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Policy addresses what can be done. Procedure addresses how it will be done. Both policy and procedure are essential to the success of any organization or business. 

For my real estate business, I set a limit on how much money per month my property manager can spend for repairs and maintenance without having to consult with me. If for any reason they need to exceed the amount, they are required to contact our office immediately.

This is policy – the what – and it’s a key component to any business.

How Policy Helps You Lead Well


One way to encourage teamwork is to let people at the operating level know what the leader wants. If they know what the leader wants, the people should then be able to make good decisions that are in harmony with the overall goal of the organization. This allows your team members to work together and succeed together.

Basically, when members of an organization have a series of clear policy statements, they have a basis for making good decisions. These decisions will be in alignment with the overall direction of the organization.

So, #1 – Policy ensures better decisions and effective teamwork.

A lack of written policy causes leaders have to re-decide today what was already decided yesterday. The development of well-defined policy statements can help prevent this vicious cycle. If leaders will take the time to make decisions and state them in the form of a policy, then other people can apply the decisions to similar problems without the leader having to be involved each time.

So, #2 – Policy raises efficiency and independence from employees.

Good written policy statements help communication in any organization. Policies serve as fences: as long as someone is staying inside of the fence they can make a decision. This frees people up to make decisions at the operating level and causes the organization to be more efficient.

So, #3 – Policy allows people to make adjustments proficiently.

Mistakes While Policy-Making


Now that we’ve covered the importance of policy-making, it’s time to understand some of the common policy-making mistakes.

There are times when a written policy is in effect, but it is being used incorrectly. The wrong use of policy can create more problems than it solves. Below are some mistakes that organizations make regarding policy.

1. Not Having the Policy Stated Clearly in Writing

People need to be able to read and study the policy. As I like to say: “If it is not in writing, it does not count.”

In my office, each department owns and updates a binder of policies. This binder serves as a training tool, a resource guide, and a decision-making tool. Basically, a new employee can read the binder and know all of the basic information about his or her department.

As you create binders, write out all policies clearly. Have numbered steps or bullet-pointed lists. Make the policies simple and easy to read.

2. Not Having Coaching & Training on the Written Policies

It sounds drastic, but policies must be communicated seven times and in seven different ways. Most of the time, simply reading the policy isn’t enough to solidify the system in your employee’s mind. Keep a binder like I mentioned above, but also consider posting the policies on your office walls and computers, and verbally communicate the policies often.

The why of policies must be communicated – especially in real-time. When an issue arises, it’s helpful to refer to the policy and explain why the policy is in play.

3. Not Including the Team When Developing Policy

Policy decisions that are made separate from your whole group are difficult to administer because they generally don’t reflect the thinking of the group. Always include as many people that will be directly influenced by the policy as possible.

Also, when done properly, a group will likely make a more effective policy statement than a single person.

4. Not Sticking to the Policy and Making Too May Exceptions

When you make too many exceptions to established policy, you have no policy at all. Make every effort to limit exceptions and you will avoid confusion among your employees. In addition, you’ll avoid trouble because your employees will know that you stick to the policy no matter what. This reinforces good work ethic and decision-making in the office.

The minute two people decide to work together, they need a policy statement. They need some agreement on what they are going to do.

How does this new team discover the best policy? Well, almost always a need arises from a problem. Sometimes the problem has repeated itself and sometimes it is a new problem. And sometimes the problem will occur in the future unless something is done about it now.

A policy statement is needed so that efficient decisions can be made regularly. Don’t delay creating policy for your organization or business. Find two or three problems, have a team meeting to create policies for those two or three problems, and watch as your job as the leader becomes much easier.

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