Standard Operating Procedures and Theory Of Constraints

Having trouble deciding where to start with writing your Standard Operating Procedures (SOPs)?

A good place to start when writing your standard operating procedures is to look for constraints (i.e. bottlenecks) within your current business processes.

Going by expert knowledge on this matter (The Theory Of Constraints), at any given time, apparently there is always a constraint that is holding a business back.

Constraints are bottlenecks within your systems that could be severely affecting your business right now. The Theory of Constraints is well documented and more can be found here in Theory Of Constraints – Wikipedia

Case example

Let’s say you own a building company and your sales team are doing a great job, they’re signing up 10 new home builds per month which is a record, however, despite this you’re finding that cash flow is suffering badly.

Why is that? Technically you should be laughing all the way to the bank!

On investigation, you discover that the average time to first stage payment has gone from 2 months to 3 months.

Delving into this further you find the cause, it turns out that sloppy paperwork has meant that plans are being rejected by the local council and are being sent back to your design department for adjustment.

To your amazement you find that this has not just happened once or twice! but is happening on almost all occasions.

The result, “a one month delay on build starts”

This is obviously a major bottleneck in your business that needs to be addressed right now!

This is the perfect opportunity to develop your documentation skills.

To fix this you sit down with all the relevant staff i.e. draftsman, sales team etc to find out how and why this is happening.

Once you’ve established the “how and why” you then develop a new procedure to ensure that this doesn’t happen again.

You simply document the procedure in your SOP Software System and share it with all the staff concerned.

The key message here is – “Don’t spend your time in the wrong areas”

Too many businesses particularly smaller ones tend to focus on the wrong areas when documenting their systems.

They become over obsessed with having it all done and looking good and less on whether it’s being effective or not.

Mary from xyx ltd says we’ll release it all to our staff when we complete documenting all our systems.

Mary says “complete“,  but what does she mean?

What if there is a serious issue/constraint in the business that needs to be addressed right now?

Focus on the bottlenecks first, fix each one and then document the process via a Standard Operating Procedure then move to the next most critical issue.

It’s a fact that at any given time there is always a bottleneck within your business that is holding it back. It may not be obvious but it’s there

Release and timing are critical

Let’s say that you have uncovered a significant issue in your delivery system and in response, you’ve designed a new more appropriate method and then successfully documented it.

Do you share this with your staff straight away or do you wait until you have all your systems documented?

Obviously, you should not wait, but this is a common approach taken by many organizations.

The need to be perfect should not override the need to be effective.

A policy and procedure about “How to use the photocopier” may be nice to have but it shouldn’t delay the publication of other really critical information.

So you need to start on the most critical issues affecting your business first.

Document those, distribute these to your staff and then move on to the next most critical one.

It doesn’t matter that your sop software system may have only one document in it, at least its an effective one that will have an immediate impact on your business.

You need to be steely-eyed focused and only work on the things that count.

Don’t get me wrong, having a set of standard operating procedures covering all aspects of your business is the end goal.

But writing a policy or procedure on how you would like the tea room cleaned up at night is not going to make a scrap of difference to your bottom line.

It can at least wait until the more pressing systems are documented.

Finding constraints (bottlenecks) within your business is the perfect place to start when creating your standard operating procedures.

Another Example

Your Website has a healthy influx of daily visitors but only a small percentage are actually buying.

In this case, you might find that serious buyers tend to always use the live chat function and that one of your staff members (Mary) closes twice as many sales as Fred.

You investigate this further and find that Mary prepares herself much better than Fred.

She has developed a whole set of well thought out answers to standard questions which she has in a desktop file that she can simply paste into the chat and therefore can answer questions fast and with confidence.

Fred, on the other hand, is totally unprepared and tries to wing it and visitors end up being frustrated with the experience.

This is a classic constraint that could be fixed using an SOP

So you write one up…

WHOA…HOLD UP…STOP HERE !!!

Before I go any further when I say write up a Standard Operating Procedure  SOP I am presuming you have a system that allows you to not only quickly create your SOPs but one that also allows you to share and distribute these to all your staff.

If your policies and procedures are in a file, within a folder, within your network buried somewhere within the bowels of your organization or in cloud based drive then they are almost useless to you. They need to be easily accessible to all your staff instantly.

There are quite a few Standard operating procedure software systems on the market or SOP Software as it is sometimes called. You could use TKO Policy Guides for example but we’ll talk more on that later!

Here’s an example of how you might write a Standard Operating Procedure

So back to our live chat example you decide to write up a SOP which might be called “Preparing yourself for Live Chat Support“

Your Standard Operating Procedure SOP might look something like this

Conclusion

Writing standard operating procedures is never easy but the the above example gives you a simple structure to follow that you could use in almost any situation. It’s not legalistic it simply spells out the problem we want to solve, the rules going forward and how to go about that.

It even has a Tips, Tricks and Traps section to record learning’s as we go.

The important thing to note is that you have identified a constraint and have acted on this. The best part about this is that it should have an immediate impact on the bottom line.

Some tips on choosing a SOP software system?

1. Find a cloud-based SOP software system that you can access from any location. This is important because ideas will often come to you in the most unexpected locations plus you’ll also want your staff to be able to access the system whenever they need it.
2. Find a SOP Software system that is structured like a knowledge base with a website feel about it. The reason being is that you will want your staff to be able to read and search for content easily. Too many systems are too app like and require too much training to bring staff up to speed on how to use them.
3. Find one that is mobile responsive. This means that you can easily use the system on a phone or tablet.
4. Find one that helps you notify your staff when anything critical has changed.
5. Find one that has some ready templates provided. For example, some sop software systems provide ready-made templates of documents like HR Policies, Anti-bullying policies and Staff Grievance Policies. This is a great help because there is no need to spend your time on this standard stuff when you could be spending your time on writing the more critical policies and procedures that really affect your bottom line.
6. Find one that can also produce a standard operating procedures manual. Some cloud based SOP software systems like TKO Policy Guides still provide the ability to produce printable manuals. This is still a much needed feature.

Using bottlenecks within your business to trigger writing great repeatable systems might be the perfect place to gain inspiration

Here are some further links and resources to assist you on this subject

• What is a SOP (e.g. Standard Operating Procedure )
• What is the Theory of Constraints
• Download a SOP work instructions template
• SOP Software (Standard operating procedure software) – TKO Policy Guides to assist you in developing your policies and procedures

Related documents

• How to use bottlenecks in your business to help you write effective standard operating procedures (SOP)
• SOP Software to help you manage your standard operating procedures (SOP)

TKO Business Modeller

Pat Williams, is the creator of TKO Business Modeller & TKO Policy Guides software. Pat firmly believes in the benefit of documenting your business systems. In doing so, a business owner can build the system once, then duplicate themselves over and over again simply by inducting new people into the system.

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