Sound Numbers
Financial Information Management
Article: Creating Policies and Procedures that Advance Goals
by Jeffrey A. Thomas

It sounds simple. You set up goals for your company, create policies that lead to those goals, and managers write procedures to insure that everyone works to advance the company toward those goals. But is it simple? You must take steps to insure that the company policies and procedures put in place actually advance your set goals. Failure to do this creates obstacles to success; or worse, actually works against achieving the results you want.    

Consider this example from my experience, and no I won’t tell you where this happened. A large company established a goal of increasing market penetration outside the United States, or attracting foreign investors to the company here. To work toward that goal, the company created a policy of hiring foreign nationals or immigrants, those whose native language is not English. However, the Human Resources department prescreened applications with a goal of reducing the number of candidates it forwarded to the operating units. Therefore, it tossed every resume with misspelled words or small grammatical errors before the operating managers ever see them. Queue the sound of the needle dragging across the record.

Of course, every applicant should make a diligent effort to send a flawless resume.  But if his native language is, for example, Mandarin, mistakes are likely to creep in. And now the sales manager tasked with marketing to China wonders why he can’t find a native Mandarin speaker to translate sales documents. This is one example of failure to align company goals and procedures. To be fair, HR departments are busy, and rejecting poorly written applications thins the stack. However, in this case, the policy in place worked against company goals. The company solved the problem through a series of meetings between the business development group and the human resources department that created methods that improved identification and hiring of qualified overseas candidates. 

Other instances involve less drama, but provide useful examples.  A regional real estate investment company with overseas partners set a goal of providing on time tax returns and reports to investors. However, the accounting department used a system of interrelated reports that provided minute records of all transactions and multiple checks on accuracy.  It also consumed resources while insuring late delivery of all information.  Working with outside tax consultants Jeff streamlined the system, by combining spreadsheets and reducing the reports printed. (This involved taking a large pile of reports around the office and discovering that no one ever looked at half of them.)   The result was reduced office expense and on time delivery of tax information to our investors. 

Following a business method that does not advance company goals wastes resources. Poorly conceived policies work to the detriment of the company if they do not produce results in line with goals. A working group should review every policy or procedure on a regular basis. A group review may catch problems that one person doesn’t notice. What worked for last year’s business plan may not meet the current plan’s goals. Only those policies or procedures that clearly lead to the goals of the company should become part of the company standard.

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