Building People Operations: SOPs
When the company is in hypergrowth mode, it’s easy for the People Department to slip into reactive mode, as every day brings more and more work to be done. Strategically, however, the most important thing is to build the foundation, infrastructure, and processes to let the company scale effortlessly.
On top of creating your business processes, you should start developing your standard operating procedures or SOPs. Many people think processes and SOPs are the same things, but not every process needs to be spun into an SOP document.
Both process and SOP are detailed instructions on how to do something, but there are two major differentiators:
Focus on details.
Processes look at a task from a high level - moving through the general ways to do something. SOPs take the same high-level look at processes and then dive into their nitty-gritty details. For example, SOP will explicitly answer the questions who, where, when, what, and how. And a process might only answer a hint at some of these.
Outcomes.
Processes leave space for interpretation and experimentation. This is beneficial for innovation, but it’s detrimental if you need a predictable outcome. You can’t guarantee that you will get the same results every time with a process. A well-written SOP, though, will always get you the same results. By including all the nuts and bolts, SOPs remove all the wildcards, leaving nothing up to chance.
Why does your People Department need SOPs?
Standardize your best practices.
SOPs equip your team to know the best, safest, or even required way to do something. It eliminates the need for their best guess. Too many times their best guess won’t be the best, and it will leave space for things to go wrong. Their best guess might be less effective, expensive, dangerous, or flat-out incorrect. Remember Murphy’s Law: if something can go wrong - it will. Comprehensive SOPs save your team an incredible amount of time, money, and stress. They will also help establish accountability and support your team in understanding who is doing what.
Capture your tribal knowledge.
People come and go, but these transitions shouldn’t send your business to a grinding halt. They should be seamless, even if someone leaves unexpectedly. There shouldn’t be a task that only specific people know how to perform. It should be already documented in an SOP. This way, anyone can pick up the slack while you work on finding a replacement. And what’s even more critical: your teammates can take care of their mental health and disconnect while on vacation, knowing that their peers can quickly help out using SOPs, as anyone can easily click into how your People Department does things.
Keep things consistent
SOPs set a standard - it’s in the name. When you document the right way to do something, you set an expectation of how it will be done. And from that point forward, that’s how it’s done - no more best guesses or reverting to the old way. No exceptions. Otherwise, what is the point of having SOPs if you let inconsistency leak in?
Getting everyone to do something one way reduces the risk of things going haywire. Meaning there should be no surprise outcomes.
“SOPs provide predictability and efficiency,” explains John Pinedo, founder of Freedom Bound Business. “After all, if everybody knows exactly how a job is supposed to be done, the company can always expect consistent results.”
What SOPs are essential for the People Department in a Startup or Hypergrowth environment?
Startup life doesn’t just have many moving parts; it has a gazillion of moving parts. And while SOPs seem like a nice thing to have, the People Team is probably lean
and busy with heads-down work. So how would you prioritize?
It would be best if you documented work that happens every day, week or month, and there is a lot of it. SOPs will ease up the People Team workload, and they will be a great big step to further automation. Also, they will keep your People Team running like a well-oiled machine (And who doesn’t want that?)
SOPs People Team need to create first:
Payroll SOPs:
How do people get paid?
How are their hours getting tracked?
How are their taxes and deductions being processed?
How does their time-off being recorded and paid?
On-Boarding SOPs:
How do new hires get equipment and email account?
How do new hires get enrolled into payroll and benefits?
How do you obtain mandatory forms from new hires (like I-9)?
How do you collect new hires acknowledgment of your corporate guidelines?
How do you make sure your new hires’ get mandatory training assigned?
Recruitment SOPs: start-ups are hiring on steroids and every employee is a recruiter. Setting too tight of guardrails around attracting candidates will slow your business. But you need to make sure that you have specific SOPs on:
How candidates get job offers - approvals, wording, etc.
How and when they sign NDAs and Non-compete agreements.
How and when you run background checks.
Termination SOPs:
How do you deactivate access?
How do you process the final payment?
How do you collect equipment?
Employee Changes:
How do you process promotions, lateral moves, hours, and benefit changes to ensure that payroll is accurate?
You might feel that some things are missing, and you are free to add them, you know your business. But remember the distinction between SOP and Process I described in the beginning. How we get people promoted would most probably be a process, as there are many ways to do that. But to make sure that they are getting paid their new salary is an SOP because you need a predictable outcome.
SOP Formats
There are three most popular ways to document SOPs.
Step-by-step format
Like a cooking recipe, step-by-step formatting takes a 1,2,3 approach to SOPs, providing detailed instructions for each step. Breaking routine SOPs into numbered (if order matters) or bulleted (if it doesn’t) steps, this format makes simple tasks easy to follow. The person using the SOP just has to go down the list. Each step should be its own action, written as a clear and concise sentence.
Here’s when you should use this format: When the process is simple and requires no decision making.
Hierarchical format
Instead of diving right into the how-tos like the step-by-step format, this format uses a top-down approach. This allows you to break down more complex processes. Starting with looking at the big process picture, the hierarchical SOP zoom in to look at the details.
For example, a restaurant SOP would overview their “All employees must wash hands policy,” and then dive into how long you should wash your hands, where the sinks are, and how often.
In most cases, you can follow a pretty simple formula for this:
Outline the Policy (the “WHY” for what comes next)
Share your Procedures (How to Comply)
Tell people any need-to-knows (set them up for success)
Get the documents in order (make things legit)
Here’s when you should use this format: When the process is complex (10 steps or more) and requires no decision making
Flow Chart Format
The flow chart format leads people through what to do based on the given circumstances. Not all procedures are going to be simple. Sometimes, there are still variables that need to be taken into account. And the person performing the task will need to assess and react to those variables in a real-time fashion.
By giving a canned response to possible variables, this format standardizes when you should do what. It takes into account that depending on what else is happening, not every step might need to happen.
For example, if an employee is supposed to wash their hands every time they enter the lab, but they washed them within the last 2 minutes - they might not need to rewash their hands again.
Here’s when you should use this format: For any process (no matter how easy or complicated it is) that involves decision making.
