To SOP or not to SOP

Enter an old (to me anyway) argument: should you treat employees like factory machines, making them follow detailed SOPs (standard operating procedures, or rules), or should you treat them like people and let them find their own ways to get the required results? My answer? Both.

Okay, let's start with the company. What does the company require to succeed? Results. For now let's forget the macro, "pick right strategy/business model/product or service mix" issues. That to me is a given: without the right macro choices no level of achievement matters. High achievement in a failed strategy still equals failure.

But the twain is not true: poor achievement in a perfect strategy also equals failure. Certainly there is more to success than making the right macro choices. The company still needs to perform, to achieve, to succeed.

Fine. Now, achievement, or, even better, the "work" of a company can be divided (loosely) into repetitive and creative tasks. The former are akin to production line steps, including the entire list of bureaucratic, file this, make three copies of that, tasks, as well as areas like shipping, finance and, well, production. Repetitive tasks make up the bulk of "work" done; using Pareto and the ever-useful 80:20 rule, maybe 80% of the "work" is repetitive.

The remaining 20% of the "work" requires some level of choice, some amount of creativity. While the job description may not change--write marketing plan--the innards of the task, the data, the resources, the urgency for examples, change each time it is done. Moreover, while each type of task can be described in the same language ("add column A to column B" and "analyze market situation"), plainly the non-repetitive tasks need more people-input than just following the task description. I can make a machine or a program (or a chimp) add A to B, but neither could analyze the market situation (no matter how many chess grandmasters the program beats).

A company needs excellent results in both types of jobs to succeed. Okay, but what does this mean to Dick and Acme? Where should Dick be expending his effort?

In a startup phase I think the answer is clearly training staff to do the repetitive tasks perfectly every time. The creativity inputs should come from Dick and his senior managers, the core of the startup. That means that Dick and his key managers should be listing each final result needed in each business area then working backwards to the initial inputs, flowcharting each step in the bsuiness process. (Once I get off Blogger I will show examples of flowcharts and process descriptions.) Creating SOPs, helping staff understand and follow the SOPs, then measuring two things: are staff following the SOPs and, if so, are the SOPs achieving the right results?

This "start with SOPs" is especially true in a cross-culture environment (continued anon).

Ah, about now is when the politically-correct beseech me to mend my ways, to treat people like people, not machines. "How can people grow if you don't let them try things on their own? If you won't let them make mistakes?"

Well, quite frankly I am not sure allowing people to choose whether or not to add Column A to B is good or wise policy. Most jobs require SOPs because they are repetitive and that the SOP will achieve the required result, every time. Effectiveness and efficiency, the twin Es of quality, depend upon this "achieve ... every time" outcome.

Yet I still feel there is place for creativity, even in repetitive, SOP'ed jobs. I contend there are two times when people are naturally creative: when facing a crisis and when following the SOP guarantees achieving good results and a bonus is offered for new ideas. Let's hope Acme is not facing crisis yet (though many would argue that the statup phase itself is just one long crisis: I digress).

So, what about non-crises creativity? It requires two inputs: People can not be worried about achieving the right result, making the SOP a security blanket; and people must be rewarded for new ideas that increase either of the twin Es. Built in is the rule that nothing can be tried that will hurt achieving required results.

What ends up is a policy that allows people the time to think of new ways (as good results are guaranteed by following the old) and motivation to think (because of the reward). How it works in real life is Mr. A or Ms. B has a new idea; a real-life test is carried out on a simulated case; if that works more tests are done; if they work out then the SOP is re-written and Mr. A and Ms. retire on their bonus reward. (I can dream can't I?)

The above is a long-winded (sorry: I was channeling Charles Dickens this morning) analysis of how Dick should go about building the company during the start of the startup phase. Crucial to success is that Dick can depend on staff achieving X results every time for the 80% of the tasks that are repetitive. Once that is done great things can happen; without that all that happens is Dick takes more and more aspirin every day.