By Chris Stone, Project Manager for Rocky Mountain Trade Adjustment Assistance Center
Implementing change in any organization, to achieve a desired future state, will always be a challenge. One of the challenges is to put into writing, exactly what the organization seeks, both strategically and operationally.
This documentation is most effective when stratified in terms of policies, procedures and instructions.
Policies can address a wide range of topics. Examples include rules for offering price discounts to gain new business or prohibitions against working with suppliers who have unacceptable labor practices.
Procedures serve to guide how an organization will go about doing a particular process. Examples include purchasing raw materials or conducting marketing research. Procedures are commonly called Standard Operating Procedures.
Instructions provide the step-by-step details of precisely how to perform a task. They are commonly called work instructions and include focused instructions relating to a specific task which needs to be done in an exact order. As an example, consider how Domino’s Pizza produces a pepperoni pizza in a few minutes. There are specific instructions for putting together each ingredient in a certain order as the pie moves along the counter. Then, the pizza is baked at a specific temperature for a prescribed period of time.
Increasing in detail and specificity, documentation moves from broad policy to specific instructions. A successful improvement project will often require updates, or brand new, policies, procedures, and instructions.
Let’s take a closer look at the three types of documentation required to sustain the changes you make from an improvement project.
Policies are principles, rules, and guidelines formulated to influence decisions and ensure actions align with organizational goals.
They enable people to address problems and issues without having to consult executives or specialists for each decision. Policies also address the roles and responsibilities of executive management.
Consequently, key policy statements will serve to shape an organization over the long term.
An effective policy should be:
- Appropriate – it should align with the organization’s core values and stated objectives; conflicts will lead to poor implementation
- Clear – it should be simple and easily understood by all in the organization; avoid jargon and ambiguous language, to avoid misunderstandings
- Comprehensive – it should have a wide scope and handle a wide range of routine scenarios; do not allow a long list of exceptions or loopholes
- Stable – it should be stable, providing certainty to those who look to the policy for guidance
Note that policies are not steps or actions. They are statements which will guide decisions and actions.
In addition, policies should not be arbitrary or demand some form of perfection. You do not want to encourage any type of unsafe or unethical behavior.
Illustrative Policy Example: Herman Miller Supplier Code of Conduct Policy
As industry leader in high end commercial furniture, Herman Miller, holds itself and its suppliers to a high standard in relation to conducting business in an ethical and socially responsible manner. The following policy documents the company objective of maintaining the leading position in the commercial furniture industry. This clear and comprehensive policy communicates the company’s vision to customers, investors, employees, suppliers, and other stakeholders.
Herman Miller, Inc., and its subsidiaries (“HMI”) are committed to conducting business in an ethical, legal, environmentally sustainable, and socially responsible manner. HMI expects its suppliers to share its commitment to creating a Better World with the goals of reducing waste, using resources responsibly, supporting workers’ rights, and advancing the welfare of its workers and the community. HMI expects its suppliers to adopt sound labor practices and treat their workers fairly in accordance with local laws and regulations. In addition, suppliers must comply with the following standards:
- Freely Chosen Employment
- No Child Labor
- Minimum Wages
- Working Hours
- No Harsh, Inhumane Treatment or Abuse
- No Discrimination
- Freedom of Association
Additional information at: Herman Miller Supplier Code of Conduct
- Price discounts – Approval required for granting price discounts greater than 10%
- Purchase orders – Authorization required for issuing large value purchase orders
- Project closure – All completed projects will be analyzed for lessons learned
- Customer entertainment – Customer meals and entertainment over $300 must be pre-approved
- Financial reporting – Financial results will be reported within 14 days from the end of the quarter
- Carbon footprint – Our carbon footprint will be reported to the Carbon Disclosure Project
- Air freight – Approval is required before air freight shipments to a customer or from a supplier
- Monthly planning – The S&OP process will be completed by the end of the 5th working day of the month
A procedure describes the sequence of activities, or set of actions, which is the official, or accepted, way of doing something.
Essentially, a procedure is how a process needs to be done. It ensures you get a consistent outcome.
An effective procedure will contain elements such as:
- Purpose – why the procedure is required
- Scope – what needs to be accomplished
- People – who will perform the action
- Location – where an activity is performed
- Resources – what inputs are needed
- Customer – who gets the outputs
- Measurement – how do you know it is effective
- Terms – key definitions and terminology
An added benefit of procedures is their use as training tools. Experienced employees become better through the deeper thinking required to write a procedure. New employees learn quicker when a logical and well written procedure is used for the onboarding process.
Illustrative Example: Onboarding a Client at an E-Commerce Professional Services Agency
An e-commerce creative agency executive recently outlined the details of his firms “client onboarding” procedure. He asserted that, if he were starting all over again, this would be the first business procedure he would put in place. The reasoning is how his firm’s first interactions with clients sets the tone for the rest of the relationship.
He outlined his firm’s business onboarding process:
- As soon as the prospect becomes a client, we send them a welcome email with what’s next and what to expect during our engagement. This email sets the tone, and even includes a personalized thank you video, and a link to schedule the kickoff call.
