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FMI Quarterly/March 2015/March 1, 2015

SOPs Don’t Make It So

People_happy_imageCreate buy-in for successful implementation and process improvement.

It is a story that’s as old as time. Contractors will tell you all about their processes, show you the 10-pound binder that sits on everyone’s desk, and immediately ask, “Why aren’t people following them?” After seeing countless examples of this exact situation, here are a few of the reasons why “no one is following them” and some ideas on how to address this challenge.

In the Beginning…

Example Scenario: In many instances, senior operations leaders create the processes themselves. There may be several reasons for this: an overconfidence that they alone know the one best way, including other people would take too much time, they are the only ones that know how to use a flow chart software like Visio, they overestimate how simple it is, or believe that any process is better than no process. Inevitably, this DIY beginning leads to a lack of buy-in from other stakeholders.

Recommendation: Capitalize on the combined experience of your people. If you stop and think about it, most organizations that employ 100-200 people collectively have thousands of years of construction experience. Applying much experience to any problem will yield better solutions than any one person alone can generate. Companies need to bring together a small group of people (six to 10) to build a “proven best practice” and include representatives from all levels of the organization who have influence on the process (estimators, project managers, superintendents, foremen, equipment managers, safety, etc.). Each person helping to create the process brings many years of experience and a different perspective on the situation. What might make perfect sense to a project manager might be truly impossible for someone else to grasp. Getting it right takes discussions and usually some level of conflict. The combined wisdom will lead to better processes, improved employee buy-in and faster results. Sometimes a collective, participative approach to solutions development is called “getting fingerprints on the murder weapon,” resulting in the participants having vested interest in a successful solution implementation.

Missing Pieces

Example Scenario: Most SOP manuals contain flow charts, descriptions of the process, examples of documents and screenshots of key inputs or outputs. These manuals attempt to be clearly instructing a person on WHAT he or she should do, but rarely does an SOP manual explain WHY someone should follow the process, WHEN he or she should start/finish the process or clearly state when using the process is mandatory.

Recommendation: The first step in creating SOPs based on “proven best practice” should be a discussion of what the process is trying to accomplish — what is it trying to solve for. The group of people creating the process should identify a list of objectives that clearly articulate what the results of the process should look like, feel like and accomplish. Starting with this step ensures that everyone is working toward the same goal and allows the participants to determine whether, when the process is followed, it actually works.

Defining criteria for following the process is a good second step. In reality, there can be good reasons why following a process is not needed or that doing so could even be counterproductive. For example, following an elaborate pre-job planning process for a one-day service call would not be realistic — it would take longer to follow the process than it would to do the project itself. Often, in the absence of clear criteria, people find excuses for why they don’t have to follow the official process. A typical comment in this situation would be, “My job is too big/small/fast/slow for this process.” To overcome this challenge, clearly define when the process is mandatory. Criteria should be defined by something measurable like labor hours, revenues or schedule days. For example, criteria for following the pre-job planning process might be, “All projects with 1,000 labor hours or more,” “All projects over $500K” or “All projects two weeks or longer.” Setting clear criteria helps eliminate mistakes and excuses while also allowing for common sense and accountability.

As a third step, specify when to start the process; do not leave this to common sense. The trigger to start pre-job planning might be “Upon project award as determined by operations manager.” This step ensures that people clearly know when they are allowed/expected to begin spending time or resources on the process. Without it, operations may not get the right people involved until it is too late.

Performance, Not Process, Is the Proof

Example Scenario: People are busy. Once a process is created, there tends to be an urgency to get it implemented overnight. “We created this process so, from now on, follow it.” The avoidable risk here is — What if the process doesn’t actually work? What if it doesn’t actually achieve any positive results? In this situation the unworkable process, the people who created it, and the managers mandating its use will quickly lose credibility, and the process will go nowhere.

Recommendation: Once a process is created, try it out first. Follow the process on only a few projects to see if it actually achieves the stated objectives. Gather input from the “beta test” participants and see if they have ideas that would make the process faster, better or more effective. Only after you can prove the process works, that it is the “one best way.” should efforts be made to make it “mandatory” (for projects that fit the criteria, of course). Incentives for following the process and disciplinary actions for not following the process should only be applied after the process is proven to work.

Changing Behaviors

Example Scenario: In a typical example, new SOPs are introduced to employees too quickly. The expectation is that these employees will instantly see the value of following the process and do so simply because their manager told them to. At best, this might work for a short period of time. Soon, people become skeptical of the value of the process and/or don’t see any tangible difference in the results.

Recommendation: If you want people to develop a new skill or behavior, they will need some help. People usually crawl before they walk and walk before they run. In fact, count on it.

Make sure there is an internal “expert” on the process who takes the time to explain how the process was created, what it is intended to accomplish, and why it is better than some other way. The person training them should be good at answering questions from new participants and dealing with the associated skepticism. This person should “walk with them” while they try it out for the first time, making sure both the process activities are followed and the objectives of the process are achieved.

What Gets Measured Matters

Example Scenario: In average situations, when you ask a senior manager, “How often does the organization follow your SOPs and how do you know?” — silence usually follows. A follow-up question might be “Do the SOPs, actually work, and how do you know?” — again, followed by an uncomfortable pause. These are fair questions that should have answers.

Recommendation: Once a “best practice” has been established based on chosen criteria, track how often the process should be followed (how many projects meet the criteria) versus how often the process is actually followed on a monthly basis. For example, if the company mobilized on four projects that met the criteria for pre-job planning, and if only three of them actually completed the process, you would have a 75% completion rate for the month. Tracking this over time will allow managers to spot trends (positive or negative ones), diagnose problems and reinforce successes.

By implementing best practices and using them on a regular basis, your firm can expect better and more consistent results. Be sure to track estimated gross margins versus actual gross margins on closed projects every month. As projects that follow the best practices begin to close, you should see that they tend to outperform the projects that did not follow the processes. It’s no mystery that having defined expectations and following proven processes will correlate with better results.

Keep Them Current

Example Scenario: Creating an SOP manual is usually a big undertaking, and distributing manuals companywide is expensive, less so if done electronically. Once distribution and deployment has been accomplished, there are usually strong organizational and financial reasons to leave it alone for a while (even if there are tweaks, changes and updates that should be made). After some time, what starts as a need to make small “tweaks” grows into a need to make a complete overhaul. The SOP manual becomes an archive of “how we used to do things.”

Recommendation: It is important to look at processes as living things that can, should and will change over time. Assign responsibility for individual processes to the team members who created the process in the first place. From the outset, make sure they understand that the process will need to be updated anytime there is a way to make it better. At the very least, each “mandatory” process should be critically evaluated on a quarterly basis and updated as needed. Have the team update the process, the process tools, examples and training materials to reflect the improvements to the process.

Ethan Cowles is a principal with FMI Corporation. He can be reached at 303.398.7276 or via email at ecowles@fminet.com.

 

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