It is crucial to standardize processes in your company. See how an effective standard operating procedure can help you do this and improve your performance exponentially. You may be asking yourself why I talk about standardization when I often mention that all businesses operate in a highly uncertain environment.

Another issue is how to start standardizing when uncertainty leads to obsolescence, inapplicability, or the wrong way of doing things in the company. However, here, I want to talk about some subjects related to standardization or how you can standardize processes. So, it will become clear why you should standardize.

What Will I Cover Here?

• Why do you need to standardize processes in your company?
• A real-world example of a company without standard operating procedures? Learn what happened to a real company, losing a large part of its high margin because of the lack of standardized processes.
• Why are process variations problems for your small business? Why do process variations happen? What do you need to do to avoid such mistakes?
• How do work mistakes become a significant problem for your company? How do standardized processes not let the appearance of working errors?
• What is the biggest problem? Does the lack of quality assurance systems produce negative effects for your small business? How do quality systems impact uncertainty?
• What must you do before you start standardizing processes with standard operating procedures? Before you begin with standardization, implement one important and most critical step.
• Example of staff selection system as a part of your human resource department. What are the most critical processes for your staff selection system?
• How can you standardize processes with standard operating procedures? Example of the evaluation process for selecting new employees for your small business.
• What should you include in your standard operating procedure (SOP)? What are the most critical elements to incorporate into your standard operating procedures?
• The importance of SOP creation in the standardization process.

What are Standard Operating Procedures (SOP)

Definition and Purpose of an SOP

Standard Operating Procedures (SOP) are the step by step instructions on how to do a specific task. They are a reference guide for employees to ensure consistency and efficiency in doing the task.

You can see in the picture below where the SOPs are in the process hierarchy.

The main purpose of a standard operating procedure is to standardize processes within an organization. That means creating a way of doing things that everyone can replicate. So, everyone follows the same steps, uses the same methods, and gets the same desired outcome.

For example, as part of your human resource department, you may have a staff selection system to hire new employees for your business. This process involves several routine tasks such as job posting, resume screening, interviews, background checks, and final decision-making. By having an SOP for this process, you can ensure that all team members involved follow the same steps and criteria and have fair and efficient hiring practices.

Also having standard operating procedures is important for consistency and quality control in processes. With a standard way of doing things, it’s easier to spot deviations and take corrective actions.

Why Standard Operating Procedures

Why are standard operating procedures good for your business? What will you get if you standardize your processes with standard operating procedures?

Let’s take a look at the top reasons why implementing SOPs will benefit your organization.

1. Clarity and Consistency

One of the biggest benefits of standard operating procedures is that it brings clarity and consistency to your business. With a set of steps and guidelines, all team members will know how to do things, so consistency of execution. No more confusion and fewer errors means more efficiency and productivity.

In short, having a standard operating procedure for a task means everyone is on the same page about what to do and how to do it, so business runs smoothly.

2. Training and Onboarding

Standard operating procedures are a great training tool for new employees. With a standard operating procedure in place for a specific task, newbies can get up to speed on how things are done in the company without having to rely on their colleagues or managers. This saves time and resources for both the trainee and the trainer, resulting in smoother onboarding.

3. Minimising Risks

Standard operating procedures also minimize risks in your business. By having a set of guidelines and protocols in place, you can identify and address potential risks before they become bigger problems. This proactive approach will save your company from costly mistakes or legal implications later on.

4. Simplifying and Improving Business Processes

Another benefit of standard operating procedures is that it simplifies processes within your organization. By breaking down tasks into steps and eliminating unnecessary steps, standard operating procedures can improve efficiency and reduce bottlenecks in workflows. This means faster turnaround times and more productivity.

5. Improvement

Implementing standard operating procedures also means continuous improvement in your organization. By reviewing and updating procedures regularly, you can find areas for improvement and make changes as needed. This keeps your procedures current with changes in technology or industry standards.

Real-world Example of a Company Without Standard Operating Procedures

Here, I will share one of my experiences with a company related to standardization.

I have worked with a company where my task as a consultant was to help create systems, processes, and related procedures to increase their productivity and profitability. Initially, my task was to conduct interviews and record the current situation to see what exists, how it works, and the outputs of their current systems.

