Why Process Documentation Is Important for Your Business
Business process documentation can be vital to your growth.
We get it, it’s not the most exciting part of running a business, and it may even feel like process documentation isn’t important in the first few years — especially if you’re a solo entrepreneur.
But without laying down a set of standard operating procedures, you can’t ensure things run smoothly as your organization grows and establishes a set way of doing things.
Just picture this:
A new hire walks into your company, or someone needs to perform a task they don’t usually do — the caveat? There’s no documentation. You’ll have to devote time and resources, including human resources, that you could otherwise put into other operations to scale your business.
Instead, you could reap the benefits of process documentation to streamline the core processes that your business relies on.
Let’s see what that looks like. Here’s what you’ll learn:
What is process documentation?
Why process documentation is important
What your process documentation should include
Questions you should ask yourself
Final thoughts: The importance of process documentation for your business
What is process documentation?
At its core, process documentation is the act of analyzing what processes your business has in order to operate, then documenting the steps involved in each of those processes. You want to show how the process should be completed to ensure consistency each time. Here’s how EOS founder, Gino Wickman, puts it in Traction:
“There are three stages in documenting your Way. First, identify your core processes. Then break down what happens in each one and document it. Finally, compile the information into a single package for everyone in your company.”
In essence, you identify the processes your business performs and document the steps that are involved in each one of those processes. While that might sound simple, figuring out and writing out each department's processes and then packaging these processes for everyone can take a lot of time.
First, you need to identify each process, usually brainstorming with the person(s) who complete these tasks. After all, they are the ones who have their feet on the ground and can give you key insights into how the process should work (and a lot of times, how you can make it better!).
Then, you need to document them, preferably following the 20/80 rule. If you aren’t familiar, the 20/80 rule says you should focus on documenting the 20% of your processes that yield 80% of the results.
You don’t need to write out every small detail in your HR process — you want to streamline here. The benefits of process documentation come from identifying your business’s most crucial processes and the steps involved. You want these documents to be a valuable resource for your employees. You don’t want to overload them with information.
Lastly, you’ll want to write everything out in a company playbook. That will be your visual roadmap or knowledge base that all team members can consult.
Now that we’ve gone over what process documentation is, let's go over why it’s so important.
Why process documentation is important
Process documentation helps establish a strong foundation focused on continued growth and prevents confusion or inefficiencies. It keeps every employee on the same page and saves you time and money in the long run.
Process documentation helps build a foundation of improvement and scalability
With a strong Process Component™, you’ve got a great foundation to optimize your business. Moreover, identifying problems like redundancy, missed process steps, or even compliance issues becomes easier. Now that the process is documented, it’s easier to solve these issues. You can always update your process document and keep staff members in the loop.
Process improvement should be a natural goal of documentation. You can see if each team member agrees with the process documents. They can also identify bottlenecks that might not seem evident at first glance.
You can also use your process documentation to scale your business. If you know how you’re currently running things, you can analyze the methods to see what changes you can make over time to improve your way of doing business.
Process documentation prevents confusion for current and new employees
The benefits of process documentation will add instant value to your employees.
A 2019 Gallup report found that only 12% of employees agreed their organization did a great job onboarding new hires. Let's face it, most of us have experienced lackluster onboarding at one point or another.
Maybe you sat and watched a few HR videos that didn’t really answer your questions, or perhaps your new manager was too busy to spend much time with you going over flowcharts or checklists.
With clear documentation, you can ensure that existing workers and recruits have an easy-to-understand procedure to fall back on. Your team will spend less time looking for what they’re supposed to do and more time completing their work.
You also don’t have to worry quite as much about losing that amazing person who seems to understand how every input works. With process documentation, everyone will know how the process works, which could help improve retention, too.
Process documentation saves you time and money in the long run
Let’s go back to reducing employee turnover. The 2022 Work Institute report estimates that conservatively, the average employee costs $15,000 to replace (based on a median base pay of $45,500).
