Standards as the basis of success: The story of one businessman

First there was a word. And this word was: “standard”! No, not like that. At first there was chaos – misunderstanding between the manager and the subordinate, difficulties in managing large systems. And only then came the standard. And with it – order.
I will tell you one story that made adjustments to my views of standards. It happened about 15 years ago, during an extreme corporate training. We were sitting by the fire in the woods in the middle of the night. I asked the owner of a large IT company:

— Why is everything in your company so regulated, standardized, written down in instructions, decrees and orders?
He answered:
— There are companies where the meeting point is a leader, a person. And there are those where the collection point is a document. I want to create a system that is automatically managed. I don’t want to manually make decisions for subordinates. My goal is to issue an order and watch how goals are achieved and money is made faster and more efficiently.
Benefits for the employee and manager.
“When I hire a person, I determine in advance the standards and procedures by which he will work,” continued the businessman. — This simplifies its adaptation: the employee knows the rules of the game and does not waste effort on understanding how this job differs from the previous one.
— And if there is no result? Is the employee unable to achieve the goals set for him? I asked.
– We are releasing him. It is important that there is no conflict: both he and I understand the situation in the same way. Standards accelerate decision-making, as we not only save money on salaries, but also minimize equipment and workplace costs.
Standards and adaptation to change.
“But circumstances change, orders get old and multiply,” I remarked.
“And then I issue a new urgent order,” answered the owner calmly. — The standard should be flexible. If the system does not work properly, I look for the reason, I ask the employee: is everything done according to the instructions? If so, but there is no result, then a correction is needed. Without instructions, it is more difficult to do this, because people often perceive instructions as painful criticism.
— And when there is a standard, does it turn out differently?
– It is much easier. First, as a manager, before a meeting with a subordinate, I analyze where exactly there was a deviation from the instructions. We then review together how the work performed meets the standards. If we find a discrepancy, we correct it together: I explain what and how to do it. Often, the subordinate himself understands his mistakes, because he knows the instructions and work standards well.
Impact on the company’s reputation and capitalization.
— Is that why we work with external auditors? I asked.
— Yes, it affects the capitalization. When the company operates according to world standards, I can easily explain to financiers how much and for what I need investment and how it will pay off. It also affects the company’s reputation. I do not plan to sell it, but for myself I want to understand how much my business is worth, how much money I have earned and plan to earn in a year.
“It’s bureaucracy, the power of a piece of paper,” I remarked.
– It’s easier for me. We have a rule that we do not take paper media out of the office, do not use drafts, and destroy all unnecessary documents with a shredder. And everyone does exactly that. The word rules people. I don’t need to explain it to everyone.
Don’t standards limit creativity?
— And what about creative positions? For example, in the field of IT? I asked. — It is difficult to write down every step in creative work.
“There are routine procedures in any profession,” he objected. — A specialist knows how long a specific task takes, and knows where he can relax and where he can tense up. This helps him work more efficiently, even in creative professions.
Standards as a “collection point”.
At that time, I had been training personnel of fuel companies and airlines for more than ten years, where processes are standardized down to the smallest details. But it was after this conversation that I realized the importance of standards as a management method. Standards have become a “gathering point” for business: they establish order, help avoid misunderstandings, and simplify decision-making.
This conversation gave me a new perspective on standards, so I decided to share it with you.

Andriy Kopylov
Head of the Standards Committee of the “Fuel and Energy Business” Association