Reviewing the figures, I noticed that the current system brings large problems. Even the company’s average margin provides the potential for very high profitability. Still, this high profit margin does not provide what the entrepreneur wants. Somewhere over 50% margin brings only 8% profit after deducting material costs and employees.

Typically, the entrepreneur has noted this from the records in the books. Still, the problem is not high material costs, inventory, or fixed costs despite the sales volume. The problem is because of the business processes or the mechanics pursued through those processes and human activities.

Related: 4 Steps Business Idea Generation Process in Entrepreneurship

Process Variations as Problem

While recording the current situation, one of the first discoveries was significant variations of the required time for making one of its main products. On the other side, these products bring the most important income. The survival of the company will depend on this income. There were cases where the same product, produced with the same materials, was delivered by the same suppliers to be produced at different times. Sometimes, they produce the product in ten days. But, sometimes, the next order realization time was 24 days, and sometimes months.

Now, the question is, why does this happen? We have the same process, the same raw materials, the same suppliers, and the same employees. And still, production time varies. Higher production time simultaneously increases working hours, so they quickly start eating that margin of over 50%. Some customers start canceling their orders because the contract explicitly defines when the product is totally functional. Again, the company is losing the advantage of a high-level margin. This is a serious problem.

Standard operating procedures (SOPs) can help reduce these variations by including more detailed steps and information such as who, when, and where. This granular and specific approach ensures consistency and conformity with company or industry standards.

Related: Tips On How To Safeguard Your Interests When Your Business Is Under Audit

Work Mistakes as a Problem

Another interesting issue from the 12 discovered at the recording stage was the production errors. Because of that, the company has more considerable production time.

So, the product did not comply with the standards for which the customer pays. Here, the delivery process leads to rejection by the customer. This means returning to the plant for re-processing, saving what can be saved, and integrating new elements as raw materials. Again, this eats a large part of the current margin. I have noticed that about 23% of the margin will purchase additional raw materials. The reason for this is because of the non-quality products produced. This leads to disastrous results, although the potential is significant initially. The errors bring a loss of customers who will never want to do a job with the company again.

Implementing standard operating procedures is crucial in preventing such work mistakes and ensuring regulatory compliance. SOPs help maintain industry standards, minimize miscommunication, and reduce the likelihood of production errors.

The Biggest Problem: The Lack of Quality Systems and Regulatory Compliance

This company’s biggest problem is the lack of quality systems with proper standard procedures and SOP documents that constantly ensure highly productive work completion.

Regarding uncertainty, the only uncertain part of the chain is suppliers. This is because they can deliver raw materials with delays or without the proper level of quality. Everything else remains as delays in production, variable employee productivity, equipment downtime, and work quality. All these things can be managed directly by the company. But, it doesn’t mean that you don’t need to provide robust processes for procuring raw materials or supplier delivery delays. It means that you must include suppliers in one robust process that will provide better delivery and predictability.

Before You Start to Standardize Processes, Build All Necessary Systems for SOP Creation

If you want to achieve your goals, you need systems. Systems will ensure constant production with the highest possible quality at all times. The systems are composed of various subsystems or processes that do the work. The processes describe all standardized activities that must be done to produce standardized outcomes.

Edwards Deming, one of the most prominent masterminds related to quality management, has said that “the first step in any organization is to draw a flow diagram to show how each component depends on others. Then everyone may understand what their job is. If people do not see the process, they cannot improve it.”

You can start drawing the map or the flowchart by hand or use some simple or more sophisticated software. We want to put everything on paper and see the big picture, especially connectivity and interrelations between different elements inside the process.

For instance, let’s take the system for staff selection and provide staff with the proper skills and knowledge. This system is part of a human resource department. This system will have the following processes:

• The process to attract staff will always allow you to have the opportunity to hire a quality workforce.
• The evaluation process for staff attracted to ensure that you will not have the wrong employment.
• The selection process to select the best-suited staff. This SoP ensures that everyone will be ranked according to their actual capabilities or potential for your company’s needs.
• Employment process that will provide a fast and efficient formalization of employment of selected persons and
• The new employee training process ensures quick integration of new employees into the company’s work.

You will have many innovation opportunities if you have processes in your company. Also, when you standardize processes, this opportunity will be much higher. But that is not all. The standardized process with the appropriate standard operating procedures will give you opportunities for continuous process improvement.

