What Are Standard Operating Procedures? How Do SOPs Influence Decision Making?

Whether you are starting a business or trying to improve an existing one, your business might consist of many moving parts, all of which need to move together to keep things functioning smoothly. For this, you will need to understand an array of things that needs to be done daily, who needs to do these tasks and the best approaches to perform this. Working towards solutions to these aspects might be the first step towards systemising your business. In order for your business to run like a finely tuned machine with all of its parts working in concert with one another, all your team members must be on the same page at all times about the tasks that need to be done. This is where a standard operating procedure (SOP) comes into play. With an SOP ( https://digitalfinancexperts.com/services/accounting-policies-and-procedures-manual/ ), you will sufficiently provide a starting point for everyone involved in the business.

Writing an SOP is essential for the sustained success of any business. Writing effective SOPs set the foundational block for most activities necessary for the running of the business. They allow the businesses to define and package their formulas for success so that success becomes a routine, repeatable and flexible strategy for the business ( https://digitalfinancexperts.com/services/startup-business-plan/ ).

What is an SOP?

In simple words, SOP is a set of simple instructions performing and completing routine tasks to achieve the desired result. The SOP provides a detailed explanation of what needs to be done to ensure a process goes as planned and gets the expected result. This is how it is different from any procedural document that provides a high-level overview of the process in scope. A SOP is usually written by a manager with inputs from employees responsible for performing the specific task, to ensure uniform and quality output without leaving any gap for miscommunication or ambiguities. These are written for processes that a business has to ensure that its products are delivered consistently and consistently.

While businesses prefer to write SOP in a way that best suits their functionality, most organisations choose one of the below formats.

1. Step by step format

If the SOP is used to define straightforward routine tasks, this simple step by step instruction list format could be more than sufficient. The relevant procedures are described in easy to follow, step by step bullet points.

2. Checklists

This is one of the simplest ways to write a SOP. You can simply create a header to the specific procedure and add relevant checklist items that employees need to follow to perform the specific task or operation.

3. Hierarchical List

These are used when the procedures are more complex and demand additional info within each step. While a step by step SOP may consist of steps 1,2, and 3, hierarchical lists may consist of 1a, 1b, 2a, 2b, 2c, 3a etc.

4. Flowcharts

Flowcharts are used to write SOP when there are multiple outcomes involved at many points throughout the procedures.

How do SOPs influence decision-making?

When a business is growing or just starting, most decision-making lies with the CEO or the management team. As the business grows in size and complexity, this form of decision making might become complex and chaotic, as the management team might not be able to make the decision in the appropriate time frame or be involved in all aspects of the business. In such a case, SOP enables the governing process and employs it as an effective way to communicate changes to the business to all the employees.

Enable direct, transparent communication:

With improvements made to processes, the operating procedures might need to be updated frequently and each updating might demand the need for new training. Updating SOPs provides a method of communicating the changes made to all the employees directly, eliminating any gaps for miscommunications. SOPs thus provide a mechanism to implement needed changes, enhance training, define desired performance, and evaluate operational performance of employees. This results in improved operational efficiency, greater accountability, and increased safety.

Enhance critical decision making under stressful situations:

If you have to be answerable and be the point of contact for every aspect of running your business, things can turn very stressful. In such scenarios, decision making can sometimes go wrong, thus adversely affecting the business growth. By having an SOP in place, leaders can focus on critical decisions instead of routine ones, thus enhancing decision-making ability under stressful situations. SOP also provides leaders with a framework to conduct business safely and act as a guide to refer to while making important decisions daily.

Consistency on leadership:

SOP keeps a historical record of how, when and when certain procedures are implemented in the existing process. This provides a factual guide to refer to whenever an important decision is to be made. By understanding the current and past process, you will make the best choices for your business. SOPs, thus, enable consistency in the way you provide guidance as a leader by helping you evaluate more than what’s in the current picture and pushing you to think about how to move forward.

Enhanced accountability:

SOPs ( https://digitalfinancexperts.com/services/accounting-policies-and-procedures-manual/ ) help managers gauge employee performance based on defined metrics. In the absence of proper worker standards and metrics, it becomes a system of bias and personal opinions for measuring employee’s performance. Sop also makes it easier for managers to evaluate and see for themselves the challenges faced by employees at a given point in ensuring time. In addition, Sops’ also give employees enough transparency into the system of appraisal as it becomes evident to what is expected of them. This leads to consistent performance of the employees and hence better accountability in terms of responsibility.

If SOP is developed and implemented properly it gives the decision-makers a lot of freedom and flexibility required for their decision-making process. Even though it is time-consuming to write an SOP, it delivers too many benefits to let it pass off. If you are looking to set up an SOP for your business but unsure how to write them down and ensure compliance, DFX ( https://digitalfinancexperts.com/ ) can help guide you through the process and set your business on the right track. DFX comes with years of experience in business consulting solutions and drafting thoughtfully crafted and documented Standard Operating Procedures. The experts at DFX can custom design and implement SOPs for your business to suit all its requirements and help you unleash the business’s true potential by zero elimination of errors in the operation process that hamper growth.
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This release was published on openPR.