When SOP's Go Awry

In a former life, I worked for a really great, really fun, really SMALL company that produced and sold luxury products to a very niche, but very viable, market segment. As often happens, this small company was acquired by a larger manufacturing company. Same general industry, but vastly different sectors, and from Day 1, things started to fall apart.

The new company didn't understand the customers, they certainly didn't understand the products, and most crucial of all, they weren't willing to deviate from their established processes. Instead, they tried to jam this new product line into the crayon box of tried and true (for them) "standard operating practices".. and they failed - OH SO very miserably. Stock-outs became the norm, customer confidence tanked, and eventually what had been a really amazing opportunity faded into obscurity.

So. Much. Lost. Potential... So. Much. Waste. It was heartbreaking watching the customers cycle through confusion, frustration, betrayal and ultimately leaving for other suppliers who would and could meet their needs, because they tried to force 100% assimilation, whether it was a good fit or not.

This happens a lot, and it's often with the best intentions. After all, business classes regale us with the beauty of economy of scale and harmonization and standard processes and all these amazing concepts... and we forget that they're paradigms, not laws. Common sense still needs to come out to play. Adding unfamiliar products, whether you develop them yourself or get them through a business deal with an existing supplier, can be super complicated, especially if your decision makers aren't as familiar with the new space (Are there different laws? How about market conditions? What do you mean your products are boxed in multi-unit sets?! Our system can't handle that!)

If you're a crayon company and you decide you're going to add pens to your product offerings, that's cool. You can do that, and you can do it with extraordinary success, but you can't do it if you're going to treat the Pen unit like the Crayon Unit in every single business process. You are going to have to get comfortable with possibly having "separate but equally fit for purpose" standards in your organization. Otherwise, you're going to be cramming pens into crayon boxes and screwing them both up along the way. (that's metaphor, but also in some cases literal!)

Another company I worked at, a job shop, made parts for a wide variety of customers. Precision parts, less precise parts, some for the food industry, some for the auto industry, and so on. You get the idea. LOTS of diversity! They recognized that the needs of the customers (and the processes for the parts themselves) were really different, and they established almost completely separate parallel work flows. They continue to have great success, decades later. Was it easy? No. Did the investment they'd made in acquiring the contract for the new, different products make it worthwhile? Yep.

It's probably good to consider how your internal processes may need to shift, morph or even be completely rewritten while you're in the middle of negotiations, but if that slips through the cracks, you're not doing yourself any favours ignoring the challenges - they will fester.

This isn't just true for widget-makers, either. Whether it's business units that operate in different countries or services targeted to different demographics or WHATEVER, ensure that you're taking a critical look at your "best practices" and making sure they're not doing you more harm than good in your new space!

Obviously it's good to standardize where you can and where it makes sense to do so. Having double the HR personnel or completely segregated sales folks just because you've got different stuff going on isn't necessarily always the best option... unless it IS, and if it is, it makes sense to evaluate and adapt. After all, you're company is growing, and that almost always means change. I mean, maybe your widget salespeople just don't understand, or deal with the same purchasers, as your whatsit account managers. That's OK!

So congratulations! You've diversified! Complexity isn't bad unless you try to pretend it doesn't exist, and please, whatever you do, don't assume that having the same processes is the same as having the right processes. Not sure if you've got it right? Try asking the people in the trenches - I bet they have some valuable insights!