Business Policy Roles At Your Company

Giving employees a clear understanding company policies and the their ability to apply discretion will foster better decision-making throughout the organization.


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All businesses have policies. Having a policy means that the same decision does not have to be made again and again at all levels within the organization. "It's our policy" is a phrase that indicates that discussion is closed on the subject, and it's not open for reconsideration or debate.

Ask yourself what role your company policy plays. Does it help employees serve the customer, or is it a barrier to their empowerment that they hide behind when tough decisions need to be made? Is it a filter to ensure that the many trivial issues get handled at a lower level, while the significant few important questions get the executive attention they deserve? Do your policies recognize your employees' responsibilities and  authorities to protect and serve the customer, or are they an obstacle to that empowerment?

“I knew I broke the rules, but I believed it was the right thing for the  customer and our relationship going forward." Ask yourself if you can visualize one of your customer service people saying this after they made an accommodation to help resolve an issue between your company and your customer even if the accommodation was worth $500, $5/000 or $25/000. If so, congratulations! You accept that your customer service people are empowered. Now the real test: Ask them if they feel authorized, to "break the rules" to get the customer what they need. I hope that you aren't disappointed with their answers.

If your customer service people don't feel empowered, and they are closest to the customer, it's unlikely that your people who don't interact directly with customers feel empowered. For them, it just might be "business as usual."

What is your motivation for having policies? To limit spending, protect the enterprise, keep people from making decisions? Or is it to ensure that all decisions get made in the "corner office"?

One approach to business policies is to use the policies for handling the routine 90 percent of issues that come up, so that management intervenes with only the significant 10 percent of items that require deeper consideration. The routine 90 percent of decisions ought to fall into the policies or guidelines of your people who are empowered to exercise their discretion or authority. Ask yourself if your people know their authorization level for decision making.

What is your people's comfort zone for making decisions without management's help? When can they be assured that even if their decision was wrong, it is a recoverable event? Early in my career as a plant manager, I had an inside sales person come to work quite upset. Concerned, I asked her if she needed to go home and take care of whatever had made her so upset. She broke into tears as she explained that she got home the evening before and realized that she had made an invoicing error that amounted to a couple hundred dollars, and she couldn't afford to lose her job or pay back the difference to the company. She had no idea what level of human error was recoverable, forgivable or unacceptable. It cost her a night's sleep, and it gave me a lesson in our employee's needs. I realized that on the front lines of customer service, our people needed to know the boundaries, to know that the policies are there to protect them. I needed to make sure that everyone had a good idea about what they were authorized to do or not do in the name of serving the customer.

Are your policies tools to enhance your employees' and organization's ability to serve your customers or are they hurdles that make it more difficult for your people to give your customers the best service? Are they barriers your employees can hide behind rather than give your customers the real answer? Do your people know what level of accommodation they are authorized to offer to make a customer's pain disappear?

They might need to know these answers someday.

Precision Machined Products Association