Controlling through policies and procedures

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Batanai Kamunyaru

In building, understanding the structures before starting is of essence, otherwise it is better not to start. The same applies to organisations and businesses, if you do not have structures, it is better not to start unless if you have no ambitions for profit and growth. Starting a business without the right structures is very unhealthy, as it is difficult to then try to implement the structures later. Sometimes, trying to correct a building that was constructed without a ‘structure’ means demolishing the existing and start again – by the same token, some businesses must start afresh.

Businesswise, things don’t go wrong, but they start wrong. Several businesses are started on the wrong footing, which restrains them from being profitable and grow. Imposing structure on how the business is run makes it possible to seize control of every part of the business – making it easier to drive towards profitability and growth. It is a business with good structures that dominate the ones without structures or with the wrong structures. In a business which is run without structures, it is difficult to understand anything, it is confusion at all levels – and this is mainly experienced in start-ups and SMEs.

This topic will explore policies and procedures for businesses, and how they help in driving towards profitability and growth. The BusiControlling through policies and procedures ness Dictionary expresses policies as principles, rules, and guidelines formulated or adopted by an organisation to reach its long-term goals. Furthermore, the BD describes procedures as specific methods employed to express policies in action in day-to-day operations of the organisation. Together, policies and procedures are formulated to influence and determine decisions and actions made for the organisation to achieve its long-term goals and objectives. All activities must take place within the boundaries outlined by the policies and procedures to ensure uniformity and a standard way of doing things.

It is of paramount importance that every organisation have policies and procedures as they are the ones that govern and point the business towards the achievement of its goals and objectives. Unfortunately, most start-ups and SMEs ignore this important phase, and choose to quickly get into operations. Within a short space of time, the business you thought you were in control of now controls you! It is structures that control a business and not an individual. If a business requires the control of one individual to move forward, then it is not a business, but a job. When you have started the business, let the policies and procedures run it, for they respect and fear no man.

Businesses and organisations that fail normally fail on structure! Every part of the business that is violated in policy and structure tends to suffer and sometimes pull the whole organisation down. When you have started a business and you have ambitions to be profitable and grow but do not know how to set up systems and structures, engage the experts to do the job for you. The cost of the expert prove to be cheaper than the cost of having no systems and structures. The admired business that do well do so on structure!

SMEs and startups mainly suffer because the founder wants to do all by himself or herself and finds it difficult to let go – and that is caused by lack of policies and procedures that set the tone of the organisation and puts controls in place to ensure that every part of the business is taken care of. The biggest challenge for SMEs and startups is on financial control policies and procedures, the stumbling block why they remain small and end-up being less profitable.

Due to absence of policies and procedures on financial management, the business owner tries to control every aspect to do with money, even if they lack skills in the area. And, because financial management is taxing, the vision suffers as all concentration is shifted towards the movement of money.

However, as a business owner, to safeguard against yourself trying to control finances and accountability, a great place to start is having a well documented policy and procedure manual on every aspect of money movement, thus from who commit’s the business funds to what is considered apt and reasonable types of expenses. Anything that falls out of the policies and procedures guidelines are the only issues that should be tackled by the owner (shareholder), otherwise if it is within the confines of the policies and procedures management should deal with it.

Allowing policies and procedures to control the business frees time to focus on the future of the organisation. Obviously, the policies and procedures will be improved as the business moves forward and due to the changes of the environment.

Therefore, the financial policies and procedures serve as a framework of guidelines when making decisions regarding the financial system in the business, covering all aspects to do with money movement. Good financial policies and procedures in the business would help in stabilising the finances of the business and ensure that financial operations of the business are consistent and stable.

It is a fact that well written and good financial policies would assist in resolving any financial related violations and complications in the business. In the presence of good financial policies, business owners would feel secure and confident of their business – allowing them to focus on business profitability and expansion. When focus is on business profitability and growth, the policies also helps in identifying and capitalising resource allocation decisions. These policies should always be present regardless of how much the finance team is trusted. Trust is not meant to replace policies and procedures but cementing them. When you operate without financial policies and procedures, it is a matter of time before you regret such a decision. Policies and procedures are powerful more than the money – as you can make more with the right policies and procedures!

Human Resources Management is another important part of the business that should be well covered by policies and procedures, as it may make or break the business. Areas to be covered by the HR policy and procedure manual varies with organisations, but more than eight percent of the policies strive to address the same issues including personnel practices (recruitments, leave, holidays, performance appraisals, promotions, supervision, training, etc), complaints and disputes, conflict resolutions, confidentiality, communication, delegation and many others. These HR policies form a basis for treating all employees fairly and equally.

Generally, the range of HR policies is endless, and each business should have policies in line with its goals and objectives. Furthermore, policies are designed depending on the revealed behavior that needs to be managed. The key instrument under the HR policies and procedures is the code of conduct. The code of conduct is the one that sets out the standards of behavior expected from employees and covers common issues such as dress code, punctuality, use of company property or mobile phones usage.

By expressing unacceptable behavior in writing, through a policy, and educating employees on business values, the business will be in a good position to manage undesirable conduct in the workplace – as and when it arises and make strides towards profitable growth.

You might have started a business and you do not have policies and procedures to drive towards profitability and growth, however, it is very easy to start, you may start by simply looking at what other organisations have done. Copy some of the policies and procedures, as behavior of employees is generally the same regardless of industry or company. Also, with the presence of Google search engine, you may look for online templates that you can download and use to tailor make your own policies to suit your goals and objectives. Once you have crafted the policies, bind them into a manual that you may keep referring to whenever you need to understand what decision to make or how to make it, regarding employee conduct.

Make the policies and procedures be known to every employee of the organisation so that they would know how their matters will be handled if they are in violation and know how they are expected to behave within and outside the business. Assuming every employee knows how they are expected to behave is risky, as not every employee may know! Several businesses operate under general beliefs regarding integrity and honesty but relying on such general beliefs lead to confusion and misunderstandings.

Strong company policies will ensure that from business executives to the men on the shop floor they have a basis upon which to conduct company business. It is a must that every employee complies with the laid-out policies and procedures, otherwise failure to do so will be violation and it comes with consequences.

Ken Evans says, “While it may not be possible to eliminate the risk of fraud altogether, a company can at least identify it early and minimize its damage with proper planning, policies and procedures.” Considering this great teaching, it is important to have policies and procedures in all companies for continued profitability and growth.

Batanai Kamunyaru is a business writer, speaker and coach. He can be contacted on bat.kamunyaru@ gmail.com or +263 718 852 489.