Before standardizing processes, it is crucial to build the necessary systems. Selecting the appropriate SOP format is essential to ensure that these systems function effectively and support your goals.

Standardize Processes With Standard Operating Procedure

As you can see, a system will have multiple processes, each of which will have a particular purpose. If you want these processes to be functional, you must create SOPs and have more procedures for each process. So you can ensure the process output is the same as expected. For example, the evaluation process for potential employees can have the following procedures:

• This is the standard operating procedure for analyzing an individual’s previous experience. This SoP is used to develop certain figures related to proper skills that a potential employee can have.
• Standard operating procedure for testing individuals to check the ability of potential employees. These tests can be made through standardized tests or the standardized practical doing of some work.
• SoP is used to interview individuals to estimate their abilities further.
• A standard operating procedure for contacting previous employers is to ensure that there aren’t some problematic behaviors earlier.
• SoP for assessing and ranking prospective staff. This is the output and will have a priority list of potential employees for your company.

How to Write Standard Operating Procedures: Step-by-Step Instructions

1. Get Ready to Write an SOP

What are your objectives for the SOP document?

Before you start writing your standard operating procedure (SOP), you need to define your objectives. Ask yourself what this is for and what it will do for you. This will help you make sure you write a clear, concise, and effective SOP.

Some examples of objectives for a SOP are:

• Standardization: SOP documents will ensure consistency within a company or organization.
• Time and resource-saving: A standard operating procedure will save time and resources by outlining the best way to do something.
• Training new staff: An SOP can be used as a training tool for new staff to learn the steps involved in doing something.
• Quality control: An SOP will outline the steps to ensure quality.
• Simplifying communication: An SOP document will be a reference guide for staff, so they don’t have to ask or be confused about how to do something.
• Compliance: Many industries have strict regulations and guidelines to follow. SOP documents will ensure those standards are met.
• Error reduction: An SOP document will reduce the chance of mistakes by outlining each step of a process.
• Identifying areas for improvement: As you review and update your SOP documents regularly, you may find ways to improve processes and make them more efficient.

Now that you know what your objectives are for a standard operating procedure, you can write an SOP document that achieves those objectives. Remember to think of all stakeholders when writing, use simple and concise language, and use diagrams or flowcharts to explain complex processes. Also, include any safety precautions, such as health and safety warnings or regulatory requirements, in your SOP document.

Who are the Stakeholders and Creators?

Before you start writing standard operating procedures you must determine who the stakeholders are and who will create SOP documents. Stakeholders can be employees, managers, customers or external regulatory bodies.

Thinking of each stakeholder’s perspective will help you tailor your SOP document to their needs and make sure you include all the information you need. It’s also important to involve relevant stakeholders in the creation process so they can provide input and review the document for accuracy.

Who is the End-User

Another thing to consider when you write standard operating procedures is the end-user. So when you write a standard operating procedure it’s important to think of your audience.

This could be an employee who has to follow the procedures, a manager who manages the process for which you are creating an SOP document or a regulatory body that will audit your company on safety regulations, health regulations, or specific regulatory standards.

When it comes to your employees, you can use the following question to define the end users before you start writing SOPs:

• Who will use this document?
• What level of knowledge do they have of the process?
• Are they already familiar with the procedures?
• Do they already know the terminology used in the specific SOP?

Know your end user. That’s key to SOP writing. That way the procedures are clear and easy to follow for everyone involved.

2. Write a Standard Operating Procedure Document

Gather All Information Required

The first step in writing an SOP is to gather all the information about the process you’re documenting. This can involve observing the current process, interviewing subject matter experts, reviewing existing documents, or researching industry best practices.

Make sure to gather all the details, including the steps involved, equipment/tools needed, safety precautions and potential risks/hazards.

Structure the Information Collected

Once you have all the info, structure it in a clear and logical way. This will make your SOP easy to follow and understand for anyone who will use it.

Here are some tips to structure your info:

1. Use headings and subheadings to break up the content into smaller chunks.
2. Number or label each step to make it easy to follow and refer back to.
3. Include visuals like diagrams, screenshots, or videos to clarify complex steps or concepts.
4. Use bullet points or lists for procedures with multiple options or variations.
5. Keep the formatting consistent throughout the document.

