The Clean Sheet of Paper Approach

By Mark Hafner

Have you ever questioned why a particular policy or procedure was in place at your organization, only to hear “we’ve always done it that way”? That is my least favorite answer to a question, for it shows no thought. Does the person doing the procedure know why they are doing it? Does the procedure still make sense to be doing? How often does your organization review its procedures to ensure they are still relevant and being followed properly?

After financing hundreds of businesses over the past 30 years, it is fairly easy to spot the businesses that are well run vs. those that are not. I have found, for example, that a business with a clean and well organized warehouse also has clean and well organized books and records. Why? Because it goes to the culture of the business and comes from the top down.

I know in running my own business, that twice over the past 15 years, we have taken a clean sheet of paper approach and designed the workflow of our business as if we were starting new. We have painstakingly gone through what we wanted to accomplish, why it was important and how we would do it. We have looked at what skill level people needed and what each position’s responsibilities were. We have crafted detailed policies and procedures to follow on a daily basis. Once complete, we then look at who we have and who would fit where. Sometimes it leads to personnel changes and sometimes not.

The first time we went through the exercise, we went from two managers and six staff to one manager and four staff. The end result was that we believed we had better controls in place with significantly less personnel.

We have done modified versions of the entire process as well. The point is, things change and you have to adapt. First, your own policies will change over time (with or without your knowledge) as people make tweaks based on their experience. The tweaks will be minor and hardly worth mentioning (or so they believe) until one day you see the cumulative effect is significant. When you ask how long people have been doing it this way, you get the old trusted line “we have always done it that way”. Ugh!

Good times always hide problems, in that when revenue is up, increased expenses aren’t as noticeable. Reviewing your business in good times and bad is important as well. When business is down, and struggling, often changes are made for the survival of the business. It is always amazing to see how the changes are handled and lead to a better run organization. Typically, businesses that come out of an economic downturn, and who struggled through it, are stronger and better positioned for their future, as they are more keenly aware of how their business runs and what works and doesn’t.

Whether in your organization or in that of your clients, there is always room for improvement. A periodic review of how work flows within a company can be quite beneficial. Make sure to include your employees, those actually doing the work each day, as their insight is invaluable. Making them part of the process improves the buy-in as well.