Policies - Oh Joy!
Let’s continue down the path of developing and fine-tuning your family farm management system – for clarity, consistency and hopefully improved relationships and financial performance. Just as written job descriptions and areas of responsibility and accountability are essential for providing clarity and expectations for team members, there are other areas in your family farm business where clarity is also essential -- Clearly defined and communicated policies and procedures.
- Policies provide general guidelines by which day-to-day operational decisions are made,
- Standard Operating Procedures (SOPs) are generally more specific and concentrate on day-to-day methods or approaches for performing specific tasks.
Jim! Why must you continually add more paperwork to this “management system”? Hey…I’m sensing a little sarcasm there? Ha! Remember a few months back when we first talked about a management system for your family business? No. I do. We defined a management system as “an organized approach to business to help ensure effective relationships, performance and long-term viability.” Assuming that’s still the objective, let’s continue…
So, by putting your policies and procedures IN WRITING, you help increase several benefits of policies:
- Agreement on key areas of your family business
- A valuable item for enhancing communication among all team members and other key stakeholders (partners, spouses, extended family, etc.)
- General improvement in operations and financial performance…assuming best practices are adopted as policies
- Improved job satisfaction, performance and teamwork
In our practice, we have experienced some of our clients adopt and implement policies that literally save them thousands of dollars with various strategic changes in policies and procedures.
Next week, we will begin by reviewing some common areas that generally benefit from policy documentation.