Write Step by Step Instructions

Start by outlining the steps involved in the process using bullet points or numbered lists. Then, write more detailed instructions for each step, including procedures and techniques.

Write your SOP and include step-by-step instructions, detailed steps, specific tasks, and workflows.

Choose an SOP Format (e.g., Hierarchical, Flowchart, Checklist, Video)

Use a template, such as a step-by-step written format, hierarchical format, flowchart format, checklist format, or video format.

Step by step written format is the most common format for SOPs as it’s clear and concise. For example you can start each step with a verb (e.g. “Click”, “Select”, “Enter”) and then the instructions on what to do.

A hierarchical format is useful for more complex processes as it breaks down each step into sub-steps and gives a visual overview of the whole process. A hierarchical format is useful for complex processes with multiple sub-steps or tasks. This hierarchical steps format is great for training new employees or when dealing with intricate procedures.

Flowchart format is a graphical representation of the steps in a process using symbols and arrows to show the flow of information or tasks.

Simply, flowchart format shows the sequence of steps in a process, makes it easy to follow and is good for visually oriented people, and can help identify potential bottlenecks or gaps in the process.

The checklist format is a simple and effective way to make sure all tasks are done in order. It’s good for repetitive procedures and can also be a reference guide for more experienced employees.

The video format can help demonstrate physical procedures or techniques that are hard to explain through written instructions. It allows for visual cues and can save time by condensing a complex process into a shorter video.

Whatever format you choose, find the one that works for you and your team. Try out different formats to see which one boosts productivity. Remember, the purpose of these formats is not only to have clear instructions but also to engage and motivate your team to perform their tasks effectively.

Remember, that you can also use combination of these different SOP formats inside your SOP writing process. It depends on your business needs.

Define the Scope and Format of the SOP

Define the scope of the SOP based on who will be using it, what equipment or materials are needed, and any other factors that may impact the task or process.

Although they can be a collection of different activities, each SOP document will be a single standard. These SOPs will have:

• procedure’s objectives,
• expected outcomes,
• steps to take,
• expectations of those steps,
• what to measure and
• who is responsible for it.

Make sure to include step-by-step instructions for clarity. The standard operating procedure documents can also include attachments of drawings, images, videos, or anything related to how to implement them.

Standards to be included in your SOP

Here, I discuss company procedures. In addition to these standards, there should also be standards for product and service quality, regulatory requirements, safety standards, health standards, etc. These standards will meet the customer’s expectations on functionality, color, shape, size, speed, etc., and any regulatory requirements that your company must comply with.

You can create standards that define the raw material quality and what your suppliers need to do to meet those standards. On the other hand, all standard operating procedure documents must support quality standards. This means the procedures will be based on the quality standards.

Other standards like specifications will provide technical information on how to operate specific equipment. Processing methods will include for example welding, cropping, scraping, dimensions and tolerances, temperature, pressure, time etc. But that’s a different topic.

Choose Standard Operating Procedure Document Format

We talked about the SOP format (step-by-step, hierarchical, etc.) previously. But here, you need to decide on a medium format. You can use the following SOP document formats:

• Microsoft Word documents or Google Docs are the most common formats for SOPs. They are easy to edit and format and compatible with other software your company uses.
• PDF documents provide a static, non-editable version of the SOP document. Good for sharing with others or printing out physical copies.
• HTML SOP documents allow online access and interactive elements like hyperlinks and videos. Good for training purposes.

3. Your Standard Operating Procedure Templates

Once you’ve chosen your format, you need to create a template for your SOPs. This will ensure consistency and make it easier for employees to follow along.

Your template should include:

SOP Title Page

SOP title page will contain the name of the SOP, SOP identification number, date created, team or department information, and revision history to keep track of changes to the SOP over time.

For example, if you write standard operating procedure document for maintaining computer systems, this will be the title of the document.

Table of Contents

A detailed table of contents so readers can navigate the document easily.

Introduction

Overview of the purpose and scope of the standard operating procedure.

Process Map

A visual representation of the process to help employees know where the task is in the process and how it relates to previous and next tasks in the process.

Procedure Steps

The main body of the document should outline each step of the task with detailed instructions, diagrams, or images.

