Standard Operating Procedure: Need Of The Hour

Most people think standard operating procedures are a waste of resources, time and money. Over the years I have heard statements like no one in the organisation ever reads them, our organisation is too complex for a straight forward document, we are in the creative space and SOP will limit our flexibility, the department will be able to draft it in a few days.

In the ever-increasing time of digitalisation, need for customisation and reduction of expected execution turn arounds, has resulted in fuelling the complexities of our world. In turn, impacting possible decision-making options have grown multiple-fold adding to the complexities.

It’s humanly not possible for anyone to remember all the action steps they need to perform at any given point in time. The Checklist Manifesto: How to Get Things Right by Atul Gawande, talks about n number of such situations which have resulted in million-dollar losses, and which could have been prevented with a simple stupid checklist aka SOP.

Keystone Initiative conducted a project on line infection rates in Michigan’s ICUs. They published their findings in December 2006 edition of the New England Journal of Medicine. The findings helped hospitals reduce line infections in ICUs by 66% within the first three months resulting in an estimated saving of $175 million and more than 1,500 lives. ‘The solution that has still sustained for several years now was a stupid little checklist that was created for ICUs’ – The Checklist Manifesto: How to Get Things Right.

A stupid little checklist has resulted in saving invaluable lives of people, heavy pieces of technology, expensive state-of-the-art helicopters to millions in savings across corporates.


What is SOP and checklist?

If one Googles the meaning of the two words – ‘checklist’ and ‘SOP’ – you will come across multiple definitions and explanations. The crux of all explanations – list of things that need to be done and step-by-step instructions that help anyone perform routine operations efficiently, with quality, consistency, timeliness while ensuring compliance. These documents help create an environment that ensures fail safes and well-trained resources.


Do we really need these documents?

The benefits of having a well-invested SOP and checklist exceeds the initial effort and cost involved. While actually executing daily operational needs and challenges whilst handing numerous pressures of the day, we all respond and execute the same situation differently in comparison to training and expected execution requirements. Regardless of the size of the organisation, there are a few ways SOPs can help:

Consistency in process and across the organisation

Every head of department, team member, person in the organisation will perform the same task differently, address the same challenge differently. These varying approaches may be the best individually but collectively as an organisation it reflects poorly besides the challenges of controlling actions, costs, economies of scale, its impact and addressing risks.

SOP provides with that consistent base, detailed process listing, checks and balances to perform, role definition and predictable outcomes-based organisational vision and tone on top.


Reduction in errors

Humans are not perfect and there will be errors in tasks to be performed. Although errors cannot be completely prevented or eliminated they can be managed resulting in reduction of cost and increase in efficiency. During the test trial of the American military’s next-generation long-range bomber in 1935, the flying fortress crashed resulting in a loss of millions of dollars. The reason for the crash was identified as ‘pilot error’. The ingenious solution to the pilot error was a pilot checklist.


Reduction in learning curve

The biggest cost and impact on efficiency of any new joinee is the learning curve. Time is cost and crucial in any business. A well written document helps employees understand the tasks, goals, expectations, reportability and purpose of what they need to achieve and deliver.

With an SOP in place, training about the processes, delivery timelines and contact persons are articulately shared and employees can acclimatise themselves with the business environment and organisational culture with minimal need for face-to-face training and involvement of other team members.


Process optimisation and cost saving

An optimised process helps businesses meet efficiency and economics. It helps in improving performance and gives agility and ability to make informed decisions in expedited timelines. While drafting a well-documented SOP, all processes are reviewed for standardisation across the board, inter-department interfaces are reviewed, process input and output are reviewed, along with effort duplication, control maturity and control completeness. This helps the overall internal control framework for the company.


How do you draft a SOP?

Every business is unique in its own way. Today, the world has moved from the concept of globally accepted best controls to what is best and good for an individual organisation. That is why no two business can have identical SOPs. However, a few critical steps remain the same while drafting the document.

Businesses should keep tips like these in mind to ensure the SOP evolves and is beneficial with each passing year:

  • Review annually and whenever there is a major change in process
  • Know your target audience while drafting
  • Language should be clear, crisp and simple
  • Ensure consistency in writing style, formats across different SOPs
  • Draft in the language must be easily understood by the audience
  • Have a central repository
  • Track all changes to the SOP
  • Allot new version number when any change is made
  • Test the accuracy of the SOP prior to roll out
  • Ensure input and output across departments and processes are in sync

Helping your business

SOPs can be that fundamental way to internal and external communication across all levels and can do a great deal of good to businesses of any size. It also helps employees improve and deliver better experiences for themselves, team members and most importantly customers. It’s time to be that change that your organisation needs.

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Tulsi Khemka

Tulsi Khemka is a CA with 18+ years of experience in the space of risk, systems and security having worked with corporates in India, Nepal, US and UK.

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