Understanding the Four P's: Policy, Process, Procedure, and Props in Business Systems (Full Transcript)

Speaker 1: We look at systems in terms of the four P's. Very basic. Policy. Policy is as simple or can be as simple as we will always do this, we will never do that. Can somebody give me a quick example of a policy in your business? I beg your pardon, sorry, say it again. Okay, we will respond within so many hours, days or whatever. We will always, if you can fit always into there and it still makes sense, I'm looking at a policy. Okay, policy could be as simple as if you're in sales you need a mobile phone. You always need to mobile phone. Okay, what's a never one? We will never do that. Can anyone just one example? Get a hand up so we don't all, yep. Okay, in our business we will never etc. Can you see how it works? It can be as simple as that. Now we know that policies can be great big heavy things with legislation and all the other things that come into them but most policies that affect the way we operate our business on a day-to-day basis are as simple as saying guys we don't do that, we will never do that. Okay, if we've got a policy that says we will always, let's pick one, we will always pay our creditors within the agreed terms. Good policy? Yep. What are some of the things that could go wrong if we applied it blindly? Yes, don't worry John, I've paid everyone today, I've paid all those bills. Yes, but there's no cash left, I haven't got any, you're not getting paid either and we've paid some bills that didn't have to be paid for in weeks in front, etc. etc. So just having a policy is not enough. We need a process that says here's what we do and we look all the bills, we go through, we check what cash flow we've got in out over the next etc. etc. We take these steps in the process and then we pay the right people and guess what? We pay ourselves as well. So that keeps everyone happy. So that's the process, the steps that guide us through implementing the policy. So policy is at the top, think of it like a big mobile we're building here, so there's policy up the top and these strings hanging down, there are processes that hang off that policy. Hanging off each of those steps in the process or some of those steps might be some procedure. Procedure is simply, well how do I do that? So every time you imagine somebody saying, yes John but you're telling me to do this in step three, how do I do that? The how do I bit is answered by procedure. So we want to have a procedure that says, yep, okay to do that open up MYOB or QuickBooks or whatever it is, go in there, click on this, print that, that's it. Okay, so it's as simple as that. That's the sort of thing we're trying to do. How could you have done that? You could have done it with Backpack, the same thing but it's really just working out what's the best way to get people to do it. We've got policy, process, procedure all dealt with. They're all straight words. What about props? They're all the little things that in effect prop it all up, hold it together. Props are the checklist, the forms, the standard letters, the sample letters, the yellow lines on the floor in the factory, mind your head, watch the step, stack the empty crates here please. All those little things that make the other bits work better. Policy, process, procedure. Stack the empty crates here. How much does that save us per week? What used to happen before, oh geez, we'd spend 20 minutes just telling the guys go and pick up all the empty crates and stack them up so that the bakers or whoever it is can take them away. You've seen that sort of thing, but now we've got a sign that says stack the empty crates here. That happens, so it saves time. Okay, we focus very, very clearly. There, it's only supposed to bring up process, you know. Anyway, process is the big word there, all right? A few little things don't translate, but process is the bit where we start. Why is process the bit where we start? Why don't we start with the props or the policy? What's process so important? It is the doing bit. It's the bit we do. That's the bit we say, hey, do this, follow this process. So we focus very clearly on that. None of this matters at all unless we communicate it effectively. You can have all the process and systems and everything else in the world you like, but if it's not communicated, if you don't manage through it, the other half of that, if you don't manage and communicate effectively what your system is, it's rubbish. It is nothing. It looks great on the trophy shelf. It looks terrible when people are trying to do it.