Checklists and Forms

If your SOP requires specific actions or forms to be completed, include them here.

Quality Control Measures and Regulatory Requirements

Define all quality control measures and requirements or standards such as safety considerations in your standard operating procedure document.

References and Resources

Include any references or resources used to create the SOP.

Glossary of Terms

If your SOP uses technical or industry-specific language, include a glossary.

Appendix

Add any additional information or supporting documents in the Appendix section of your standard operating procedure document.

When creating an SOP, you need a template to ensure consistency and make it easy for employees to follow along. A good template should have all the elements to help current and new employees understand and implement the procedures.

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4. Review and Revise the SOP

Once you have your SOP document written, you must review and refine it. Remember even the most mundane procedures can go off the rails. Reviewing after you write SOPs will ensure they are current and reflect changes in the industry or within your company.

Is that particular SOP working as expected? Are the chosen SOP templates working as intended with the procedures? Are there safety issues?

In addition to regular reviews, tracking deviations from the procedures is key. These deviations should be noted and analyzed to see if they were human error or if there are underlying issues with the procedures. You can improve your SOPs and prevent future errors by identifying these deviations.

Proofread, Test, Revise: The Cycle

As with any written document, you need to proof and test your SOPs before you finalize them. This means having people from different backgrounds review the content for accuracy and clarity. It may also mean doing a trial run or simulation of the procedures in the SOP.

Get feedback from all stakeholders, employees, and managers. The goal is to make the SOP easy to follow and achieve the intended outcome.

Once you have feedback, you can make revisions to improve the clarity and effectiveness of the SOP. This cycle allows for continuous improvement and ensures your business always has current and effective standard operating procedures.

Train Your End-Users

Writing the SOP is just the first step. But you need to train your team on the new SOP so they understand and follow the process. Training your end-users on the procedures in the document is critical. This should include a walk through of each step, an explanation of why it’s necessary and any safety guidelines.

Training ensures all employees know the right procedures, improves task consistency and reduces errors or accidents from incorrect implementation of the SOP. So with training, you will ensure the new SOP you wrote makes sense to anyone who needs it, regardless of their background.

It’s recommended to have someone assigned to do the training and track who has been trained. Refresher courses should also be done regularly to keep everyone up to date with SOP changes or updates.

Use SOP Software

With technology advancing, software solutions are available to streamline and automate standard operating procedures. From simple checklists to complex workflow management tools.

SOP software can make it easier for employees to access and follow the procedures. It also makes it easier to track completion and update the SOP.

Some popular SOP software options are Process Street, Tallyfy, and SweetProcess. These platforms offer features such as customizable templates, task assignments, and real-time collaboration.

5. Finalize and Get SOPs Into Your Workflow

Now that you have your SOPs created and approved, you need to get them into your company’s workflow. This means sharing the SOPs with all relevant team members, making sure they know their roles and responsibilities, and setting up processes for regular reviews and updates.

SOPs should be available to all team members through a central document management system so everyone has access to the latest version and can refer to them as needed.

Implement and Review Regularly

Now you need to implement the new SOP and review it regularly to make sure it’s working and efficient. This means getting feedback from team members on the usability and effectiveness of the SOP and updating as your company changes.

Also, you need to set up a system to monitor SOP usage. This could be regular audits or evaluations to make sure team members are following the steps in the SOPs.

As your company changes and grows, so should your SOPs. You need to review and update your SOPs regularly to reflect changes in processes or technology within your company.

Storing and Sharing Standard Operating Procedures and Tools to Help

Now that you have developed and refined your SOPs you need to have a central location where team members can access them. You need to make sure employees have access to the same SOP documentation and that it’s in a central database so there’s no confusion and consistency across the company.

For example, I have helped some of my clients to integrate their SOPs into Google Sites as an Intranet solution.

Also, I’ve been using Notion for this purpose for almost several years. If you choose to use Notion, you can even find great SOP templates you can customize for your small business needs.

Also, you can use Google Drive, iCloud, Dropbox or Microsoft OneDrive where you can create specific folders with different user access levels for your SOP documentation. Or you could use existing document management system if you already have one.

You also need tools to help with creating and updating SOPs. This could be templates for different processes, checklists for reviewing existing SOPs and software for collaboration and version control.