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Your Operations Manual

2009 | Oct 14 in Business Development , Home Page News , Systems , Management , Leadership

By E-Myth Business Coach,

At the heart of a systems-driven business is your company’s operations manual. The operations manual is the authoritative guidebook of how things are done in your business. It gives you an effective way of communicating policy and procedures, and gives your employees the independence and security they need to operate in their jobs for maximum results.

If you’re like most of us, you probably have a folder filed away at home that’s full of all the manuals for the various electronic devices in your household. When you need to know how to work your microwave or your television breaks, the first place you go for help is that folder. In your business, your operations manual acts in the same way. It serves as the single-point reference for all important company information. And when used properly, it’s not just a place to go to look for “fixes,” rather it’s the first thing employees familiarize themselves with so they know how things work, right from the start.

What’s in an Operations Manual?

Content will vary from business to business, but the structure of an operations manual is universal. It should be comprised of the following areas:

  • Company History, Vision & Organization
  • Products & Services
  • Policies
  • Position Statements
  • Systems (Action Plans)

Your operations manual should essentially cover two main areas: companywide information that every employee in the organization needs to know and position-specific information.

The first three bullets in the list above (Company History, Vision & Organization, Products & Services and Policies) make up the portion of the manual that apply to everyone in the organization. They help people understand the “whole picture” including the organizational structure of the company, what you offer to your customers or clients and the general policies under which you operate.

The last two bullets (Position Statements and Systems) contain information specific to an individual position. Obviously the accountabilities of a CFO are different than that of a lab technician, so you’ll want to create operations manual for each position. Ultimately, you’ll have a manual for every position in your organization.

Getting Started

Begin by gathering and/or defining companywide information first. While the documentation of your company’s day-to-day operational systems, policies and definitions is no small feat, it’s absolutely critical and serves as the foundation for every manual you’ll create.

Next, document all the individual systems necessary. For a simple example of a documented system or “Action Plan” as we refer to it, see the Coffee Making Action Plan, under the Resources tab. If you need help getting started documenting your proprietary systems, we invite you to participate in our next Documenting Systems virtual training event.

Often one of the more challenging components of an operations manual is defining tasks and accountabilities to specific job positions. In E-Myth terminology, this is called a Position Statement.

Start by listing all positions in your organization, and create a paper file location and a digital file location to store all documents pertinent to that job position. Once this document inventory has been established, you will be able to identify information gaps, and determine what materials still need to be developed.

These individual Position Statements will describe where employees fit into the organization, for which systems they'll be held accountable, a list of work tasks that must be completed, the standards to which the work must comply, and what results employees will be expected to produce. The Position Statement provides you with a document that clearly defines accountabilities and empowers your employee to meet your expectations.

Updates and Distribution

Remember that change is inevitable and your manuals must get regular attention. Schedule regular update sessions and make a plan for distribution. Annual or bi-annual review sessions should be scheduled to ensure that elements of the operations manual are kept up-to-date. At these sessions, gather managers and administrative support members to do a quick review of the manual’s contents, make updates, add new material, remove out-dated content and redistribute the document.

A well-constructed, relevant operations manual becomes a company resource of key importance.

Keep in mind that your operations manuals can be physical binders and/or electronic files. Whatever format suits your business best is the right way for you. Just be sure that you have back ups stored in a safe place.

Operations manuals sound like a good idea; they’re certainly an organized approach to conducting business, to creating a great system. But will people use them? Will they have any real value for your business? Are they worth the time and effort it will take for you to build and implement them?

Look at it this way. Your business may run reasonably well without operations manuals, but aren’t you aiming for something more? Aren’t you building a business that works—really works—without your having to run the whole show all the time? If you want your business to have true value to a potential buyer or successor, don’t you think having a clearly-defined systems-based way of doing business will give you a leg up?

Comments

  1. .Bobbi D. says:

    The information is very helpful.  A diagram illistration would work well for a visual effect.

