Importance of SOPs and processes

Blog

The Importance of SOPs: How SOPs Impact ROI

Disorganized processes are one of the top 10 employee pain points, with a whopping 67% of employees saying their company’s broken processes prevent them from maximizing their potential. Bottom line? SOPs are important and essential in your business. Here's why

Table of Contents

Share

You know standard operating procedures (SOPs) are important. But exactly how important?

Research by McKinsey & Company reveals that organizations with clearly defined SOPs outperform their competitors by 31%.

SOPs not only streamline processes but also ensure consistency and quality across all levels of an organization, empowering businesses to expand confidently while maintaining control. SOPs transform complexity into clarity, making them indispensable in the pursuit of sustainable growth and competitive advantage.

Let explore the importance of SOPs and why you should prioritize them in your business.

The No 1. purpose of SOPs💰

Disorganized processes are one of the top 10 employee pain points, with a whopping 67% of employees saying their company’s broken processes prevent them from maximizing their potential.

The outcome of broken processes?

A drop in productivity and revenue, unengaged teams, and a high employee turnover. 👎

That’s why, whether you’re onboarding new hires or tracking deliverables, your SOPs need to radiate simplicity so your teams just get it.

Ready? Let’s go.

Category_Productivity_Teal

Calculate your ROI

When you’re choosing a documentation & training solution for your team, you want to know what return you can expect.

SOP statistics you need to know

Data entry errors in procurement, supply chain, and other areas cost businesses over $600 billion each year. source: Data Warehouse Institute

If that doesn’t prove that SOPs are important and make a significant impact on your business, then consider this;

Knowledge workers spend on average 50% of their time creating and preparing documents. Without a document management strategy and a reliable system, 25% of these documents will end up being lost.

And yet;

  • 45% of small-sized businesses still rely on traditional paper-based document management.
  • And According to a Forrester report commissioned by Adobe, a staggering 97% of organizations had minimal or no digital document processes

7 Reasons SOPs are important in your business

Standard Operating Procedures (SOPs) are the backbone of scalability for growing businesses. 

Here’s why you need to be prioritizing them in your business.

  • #1: SOPs save on employee turnover
  • #2: SOPs maximize time cost savings
  • #3: SOPs boost employee value and productivity. By providing clear instructions, SOPs reduce the time needed to train employees and help them complete tasks more quickly and effectively.
  • #4 SOPs ensure consistency and quality control: SOPs ensure that tasks are performed consistently and correctly, leading to uniformity in product or service quality.
  • #5 SOPs create safety and compliance: SOPs help in adhering to industry regulations and maintaining safety standards, reducing the risk of workplace accidents and legal issues.
  • #6 SOPs provide a baseline for performance measurement: SOPs provide a baseline that can be used for evaluating employee performance and identifying areas for improvement. 
  • #7 SOPs provide scalability and adaptability: Well-documented SOPs facilitate scaling operations and adapting processes in response to growth or changes in the environment. They provide a means for continuous improvement. 

 

And did you know SOPs help maintain a consistent brand too?
Your brand is one of the most valuable assets your business has, and it’s essential to protect it. Providing clear SOPs around your brand guidelines can advise your staff on areas such as the correct use of logos, colors, and fonts. You can also include policies for how they should correspond with those outside the business, guidelines for email formatting, and sticking to the brand tone of voice in all communications.

4 Ways SOPs impact your business

What is a SOP? Standard Operating Procedures (SOPs) are the must-have set of instructions that outline exactly how to run a task. Whether you’re showing how to build job descriptions or manage entire projects, a clear SOP can help unify tasks so outcomes are the same across every team.

It sounds simple: write a set of instructions that explain how to follow a process.

But every business leader knows that the importance of SOPs goes way further.

A truly great Standard Operating Procedure shouldn’t only explain a process, it also needs to be engaging, simple to follow, and make employees super excited about getting work done. Because when it’s done right, SOPs can have a huge impact on your ROI.

Here are a few ways a great SOP can impact your business for the better:

1. SOPs fix a leaky bucket

Leaky Bucket on Whale blog

When a business grows and you have nothing documented, information is transferred verbally and often sporadically. This means that knowledge is often lost in the process. After some time, so much information is lost, that, just like a leaky bucket, it becomes detrimental to the business.

SOPs document essential processes, preventing knowledge loss due to employee turnover and ensuring that valuable information is retained within the organization.

