Delaying Adequate Policies and Procedures When Upscaling

Keywords: Policies and procedures, Upscaling, Business growth, Contingency plan, Business continuity plan, Process optimisation, Productivity, Automation and AI

As a business owner, you’re probably all too familiar with the rush of excitement that comes with planning to upscale. It’s a thrilling time, filled with thoughts of increased sales, more customers, and a bigger market share. But here’s the thing—too often, in the flurry of planning, one crucial aspect is overlooked: the need for well-defined policies and procedures. Without them, the dream of growth can quickly turn into a nightmare of disorganisation, inefficiency, and chaos.

In this blog, I’ll break down why delaying the implementation of adequate policies and procedures is one of the most common pitfalls for businesses planning to upscale. We’ll also touch on business continuity and contingency plans, which are vital for sustainable growth. Trust me, this is something you don’t want to push off until it’s too late.

What Are Policies and Procedures, and Why Do They Matter?

You might be thinking, “I know what policies and procedures are, but can’t they wait until after we start growing?” Unfortunately, the answer is no. Policies and procedures are the backbone of your organisation—they define how your business operates day-to-day

• Policies provide the overarching rules and principles that guide your business.
• Procedures lay out the specific steps required to implement those policies effectively.

These two elements combined help ensure consistency, compliance, and efficiency. Without them, you risk operational confusion, slow productivity, and even legal troubles.

The Case of Zappos

Take Zappos, for example. The company is renowned for its growth and customer service, but what many people don’t realise is that a huge part of its success was built on a foundation of strict policies and procedures, especially regarding employee roles and customer service standards. This structure allowed Zappos to scale efficiently without losing what made it special in the first place.

The Risks of Delaying Policies When Upscaling

When you’re planning to upscale, you might think, “Let’s focus on getting more customers and revenue first, and we’ll get to the policies later.” This line of thinking could be detrimental to your business in the long run. Let’s break down the specific risks of delaying:

1. Operational Bottlenecks and Inefficiency

As your business grows, the complexity of your operations will naturally increase. Without clear policies and procedures, your team will be left to guess how things should be done. This leads to inefficiencies, bottlenecks, and miscommunication, all of which reduce productivity and slow down growth.

Hypothetical scenario: Imagine you run a mid-sized e-commerce business, and suddenly, you experience a surge in orders due to a successful marketing campaign. However, because you lack clear procedures, your fulfilment team doesn’t know how to handle the increased volume. Orders are delayed, customers are frustrated, and your reputation takes a hit. A simple policy outlining how to scale operations in busy periods could have saved you from this disaster.

2. Increased Risk of Non-Compliance

Depending on your industry, there are likely regulatory requirements that you need to adhere to. Whether it’s data privacy laws, employment regulations, or health and safety standards, neglecting to establish adequate policies can lead to non-compliance. This isn’t just risky—it can be costly in terms of fines, legal fees, and even business closure.

Example: In 2018, Facebook faced a major data breach scandal, which led to massive fines and a PR disaster. One of the contributing factors was the lack of clear data management policies at scale. If a giant like Facebook can stumble, no business is immune to this kind of risk.

3. Employee Confusion and Low Morale

As you grow, new employees will come on board. Without clear policies and procedures in place, onboarding can be chaotic. Employees may feel lost, unsure of their responsibilities, or even demotivated because they lack the guidance to do their jobs well.

4. Customer Service Decline

One of the most immediate signs that a business is struggling with its growth is declining customer service. When there aren’t established procedures for handling customer inquiries, complaints, or refunds, service quality drops. And let me tell you—once customer trust is broken, it’s hard to regain.

When Should You Implement Policies and Procedures?

The answer to this is simple: before you start upscaling. Policies and procedures should be in place to handle growth before it happens, not as a reaction to it. If you’re waiting for things to go wrong before setting up these critical frameworks, you’re already too late.

However, not every business will need the same policies at the same time. Here are some key points to consider when deciding whether you need to focus on establishing or refining policies:

1. New Hires or New Departments

If you’re expanding your team, you need clear HR policies in place to handle everything from recruitment to training and performance management. Without these, new employees will lack direction, and your overall productivity will suffer.

2. Expansion into New Markets

If you’re entering a new market, you’ll need to update your compliance policies to meet the specific legal requirements of that market. This could include tax laws, employment regulations, or industry-specific guidelines.

3. Increased Customer Volume

As customer demand increases, you need well-documented customer service procedures to ensure consistency. This includes how to handle returns, complaints, and escalations. Delaying these procedures could result in a flood of negative reviews, which would be hard to overcome.

The Role of a Business Continuity and Contingency Plan

While policies and procedures are crucial for day-to-day operations, don’t forget about the bigger picture. Having a Business Continuity Plan (BCP) and a Contingency Plan is just as important when scaling up.

A Business Continuity Plan is all about ensuring that your company can continue operating during a crisis—be it a natural disaster, data breach, or unexpected financial hit. Think of it as your long-term safety net.

A Contingency Plan, on the other hand, is more short-term. It outlines the steps to take when something goes wrong in a specific area. For example, if a key supplier can’t deliver, a contingency plan will tell you who your backup suppliers are.

Why These Plans Matter

Without a BCP or Contingency Plan, your business could face serious operational challenges during unforeseen events. You don’t want to be scrambling for solutions in the middle of a crisis. Establishing these plans now means you’re prepared, no matter what happens.

Real Example: The Case of Hurricane Sandy

When Hurricane Sandy hit the East Coast in 2012, thousands of businesses were left without power for days, some for weeks. Those with a Business Continuity Plan in place—companies that had systems for remote work or backup power sources—were able to continue operating with minimal disruption. Others, unfortunately, were forced to shut down for good.

The Cost of Delaying

Let me break it down—delaying the implementation of adequate policies, procedures, and contingency plans will cost you. Whether it’s in the form of lost revenue, decreased employee morale, or regulatory fines, the price is too high.

The Case of Blockbuster

Remember Blockbuster? At its peak, it was a dominant force in the video rental industry. But as competition increased and the digital age took over, Blockbuster failed to update its policies and procedures to adapt to new market demands. Without a proper contingency plan or updated operational strategies, they couldn’t keep up, leading to the company’s eventual demise.

Conclusion – Policies, Procedures, and Planning: Your Business’s Lifeline

So, what’s the takeaway here? Delaying the implementation of solid policies and procedures is a gamble you don’t want to take. As your business grows, the complexity of your operations will only increase, and without clear guidelines in place, you risk derailing the very success you’ve worked so hard to achieve.

As you scale, remember to focus on:

• Clear policies and procedures for daily operations.
• Business Continuity and Contingency Plans to handle the unexpected.
• Setting up these frameworks before you start to grow, not after.

If you do this, you’ll not only set your business up for success but also ensure that your growth is sustainable, efficient, and resilient. Trust me—getting your policies right now is one of the best investments you can make for the future of your business.