    Submitted Oct 14, 2009 11:33 AM

  2. .Vivien H. says:

    Very insightful article but i do have some few concerns. The last part of the OM (Action Plan) is kind of tricky for me to write. I think it's far easier to edit it in some types of companies than in others and/or for some kinds of positions than others. How to overcome that difficulty?

    Besides, I also think that it'd be better to leave it blank for each employee to call for its creativity while fulfilling his duties. Telling them how to do their job step by step may dampen their creativity and make them look like robots. It's a risk that should be factored in.

    Finally, @ Bobby, if you're looking for diagram illustration, refer to smartdraw.com They have free training courses on how to set up action plans.

    Cheers!

    Submitted Oct 14, 2009 12:16 PM

  3. .Andew N. says:

    Well structured article- thanks. I found it quite concise and clear but also expanded on the 'Position Statement' to make that a little clearer for me- thanks.

    I work with Tradesmen. Every Tradesman has his own way of 'doing things.' My focus is communication with my client and of course the finished product. By clearly defining my requirements to my minimum standard- with a progressive checklist: I can now specify exactly how the Tradesman needs to deal with my client and exactly to what standard the finished job must be. There is ample scope for individual practices and innovation as long as 'Benchmark Criteria' are met.

    You could consider a similar 'frame of reference' that is not stifling creativity.

    Have Fun!

    Submitted Oct 14, 2009 1:32 PM

  4. .Don M. says:

    I am just geting started at this E-myth thing. Already I have written out several ops manual pages and a few action plans. the main one was our standard Signature Massage Session, outlining step by step our entire deep tissue massage for all of our Therapist. I too had the "oh my god, I am going to stifle their creativity" spasm in my brain. I got over it and now everyone now know exactly how we do massage at the Dome. the creativity comes in the many other little nuances in the massage for special attention to problem areas. Even in the basic massage there is great creativity in just getting to be an expert in the session.

    What a great source of guidance E-Myth has been for everyone in our Company.

    Don Murphy, WWW.DomeHealingCenter.com

    Submitted Oct 14, 2009 5:43 PM

  5. .shadrack i. says:

    Its only through process documentations that the work can be done in the owners absence. 

    So the business will work for you!.tHANKS. 

    Submitted Oct 14, 2009 10:11 PM

  6. .oscar o. says:

    WOW, thats a very helpful article. Thanks for the information. I had started designing one and this has been a wake up call, i will resume and complete it. Thanks dear. God Bless.

    For your next safari to Africa, please contact us for a fully rewarding experience of the Mountain Gorilla, Birds, Murchison Falls, Source of the Nile, Sipi Falls, Community tourism and wild animals.

    Oscar Ofumbi OPERATIONS MANAGER, WHITELINES SHUTTLE SERVICES LTD.P.O.BOX 10882 KAMPALA, UGANDA, EASTAFRICA, +256775954442,info@whitelinesshuttles.com, www.whitelinesshuttles.com

    Submitted Oct 15, 2009 8:55 AM

  7. .Jose Carlos N. says:

    Very important. Without a OM we set they we do it.

    It gives direction, clarity and prepare the business to free the owner.

    Submitted Oct 16, 2009 7:38 AM

  8. .Mashael F. says:

    do you think wear can we faid some one can help us in writing our manul can read and speak arbic

    Submitted Oct 17, 2009 11:28 AM

  9. .mark R. says:

    If you are struggling with definitions or processes, because they are in your head and only you understand them, go online and look for the operation or definition you are looking for. It can be a good template or even an idea generator. 

    Make use of successful bios of businesses, see what they are doing, or did, emulate them and make it yours. 

    It is your business, your operation and your future, be the entrepreneur not the technician. Use resources to get back to what you want to do!

