Professionally managed direct sales companies have documents that combine policies, processes, rules and regulations. They use these in dealing with the independent direct sellers and for its employees to work in harmony. They are generally called “policies and procedures” or “P&P”, for short.
The “policies” part of this document brings together a collection of guidelines for tackling various issues. “Procedures” are more specific in nature and describe the actions to be taken for carrying out a certain policy. Procedures, in other words, show all related parties how to act in various cases. As such, policies and procedures are closely interrelated.
Benefits of Having a P&P Document (In no particular order of importance):
- Provides a general picture of company values and culture
- Communicates responsibilities
- Brings uniformity to dealing with situations
- Enhances equality, builds trust
- Educates all parties involved, minimizing compliance issues
- Increases efficiency within the organization
- Reduces managerial “trial and errors”
- Enables controlling by exception rather than “micro-managing”
- Allows to guide without constantly intervening
- Channels management time to more productive tasks
- Ensures organization’s compliance with regulations
- Helps boost professional corporate image
Content
So, how should a P&P document look like? It should have certain essential parts, then the rest – length, wording etc., depends on managerial choices. As the examples at the end of the article show, there are various approaches to this. But the basic components of a P&P are:
- Purpose of the document
- List of terms used and definitions
- Explanations of policy and procedure items
- Clarifications on “acceptables” and “unacceptables“
- Consequences of non-compliance
Once the policies and procedures have been in place, then there are three more tasks to be carried out that are of equal importance: 1) Communicating the P&P, 2) enforcing, and 3) amending it as necessary.
Communication
Brett Duncan, Co-Founder and Managing Partner of Strategic Choice Partners, states in his article Trust and Communication: The Foundation of Success in Direct Sales, “Both success and failure are directly linked to the level of trust a company has established and the effectiveness of their communication.” This proposition is more than valid in the implementation of company policies and procedures.
It should always be remembered that this whole P&P content is to protect everybody’s rights including direct sellers’. A P&P document also safeguards company’s, employees and again, direct sellers’ business interests.
It is critically important that this document should be easily accessible and made clearly understood by all parties. Most importantly, by that company’s independent direct sellers.
Enforcement
A P&P document can only fully serve its purpose if it is strictly enforced in absolute fairness. Otherwise, it just as successfully serves to create mistrust. And trying to regain lost trust is always much more costly and painful.
Disciplining a field leader who steps out of the line may give a short-term damage to company’s business. Yet many times, long-term gains are priceless.
Experience has shown in numerous occasions that absolute fairness in enforcing the rules increases the total level of compliance, as well.
Amendments
A policies and procedures document will need to be amended in time. This is inevitable. As the business or the industry evolves, the requirements may change. Thus, the P&P must adapt with them.
Frequent changes must be avoided though, in order not to damage the whole trust and the positive reputation that have been built till then.
And each revision must be communicated well to make sure the whole purpose and the nature of the amendment is plainly understood.
Lastly
Some people tend to think policies and procedures create unnecessary bureaucracy. Some others even find them as barriers to company growth. For example, Netflix Co-Founder Reed Hastings in the famous best-seller No Rules Rules says, “Real life is so much more nuanced than any policy could ever address.” True… but an optimum solution is absolutely possible to achieve.
Whether it is a small or a medium size company or a corporate giant, having formal policies and procedures helps managers run their companies much more smoothly and efficiently. Moreover, a direct selling environment has many unique characteristics that require having a P&P.
Examples
Below I have put together several direct selling companies’ P&P documents for you to review and compare various approaches:
Amare, Amway, doTERRA, Farmasi, Forever Living, Herbalife, Jeunesse Global, MONAT Global, Nature’s Sunshine, Nu Skin, OPTAVIA, The Avon Company, Unicity, USANA , Young Living
…..
Hakki Ozmorali is the Founder of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki Ozmorali is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
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