someone else.
If you want a Value Capture Machine, you will need SOPs. Any business without SOPs is just someone who is self-employed, or a small business that is hoping to succeed, rather than planning to. If your business plan is your big plan for success, SOPs are your micro plans that will walk you most of the steps of the way there.
There are a few different types: a checklist that ensures that everything has been done, a recipe with sequential instructions to be followed, and if neither of those work, then we have conditional SOPs, that can be adjusted depending on an input.
It’s important, but it doesn’t have to be complicated. Have a look at the house-cleaning trolley the next time you’re in a hotel, and you might see a bunch of laminated photographs hanging off the side. They’re graphical SOPs that show the staff exactly what each area of the room should look like – so much easier than trying to write all that out!
If you’re doing anything visual at all, try that out. Do it once and take a picture.
What should your cake look like? Make it and take a picture. What should the shop look like when customers come in? Do it and take a picture.
That latter example is where technology companies are taking us. I spoke to Joel Bar-el who runs Asia for retail analytics company Trax, and they use photography and computer recognition to tell distributors exactly what their shelves should look like, able to update it in real-time. If you don’t do that in your business, you can’t compete.
It’s important, but it doesn’t have to be original. Just like you wouldn’t try to create a bread recipe from scratch, nor should you think you have to create your business SOPs from scratch. Browse the internet: there are thousands there, for all types of industry.
Download, print, and try them out.
If they don’t work for you, you at least have a base that you can improve. That’s crucial, and we’ll come back to that later.
These SOPs are the operational controls of your business. If you don’t have them, there is no reason why your business won’t get out of control and go horribly wrong.
It might not be as disastrous as a plane crashing or a surgery going wrong, but it might kill off your business just as quickly.
Now you have control over what’s happening in your business, time to get better control of the money.