Standard Operating Procedures Can Make You More Flexible

by Brad Power  |  10:00 AM April 30, 2013

Most people think standard operating procedures
are a strait jacket that limits their flexibility. Yet in our
increasingly complex world of work, with so many possible decisions and
steps, clever use of standards can liberate. They can actually make it
easier to tailor customer experiences at low cost.

Consider how standards are helping the Cleveland Clinic, rated one of the top hospitals in the United States. As Chief Marketing Officer Paul Matsen
told me, “We use enterprise-wide standards. There is one marketing
communications team, and we work across all our institutes, such as
heart and vascular, or cancer. Having a single enterprise brand and
image creates organizational challenges because it seems as though it
constricts autonomy. But it actually creates freedom within a structure.
For example, we are building a development platform for the iPad, and
defining how it will interact with our electronic medical record system.
When we resolve that for this first application, then our people will
be able to create content for other applications using the same standard
platform. Once you set up the standards and platforms, you can do more,
and you can do it well.”
The Cleveland Clinic cleverly uses standards to deliver operational
consistency, reliability, and low cost. Yet at the same time they use
these standards as a springboard for creating unique solutions for each
customer based on a deep understanding of their needs. (I call this
understanding and tailoring “customer intimacy”). The result is a powerful combination that fulfills two customer value propositions at the same time.

Another example at Cleveland Clinic is in search engine marketing.
Paul Matsen: “We’ve seen that when patients are diagnosed with a
disease, they’re increasingly going to the web to research care,
diagnosis, treatments and doctors. We’ve reshaped our marketing mix to
reflect this new patient behavior. We spend half our media dollars to
reach consumers searching for health information, and we have built
reliable and useful experiences for those who come to our site. We
partnered with institute leaders to build a few patient pathways, and
we’ve expanded to over 100. It’s a very efficient model for patient
access. Building on our standard approach, we were able to scale and
replicate easily.”

Twenty years ago my friends Michael Treacy and Fred Wiersema asserted in their HBR article “Customer
Intimacy and other Value Disciplines” that leading companies succeed by
excelling at one of three “value disciplines” — operational excellence,
customer intimacy or product leadership — while meeting industry
standards in the other two. They predicted that future winners would
need to master two of these value disciplines. And the smart use of
standards, as at the Cleveland Clinic, is part of the answer.

I see more and more companies mastering “operating models” — that is,
their culture, business processes, management systems, and computer
platforms — that use standard work to drive operational excellence and
also provide a platform for tailoring customer solutions. For example,
in a previous post,
I described how Tesco made major strides in its supply chain management
in the 1990s by applying standard process disciplines. It then added
customer insights it gained from its Clubcard loyalty program and online
shopping data to those more capable supply chain processes to tailor
customer offerings in local stores and online.

The traditional view that complying with standards is part of a rigid
“command and control” management system should be replaced with a new
model: clever application of standard work allows you to have both
efficiency and the flexibility to offer unique solutions to each
customer. In my next post I’ll delve more deeply into different kinds of
standards, from checklists for safety to the standard work that forms
the basis for continuous improvement.