Written Procedures

This week, I am going to ask all of you to make me a cup of tea. Since this is an activity which the British are generally accepted as being knowledgeable about, obviously you won't have a problem. First, though, I want you to be clear that the tea must be made to a standard that is acceptable to me. OK? Off you go then.

Ah yes. There is that small point isn't there? What is the standard that will be acceptable to me? Didn't I tell you? This is how I want you to do it:

Simple isn't it? But is this the way you would have made the tea if I hadn't given you those specific instructions? Possibly, but only if you were as picky as I am about tea! This exercise does have a valid point - let me explain.

Back at the office we have been defining a process for brokers to set firm specific benchmarks for the procedures they use on a daily basis. This is quite straightforward and easy to do if you adopt a step-by-step approach.

However, to what do you refer your staff for definitive guidance about a process? If a job specification says "...high standard of record keeping" what standard is that? Unless you have already defined a standard, your employees would be justified in saying "Well, I did it to my high standard..."

However, if you say "...high standard of record keeping, as per the firm's procedures manual" you have clearly stated a standard that you wish to be observed - a benchmark that you have set, specifically for your firm.

Let's look at this in context with something that is common to all brokers (although I suspect tea-making may be fairly common to everyone, I have yet to see it enshrined in a firm's procedures manual)

Let's take the example of renewals. You may have a different procedure in your own firm, but a typical statement in a job specification might read: "Ensure that renewals are completed." Splendid, but there is no guidance on how, when or even what specific areas this might apply to. Imagine then, that having used this on a job specification, the member of staff isn't getting renewal invitations out on time. This is potentially an area of high risk for the firm, so how could you have prevented it from happening?

What about if we had used the following in the job specification instead: "Ensure that professional indemnity renewals are completed as per procedures manual and in a timely manner, including:

This certainly ensures that members of staff are clear about what is expected of them and, if they need further guidance in the process, it clearly states that the standard required can be found in the firm's procedures manual.

However, you can't instruct someone to refer to your procedures manual if you haven't got one, or if the one you have isn't up to date and doesn't accurately reflect the practices, procedures and processes that your firm follows.

And therein lies the moral of this whole story: the regulator wants every firm to be proactive in setting its own standards - it is good business practice, after all. You cannot expect an external adviser to tell you what standards you should have, or what standards your staff should be working to.

You must decide and record them in the form of a procedures manual. This will ensure that every member of staff has something to which they can refer if in doubt and that has as much value for an `old hand' as it does for a new employee.

If you don't have an up-to-date procedures manual, then it's time to get started on one. This will record the business practices of the firm and enable you to construct meaningful and appropriate job specifications for all staff, including those at a senior level. This also gives you a useful tool in terms of stubborn staff members who do not feel that any of this should apply to them - if it's in the procedures manual, then it must be followed.

Treat this as an opportunity to install work practices that you would like to see established and to formalise those that are already operational. It can be useful for identifying potential risk areas too.

Does your firm have written guidelines for keeping records of client conversations? This is an opportunity to ensure that risk is reduced in areas like this and perhaps to finally rid your client files of stick-on notes once and for all. (With respect to the manufacturers, they are very useful for most things but are not appropriate attachments to documents that might end up in a courtroom one day.)

My suggestion for this week's exercise is that you start by assessing where the firm is in terms of a procedures manual. If you already have one, then check to ensure that the processes and procedures it lists are up to date and fully reflect the good practice to which you are aspiring.

If you don't have one yet, then start by deciding who is going to take responsibility for it overall and then by allocating sections to members of staff who know those processes well.

Treat this as a serious project - set timescales and deadlines for completion and ensure that those responsible for each section are aware of the urgency. Diarise regular meetings to review the progress of the manual.

You will almost certainly find out about some practices that you didn't know existed (and wish to change) and in the process will learn a great deal more about the areas for potential risk - and for potential excellence - within the firm.

To download a PDF of this article as it appears in the magazine click here for page 30 , page 31 .