Why Policies and Procedures Manuals Are Dead (and what you should replace them with)

David Finkel

October 19, 2015

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I've asked over 1,000 business owners these two questions at the various keynotes I give to business groups and the answers are always the same. "How many of you ever worked at a business that had a formal policies and procedures manual?" 80-90 percent of the hands go up.

"How many of you actually used the policies and procedures manuals after the first 30 days of hire to get meaningful work done?" Fewer than 3 percent of the hands now get raised.

Why is that? We've all been taught how valuable documented procedures are to help a company capture the best knowhow of how to do a process, yet so few companies are able to get their teams to actually buy into this idea and use the systems that are created.

The biggest problem is the outdated model of a "Policies and Procedures" manual. By its very nature a policies and procedures manual is big book or binder filled with hundreds of pages of text that layout the steps to do all of the functions inside a company. They are heavy, intimidating, overwhelming, and cumbersome.

For years I've suggested to business owners that instead of a policies and procedures manual they build out their "UBS" (which stands for their "Ultimate Business System"). Your UBS is a living, breathing collection of best practices in a user-friendly, searchable structure that your team can easily access, update, refine, and add onto as they perform their job functions.

Think of your UBS as the master system of how you'll save, store, access, and update your systems. Generally it will be a collection of file folders in a secure, cloud based system, into which you'll put your checklists, your worksheets, your templates, and your archived files. By creating a standardized naming structure you can quickly search and access any needed tool in seconds by a quick key word search (thing "google") of the folder.

Inside your UBS you'll have your systems on how you hire, how you generate leads, how you process sales, and how you pay your vendors.

Your goal is to make your UBS a living, breathing way of doing business in your company-an ongoing practice. You'll know you've won when you regularly hear your team say things like, "Did you add that to the UBS?" and "Great solution to that problem, can you UBS it?" This is not something that you sit down and "do" in one sitting. Your UBS is a discipline that your team will cultivate and refine over the long term.

Here is a sample layout of your UBS:

1) Sales Marketing

- Lead Generation
- Lead Conversion
- Sales Team Tools
- Sales Planning and Strategy
- Sales Metrics and Reporting

2) Operations

- Production
- Fulfillment
- Purchasing
- Facilities / Infrastructure
- General Administration

3) Finance

- Accounting / Financial Reporting
- Collections
- Accounts Payable
- Budgeting
- Financial Controls
- Cash Flow Management

4) Team

- Hiring and Orientation
- Training, Review, and Retention
- Benefits Administration
- Labor Compliance
- Exit Processes

5) Leadership

- Strategic Planning
- Leadership Development / Succession Planning
- Company Culture and Traditions
- Communications Companywide

Your UBS will not only help you ensure that your systems capture the most relevant, useful knowledge of how to run a specific part of your company, but it will help you spread the into the culture of your business the discipline of systems based solutions versus ad hoc, difficult to replicate and scale behaviors.

About the Author:
David Finkel
is co-author of, SCALE: 7 Proven Principles to Grow Your Business and Get Your Life Back (written with Priceline.com co-founder Jeff Hoffman), and one of the nation's most respected business thinkers. A Wall Street Journal and Business Week bestselling author of 11 business books, David's weekly business owner e-letter is read by 100,000 business owners around the world. David is the CEO of Maui Mastermind®, one of the nation's premier business coaching companies. Over the past 20 years, David and the other Maui coaches have personally scaled and sold over $2 billion of businesses.

Opinions expressed by the author are not necessarily those of WITI.

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