2. SOPs give you the competitive edge

Documenting processes and SOPs can help you deliver a more consistent and seamless customer experience. which can give you a competitive edge in the marketplace.

3. SOPs boost efficiency and productivity

By documenting your processes and SOPs, you can identify inefficiencies and areas for improvement. This can help you streamline your operations and increase productivity, which can give you an edge over competitors who may not have optimized their processes.

Productivity is also the key to boosting revenue, and with simple SOPs your employees will find the following tasks super easy.

4. SOPs up employee engagement

With 51% of employees feeling unengaged at work (Gallup), creating processes your teams want to engage with should be your #1 priority. It’s up to business leaders to create experiences that fully engage their employees – and how you create and share SOPs plays a big part in that.

Check out our Ultimate Guide to SOP & Process Documentation for all 12 reasons.

FAQ's

What is the difference between an SOP and a policy?

Standard Operating Procedures (SOPs) and policies are both essential components of an organization’s framework, but they serve distinct functions and are used in different contexts:

Standard Operating Procedures (SOPs)

  • Purpose: SOPs provide step-by-step instructions on how to perform specific tasks or operations. They are designed to ensure consistency and efficiency in the execution of these tasks.
  • Content: They are highly detailed and describe the exact processes and methods to be followed.
  • Focus: SOPs are focused on the operational level, detailing the "how" of processes.
  • Flexibility: Generally, SOPs are more flexible and can be updated as procedures change or improve over time.
  • Usage: Used by employees who perform specific tasks to ensure that activities are carried out consistently and correctly.

Policies

  • Purpose: Policies set out the rules, guidelines, and principles that govern the organization. They reflect the organization’s culture, ethics, and expectations.
  • Content: They are broader and less detailed than SOPs, outlining general principles rather than specific steps.
  • Focus: Policies focus on the organizational level, detailing the "what" and "why" behind company decisions and practices.
  • Flexibility: Policies are generally more stable and undergo changes less frequently, as they are rooted in the core values and strategic goals of the organization.
  • Usage: Used by all members of the organization to understand the boundaries and expectations within which they should operate.

In essence, policies provide the framework and rationale for the workplace environment, while SOPs offer the practical steps needed to operate within that framework.

How do SOPs contribute to employee training and development?

SOPs provide a clear framework for training new employees, ensuring they understand their roles and responsibilities from the start. This standardized training approach reduces errors, speeds up the onboarding process, and enhances employee confidence.

Can SOPs impact the scalability of a business? How?

Yes, SOPs are critical for scalability.

They allow businesses to replicate successful practices across new teams and locations with minimal variance. This standardization ensures that quality remains consistent as the business grows, facilitating smoother expansions and integrations.

Test our free your readiness to scale and we’ll send you a report on how you can scale using SOPs related to your results.

What are the risks of not implementing SOPs in a business?

Without SOPs, businesses risk inconsistencies in service delivery, higher error rates, and inefficiencies. This can lead to decreased customer satisfaction, increased operational costs, and a slower response to market changes.

Not to mention the general feeling of being overwhelmed that you and your team members are likely to feel. 

How do SOPs enhance operational efficiency?

By having set procedures in place, SOPs minimize decision-making bottlenecks and streamline workflows, which in turn increases the efficiency of daily operations. This reduces time and cost while increasing productivity.

The biggest effect is that the better your processes, the better your people, processes and technology work together in achieving results. 

Bottom line? SOPs = ROI

The importance of SOPs is simple to figure out: without easy-to-follow processes, teams become unengaged, you lose out on revenue, and employees head for the door.

That’s why getting your Standard Operating Procedures right is everything.

With the right tools, you can centralize your SOPs in one beautifully automated system, train employees faster, and get performance insights at your fingertips. The outcome? No more lost productivity, and way higher ROI. 👌🏼

Want to scale your business with killer SOPs employees actually love?

Download our complimentary Ultimate Guide to SOP and Process Documentation

Ultimate Guide to SOP & Process Documentation

The why, what, and how to unlock the next level of growth in your business with SOPS & systems

Posts you might like

Three women reviewing SOPs together at a table.

How to Review Your SOPs and Company Documentation 

Why on earth would you need to review your SOPs? ? Surely once you’ve gone through the challenge and effort of assimilating your company processes and SOPs, that’s enough?

SOPs are a vital part of your company’s life force and are bound to change along with the company’s growth.

Read more...

Your first step in getting your teams on the same page

And keeping them there.