    Mark

    www.atomicpenny.com

    Submitted Oct 18, 2009 2:19 PM

  10. .Alan P. says:

    This project is an excellent candidate for a Google Docs or Google Sites project. The collaborative nature of Google Apps (includes Google Docs & Sites) makes creating an Operations Manual a cinch to craft, edit, and deliver to all organization stakeholders.

    Google just launched global outreach ("Go Google") for Google Apps today: http://tinyurl.com/yjgkfyg

    Alan

    Follow Twitter: @AWCSBDC | @alanpruitt

    Submitted Oct 19, 2009 12:01 PM

  11. .chris a. says:

    Building position statements provide information for the individuals but you have to be careful of sub-optimizing your processes by focusing too much on the individual.  Businesses are a collection of processes so, start with a process map and focus everyone on their role in operating their process.  Then start writing up the policies and procedures that define that process.  Now you are ready to develop the position statements for each person in the process.

    If you need help getting started then there are a number of free examples available online at http://www.bizmanualz.com

    Chris

    Submitted Oct 20, 2009 2:39 PM

  12. .bob m. says:

    One of the ideas I found help break through some of the challenges listed above was to remember to seperate Position from the person.  Look at your business as if you were going to hire (or rehire) everyone fresh next week. How would you design your business from scratch now that you know all you have learned 'the hard way'.

    Also, as you are considering hiring them next week, consider how you would hire them 2 years from now when your business is 'full size', or if you were going to open a 2nd location full scale in another city without any of your existing team. Part of this is to break from the mindset of one person to one position.  Allow yourself to consider that your current team is probably filling multiple roles today, as you are maturing. Define each of those roles seperately and evaluate individually. That may allow you to break away from the various limitations and challenges listed above.

    One of the ways I have seen this repeatedly implemented was in American Red Cross Disaster response. They have position statements (that get updated and rewritten on a regular basis) that create a framework for response to all disasters of all sizes with all types of responders from 35 year international response veterns to local volunteers who can help for the afternoon. Their system works from when 3 people start to respond to when it scales up to over 12,000 responders in days and then scales down to 3-4 in 43 days.Intially, everyone is wearing multiple hats, but the hats are defined, as the needs change, the resources change the hats are swapped and redistributed.  It is full of creativity to respond to each individual disaster, but there is a core role and guidelines that everyone works from.

    The creativity is in improving the position or system, not in creating a new way to do it each day.

    Submitted Oct 21, 2009 2:51 PM

  13. .Linda B. says:

    After reading this article I have a better understanding of what is needed for others to work they way I do. And as a visual artist turned entrepreneur, I can see the format clearly, but not the details of specific positions. That will take careful observation and frequent notations collected over time for an new business like mine.

    Like making a sculpture, small, incremental steps together help create the organization of the finished piece of art.  So aligning the vision of the business with actual steps is how the operations manual gives your business structure. 

    Submitted Oct 21, 2009 10:04 PM

  14. .Brent M. says:

    I took a look at Google sites and did a small prototype in order to centralize our documention. It seems pretty easy to set up, but it would still require a fair amount of time to fully flesh out. Is anybody aware of a framework or template for Google sites that could be easily adapted?  I looked at bizmanualz.com but it looks like it may be more that what we want right now.  Bringing too much process at once might turn people sour on the idea of documenting. BTW - I work for a staffing firm.

    Thanks!

    Brent M.

    Smart Solutions, Inc.

    Madison, WI

    Submitted Nov 11, 2009 9:45 AM

  15. .Phillip B. says:

    As a new E-Myther, I found this article helpful and encouraging.  I look forward to applying the principles of systemization in my (currently) single-location, and eventually to a multi-location operation.

    Time to move from entremanure to entrepreneur!

    Thank you, Mr. Gerber, et al!

    Phillip B.

    Alpharetta, GA

    Submitted Nov 15, 2009 8:52 PM

  16. .tapiwa s. says:

    Submitted Apr 29, 2011 11:00 AM


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