The world’s most iconic businesses share one key trait: they recognise the value of a successful working system. This system is made up of three distinct yet interconnected elements:
- Policies
- Processes
- Procedures
For a working system to be truly effective, all three elements must work together, forming a cohesive foundation for business operations.
Let’s explore the differences between policies, processes, and procedures—and why a successful system depends on all three
The Difference Between Policies, Processes & Procedures
A policy defines a company’s rules, beliefs, and guidelines for specific outcomes. It serves as the foundation that drives both processes and procedures.
A process provides a high-level overview of how tasks or outcomes are achieved.
A procedure outlines the detailed steps required to complete a process while ensuring compliance with the policy.
Related: What is a Business Playbook and Why You Need One to Scale Your Operations
In business, policies govern various aspects of operations. For example, you may have a policy for clocking in at work, a dress code requiring smart casual attire, or a rule stating that employees cannot use the company credit card without approval.
Policies act as overarching rules that provide a framework for specific tasks. A clear example can be seen in workplace health and safety. Consider a task such as moving boxes from one location to another.
The policies that govern this task dictate how the boxes should be moved. For instance, a policy may state that all boxes must be handled according to safety guidelines outlined in the company’s manual to prevent injury.
Continuing with this example, the process related to this task would involve moving boxes from one place to another when dispatching goods.
This might be called the “Pick and Pack Process”, which includes multiple steps such as reading the dispatch docket, selecting items from shelves, checking product quality, and choosing the correct postage box. A process explains what needs to be done—but not how to do it.
To ensure consistency, a procedure for the Pick and Pack Process would detail the exact steps required to complete each task. Procedures provide clear, actionable instructions so that employees can correctly follow the process.
For example, the procedure for selecting items may look like this:
Selecting items for dispatch
- Read the code on the docket to locate the goods in the warehouse.
- Verify that the item number on the box matches the item number on the docket.
- Sign the docket to confirm the numbers match.
- Take the items to the dispatch counter. If the items weigh more than 5kg, use the conveyor belt to transfer them to the dispatch bay. Follow the health and safety policy for proper handling.
The 3 Pillars for a Successful Working System
Policies are often integrated into processes and procedures or provided separately, such as in an HR/Employee Handbook. If presented separately, the written process or procedure should reference the relevant policy by specifying its location or linking to the documentation.
Why Use The 3 P’s in Your Business
Every company, from the moment the first employee joins, develops its own culture—its unique way of operating and its own personality.
You want to ensure your business cultivates the culture you envision rather than having it form accidentally, which can be difficult to change later.
Having clear policies, processes, and procedures empowers employees to work more independently, leading to greater job satisfaction as they understand exactly what is expected of them.
To ensure your business runs as efficiently as possible, all employees must fully understand and be accountable for all relevant policies, processes, and procedures.
To ensure that your business is running as efficiently as possible, all employees must fully understand and be accountable for all relevant policies, processes, and procedures.
Documented policies reinforce business operations and help maintain company culture while preventing costly mistakes, including reputational damage. For example, a social media policy may state that employees must not post on social media without clearly stating that their opinions are their own and do not represent the company.
Processes guide employees on how to achieve a specific outcome and ensure consistency in the customer experience. This is how franchises maintain a uniform experience regardless of location, ensuring customers receive the same service at any branch worldwide.
Procedures ensure everyone in a business knows exactly what’s required of them by providing step-by-step instructions. Nothing is left to chance, helping maintain company standards. They outline how tasks should be completed in your business, with adherence to these methods enforced by policy.
If a trades company has a policy stating that after every air conditioner installation, the surrounding area must be cleaned, the procedure specifies using a vacuum cleaner for the floors and a soft cloth to wipe down the unit.
Procedures also help businesses measure staff performance and boost productivity by documenting the correct way of doing things. With these documents readily accessible, anyone can find out how to complete a task correctly.
Related: The Power Of Process Mapping: Unlocking Efficiency And Growth
Here are some examples of policies, processes, and procedures:
Example 1
Policy: Products must be dispatched within 24 hours of placing an order.
Process: The dispatch team prepares the order while the dispatch manager monitors its quality.
Procedure:
- When an order is received, a dispatch team member checks the order form to verify stock availability using the operations app.
- Upon receiving an alert, the team member locates the required item(s) and delivers them to the packing area. A forklift is used for heavy items.
- Items are packed and verified against the order.
- Packing address labels are affixed, and packages are moved to the courier pick-up area.
- Order dockets must be signed and placed in the orders tray once completed.
Example 2
Policy: Everyone is responsible for washing and clearing used items in the staff kitchen.
Process: Clean and put away used items in the staff kitchen.
Procedure:
- Wash cups, crockery, and utensils using the green cloth beside the sink and the washing liquid stored under the sink.
- Dry all items with a tea towel kept near the microwave.
- Store dry items in the wall cupboards and drawers.
Developing effective policies, processes and procedures eliminate mistakes.
Example 3
Policy: All passwords must be stored in LastPass. Do not share passwords outside of LastPass. Write them down, or save them in electronic notebooks.
Process: Log into the company CRM using LastPass
Procedure:
- Open the CRM website and click “Log In.” LastPass will detect the login details and automatically fill in the fields.
- Click “Enter” to access the CRM.
Frequently Asked Questions
1. Why do I need all three—policies, processes, and procedures?
Each element plays a crucial role in your working system. Policies set the rules, processes outline the steps, and procedures provide detailed instructions. Together, they create consistency, improve efficiency, and ensure your business runs smoothly.
2. Where should I start when creating a working system?
Start small. Pick one area of your business—such as onboarding new employees, handling customer inquiries, or managing social media. First, define the policy (rules), then map out the process (steps), and finally, document the procedure (detailed actions).
3. How detailed should our procedures be?
Your procedures should be detailed enough that a new employee can follow them without additional guidance. Include step-by-step instructions, tools needed, and links to relevant policies or resources.
4. What’s the best way to document policies, processes, and procedures?
Use a centralised system, like a business operations playbook or a digital knowledge base, where all employees can access and update documents easily. This keeps information organised and prevents inconsistencies.
5. How often should I update the policies, processes, and procedures?
Regularly review your systems—at least once a year or whenever there’s a major change in your business operations. Encourage employees to provide feedback so you can improve and refine them over time.
6. Can I systemise my business on my own?
While you can start documenting some processes yourself, creating a truly scalable working system requires expert guidance. Book a call today, and let’s build a system that helps your business grow efficiently and effortlessly.
Related: Why Businesses Worth Millions Are Built With Efficient Systems
Conclusion
Every business relies on a structured working system to scale effectively. This system combines policies, processes, and procedures that support efficient business operations.
Start by developing a policy in one area of your business—this sets the rules and guidelines. Then, outline the key steps to follow; this forms your process. Finally, document the exact actions needed so that any team member, supplier, or client can complete the task with clarity and consistency.
Building a strong foundation for growth starts with the right systems, but you don’t have to do it alone. Book a call today, and let’s create a system that makes your business more efficient, scalable, and stress-free.
