Why documented processes, HR systems, and talent retention build long-term value.
By Rich Cruz, MS, SHRM-CP
Organizational Consultant | Co-Founder, Harmonious Workplaces
When I worked in lockstep with the laundry business community between 2017 and 2021, I met hundreds of owners, many of whom had big ideas to expand and grow their multi-store empires. In the years that followed, many of those same owners who committed themselves and their resources accomplished just that – their own portfolio of successful stores. Today, some of those owners have set their sights on a new vision: to sell and retire.
In today’s changing labor landscape, laundry business owners face more than rising utility costs, equipment maintenance and customer satisfaction. They must also face preserving their most critical asset: knowledge. Whether a business owner plans to pass their laundry business to the next generation, expand to new locations, or attract private equity interest, committing to systematizing their operation must be a priority. Future-proofing a business requires more than well-functioning equipment; it demands a high-functioning organization with an efficient and effective structure.
From an organizational effectiveness standpoint, aligning your people, processes and strategy determines how well your business can scale, endure or sell. And that effectiveness hinges on three key pillars:
- Documented processes
- Human Resources (HR) systems and documentation
- Talent retention and development
Let’s explore how these pillars protect and enhance the value of your business, primarily through the lenses of organizational design and development – two disciplines often overlooked in small and mid-sized operations, but critical for sustainable growth.
Documented Processes = Intellectual Capital
Futurist and quantum physicist Michio Kaku stated that he sees the currency of the future stemming from intellectual capital. From a business standpoint, that value stems from an organization’s unique and replicable operational structures. In organizational design, structure follows strategy. But what happens when no one can articulate the structure, or when the structure depends on a few key people who may retire or leave?
This illustrates the risk of institutional knowledge loss. A 2022 study by the Brookings Institution found that 10,000 Baby Boomers retire daily in the United States. In service industries like laundromats, where operational know-how comes from tacit knowledge (informal and experiential), these departures represent a loss of intellectual capital (Davenport & Prusak, 1998). When knowledge walks out the door, so does value.
Therefore, business owners should not perceive documenting your standard operating procedures as a chore or expense of time and materials. Instead, think about it as a strategic move. Standard operating procedures, workflows, job aids, and checklists act as knowledge repositories. They ensure that what works today can continue to work tomorrow, even if your key employee leaves.
Case Insight
In a recent organizational effectiveness project for a manufacturer preparing for a major systems transition, we documented over 150 workflows. Most had processes previously communicated verbally or jotted in notebooks informally by department heads or incumbent workers. When veteran employees left during the project, those documents became essential, but workers who inherited the work struggled to decode and understand the jargon and notes. With the newer ratified and tested documents, training new hires took less time and reduced errors in complex production cycles.
For laundry owners, imagine applying the same principle to:
- Opening/closing procedures
- Equipment maintenance
- Vendor ordering
- Cash handling and reconciliation
- Customer issue resolution
Not only does this ease training and reduce risk, but it also enhances your business valuation by converting human know-how into organizational assets.
HR Systems and Documentation Build Consistency, Compliance and Culture
Human resources (HR) management does not apply solely to large companies. In fact, the smaller the team, the more critical it becomes for companies to have solid HR foundations in place. Why? Because one bad hire or one disengaged employee can affect your entire operation, often forcing the business owner to move from high-level working “on” the business to low-level working “in” the business.
From an organizational development perspective, HR practices support employee engagement, reduce turnover, and promote consistent performance. These elements directly affect service quality and business outcomes.
At a minimum, every laundry business should have:
- Job descriptions
- Employee handbook and policies
- Onboarding and training programs
- Performance expectations and feedback mechanisms
- Documentation for corrective action or discipline
These elements do more than support compliance. They signal professionalism, especially to buyers or partners. A 2020 Deloitte report found that firms with codified HR practices had a 30% higher likelihood of achieving sustained growth over five years than those without them. Furthermore, well-designed HR systems contribute to a psychologically safe culture, where employees feel secure, respected, and engaged. Psychological safety is linked to improved knowledge sharing, innovation and team performance.
Retaining Talent Through Mentorship and Culture
Labor shortages and turnover remain persistent concerns in the laundry industry. Many owners struggle with disengaged employees who seem to lack commitment or motivation. But what if the problem isn’t the people, but the process of developing them?
Employee engagement doesn’t happen by accident. Owners must design and support it intentionally. According to Gallup’s State of the American Workplace report, managers account for 70% of the variance in team engagement. Leveraging incumbent workers as mentors for new hires remains one of the most overlooked strategies in laundry businesses.
Here’s what we know from psychology and organizational development:
- Older workers (typically 40+) are in Erik Erikson’s stage of Generativity vs. Stagnation. They want to pass on knowledge and feel that their experience matters.
- Younger workers (18–39) are in the stage of Intimacy versus Isolation, seeking belonging and relationships in the workplace.
Creating a knowledge-sharing system between these two groups improves retention and reinforces your company’s values. It also improves efficiency, as new hires are brought up to speed faster and with more context.
Recommendations:
- Train-the-Trainer programs to teach experienced workers how to mentor others
- Recognition systems that reward knowledge-sharing
- Employee surveys to capture sentiment and spot disengagement before it leads to attrition
- SMART goal-setting so employees can chart their development path
This approach aligns with Kirkpatrick’s New World training model (about which I wrote in the January 2024 issue of PlanetLaundry magazine: https://planetlaundry.com/creating-a-culture-of-learning-and-development/), which emphasizes behavioral change as the primary goal. The mere presence of training doesn’t define outcomes, it should lead to better on-the-job performance.
Enhancing Organizational Effectiveness with Purpose and Planning
Ultimately, documented processes, HR systems and engaged employees are levers of organizational effectiveness. They help answer questions like:
- Can our business withstand change?
- Can we expand to new markets or locations?
- Are we positioned to attract buyers, partners or successors?
Whether your exit plan includes scaling, selling or building a generational legacy, these elements directly affect your company’s market readiness.
Start with a quick assessment:
- Do you have processes written down, or just in someone’s head?
- Do you have documented and consistently followed HR policies?
- How do you capture knowledge from experienced workers?
- Do your newer employees feel supported and committed?
If your answers are inconsistent or lack clarity, start changing now.
A Call to Action: Build Today for Tomorrow’s Success
No one knows your business better than you do. But that won’t always be the case. Owners eventually retire. Employees come and go. Markets evolve.
Future-proofing your laundry business means investing in organizational infrastructure, not just machines or software, but the people, systems and knowledge assets that drive daily performance.
You don’t need to overhaul everything at once. Start with one standard operating procedure. Write a job description. Talk to your longest-tenured employee and ask, “What do you wish every new person knew?” You can also partner with a company to help you do this quickly, effectively and efficiently.
Then keep going.
Because the best time to build a resilient, valuable business was yesterday; the next best time is today.
About the Author:
Rich Cruz, MS, SHRM-CP, serves as a consultant, educator, and co-founder of Harmonious Workplaces, specializing in Organizational Development and Change Leadership. He has helped small and mid-sized businesses, especially in manufacturing and service industries, preserve institutional knowledge, streamline operations, and align people with purpose. Learn more at www.harmoniousworkplaces.com.