- Internally, we create all the project documents and folders needed, send the invoice, and finalize the project timeline and who’s going to be involved.
- Once the kickoff call is scheduled, we send another email with all the systems and data we need access to in order to perform our work and achieve the desired outcomes.
- During the kickoff call, we determine key measures of success and establish timelines. We also schedule a fixed time for weekly check-in calls.
- We send them a company questionnaire to understand how they see their business, their strengths, challenges, and their customers.
The above is only a summary, as the full process is many pages long and highly contextual to the company. It is also important to realize this process is always being updated and improved. With this process, the agency ensures every new project is organized and gets kicked off in a manner which provides a great start for new client relationships.
- Disposal of hazardous materials
- Predictive maintenance of equipment
- Managing supplier scorecards
- Responding to a request for proposal
- Annual strategic planning
- Changing over an operating room
- Processing a customer order
- Creating and processing expense reports
A work instruction is the detailed description of how to perform a task. It is step-by-step and much more detailed than a procedure.
Work instructions should be very detailed and explain how to accomplish a specific task. They may also be supplemented with additional documentation, such as technical manuals, support notes, and specifications. Many software tools now have the instructions built into the help menu.
A typical work instruction:
- Contains fewer than 10 separate actions
- Outlines a task to be performed by 1 person from start to finish
- Requires a relatively short time period to complete
- Leverages visual aids to show the work rather than words which describe the work
Many organizations create work instructions to match the specific tasks referenced in a procedure. This can also clarify who is responsible for doing each task.
Illustrative Example: IKEA Work Instructions
The assembly of an IKEA “Billy” bookshelf is a project, even those with limited skills can undertake, without fear. Clearly, IKEA has put a lot of thought to develop the work instructions for assembling this bookshelf.
- Each tool and part is enumerated
- Each step is isolated and requires a kind of mindfulness to do one thing at a time
- Right and wrong are clearly illustrated with line-drawn figures
- Graphic presentation, without a single letter of type
Using this simple universal graphic work instruction, almost anyone can assemble the Billy bookshelf. These work instructions represent a perhaps under-appreciated factor in IKEA’s ongoing growth and worldwide success. Marketing research has shown that once someone builds an IKEA piece, they are less likely to part with it, a phenomenon now known as the “IKEA effect”.
Work Instructions as “Sustainable Competitive Advantage”? IKEA’s thoughtfully developed work instructions provide it with a competitive advantage, strengthening the connection between company and the customer, who takes pride in self-assembling a product. Creating an emotional connection between a company’s products and the customer is highly desired by companies. Certainly, few would have anticipated that well-developed, thoughtfully designed work instructions would support such an emotional connection and result in a competitive advantage.
- Making the bed
- Making pizza dough
- Cleaning an operating room table
- Entering a customer order
- Packing an order for shipment
- Testing a printed circuit board
- Installing a dishwasher
- Calculating a sales commission
Bringing It All Together
The challenge for improvement project teams is to ensure the proper documentation is in place when changes are made. It is important to fully understand the distinctions between the types of documentation.
Each type solves different needs. The focus and details increase as this documentation moves from policy to procedure to work instruction.
Don’t create confusion. Many organizations struggle with policies which are vague or completely missing, procedures which contain too much detail, and work instructions which fail to contain all the steps.
The following examples summarize how the three types of documentation could align to form an integrated package.
- Policy – Cleaning goal (All guest rooms will be cleaned by 11:00 AM)
- Procedure – Cleaning guest rooms (What gets cleaned and organized)
- Instructions – How to make the bed (Step by step with pictures)
- Policy – Customer discounts (anything over 10% requires approval from VP of Sales)
- Procedure – Responding to request for proposal (What is done and who does it)
- Instructions – Calculating expected gross margin (Step by step on the proper calculation)
About Chris Stone
Chris is a Project Manager with The Rocky Mountain Trade Adjustment Assistance Center (RMTAAC) in Boulder, where he helps small U.S. manufacturers improve their competitiveness versus import competition. RMTAAC is a federally funded (U.S. Department of Commerce) program that is managed through the University of Colorado, Leeds School of Business.
Over the course of his 18 years at RMTAAC, Chris has helped turn around more than 100 manufacturers across a wide range of industries in the Rocky Mountain Region.
“With my client companies, I like to focus on what is realistic and “do-able,” given a company’s background, experience, and capabilities. Oftentimes, small companies simply don’t know how or where to get started with change. They lack a vision. I view my role as a facilitator and guide, like a business coach, helping companies get moving with key projects, starting small and building upon successes. As companies get comfortable with change and start to see results, they gain confidence and are then able to refine and clarify their vision for the future.”
Chris has worked in manufacturing for more nearly 30 years, beginning in the quality control department of a Colorado Hi-Tech manufacturer. His educational background includes a BA in Economic History, focusing on regional economic development, as well as an MBA from The Leeds School of Business at The University of Colorado.
Beyond the world of work, Chris is an avid sportsman. He likes to keep fit playing tennis, mostly against his daughter and son, along with the occasional mixed doubles with the wife versus the kids, who, these days, generally win.
See: LinkedIn profile