While not all turnover is due to a poor process, employees often quit due to mismanagement or communication issues.
A well-documented process ensures that your staff members know exactly what is expected of them. They can complete their tasks comfortably, knowing they are getting them right the first time. And that is just one area where process knowledge can help save you time and money.
Outside of employee retention, the benefits of process documentation include making it easier to identify issues in your business process management — problems that could cost you a lot.
You can improve efficiency and ensure consistency each time you repeat a process. If you aren’t trying to reinvent the wheel each time you make a sale, it’s a faster, less clunky process for everyone.
That also helps everyone stay on track with compliance issues like HIPPA, accounting standards, or other workplace regulations specific to your industry.
What your process documentation should include
We hope by now it’s clear why process documentation is important. But we understand that figuring out what to include in your documentation might still be a bit of a struggle.
As we mentioned earlier, we follow the 20/80 rule — where you want to focus on the 20% of your processes that complete 80% of the work.
If needed, you can always go back and fill in more details down the line. But the sooner you get your core processes documented and packaged as a useful resource for new and existing staff, the better.
In that sense, you don’t need to document when to schedule every meeting or task. Instead, focus on getting the most critical tasks for each major business process down on paper.
You want to make sure you’re documenting processes in all of your major departments, from sales to HR and marketing. And this documentation should be something of a team effort. You want to work with the people who complete each process.
A person in charge of a specific process is what we call a process expert. They can be some of your greatest allies in identifying issues with the documented process and will know which steps are most important for each task.
Once your core processes are documented, one of the most crucial steps is packaging your documented processes so new and existing staff members can easily locate them.
So, you’ll want to document these steps in a company playbook once you’ve consulted on the major process inputs in each department. That will be the visual representation for everyone in your organization to better understand how your business functions.
One tool we love and recommend to our clients is Trainual. It offers everything you need to nicely package all of your processes, policies, and company information in a single easy-to-navigate platform.
Make sure that each employee can consult the relevant documentation as needed. This company playbook is only helpful if everyone’s using it.
Questions you should ask yourself
Process documentation is a vital but sometimes lengthy process. And you’ll probably need to revisit this task every now and then. Being familiar with some of these questions about your documentation can help.
When you’re preparing to revisit your process documentation, you’ll probably want to ask:
How many people do you need to involve? While you don’t want too many cooks in the kitchen, having enough process experts will help with the documentation.
Do you need outside help in completing your process documentation?
Has your company grown quickly and with little documentation completed so far? What is your starting point like? How involved is this likely to be for your organization at this time?
Are there any industry-specific issues you need to keep in mind when documenting your processes?
Will you need to ensure your processes meet the standards of an outside organization?
When you’ve completed the first draft of your process documentation, you’ll also want to ask some questions to make sure your processes work as intended.
Your process documentation should help you answer the following:
Is this process working well? Are we consistently getting the intended results?
Are we meeting deadlines?
Can we implement technology or automation to make this process more efficient for our staff members?
Can we find ways to improve our process to ensure a better customer experience?
Chances are you need to refine the process further if you can’t answer these questions with your current process documentation. Or maybe you could benefit from some extra help.
Final thoughts: The importance of process documentation for your business
While it can seem overwhelming at times, the benefits of process documentation far outweigh the time and effort it takes to complete this task.
Process documentation aims at long-term success for your company. It helps you identify weaknesses in your business process, improve efficiency, and get everyone on the same page.
Without proper documentation, you run the risk of running a successful business that lives in the minds of a few key individuals. While this can work initially, it doesn’t account for personnel changes or what happens when your business grows.
Process documentation will help ensure your new employees have a great onboarding experience and feel confident as they integrate with your organization.
While it may seem challenging, BuildTheProcess is always here to help.
Need help with your process documentation? Download our core process discovery guide.
Still don’t fully understand process or how it can benefit your business? Check out the book Process! by Mike Payton and Lisa González — an incredible introduction to all things process, especially for businesses running on EOS®.
