Every scale-up needs its own business operating system. However, we’re not talking Windows or iOS – rather the kind of joined-up thinking used by Lego, Toyota and Audi.
As a business leader, how often do you step back and examine how your company operates?
Has it grown organically, with new departments added piecemeal, as needed, each one with its own way of doing things?
Have staff just adopted tasks they think they should carry out, and has their role expanded beyond their abilities as the demands of the business have increased?
Are key decisions put off? Do the same problems pop up time and again?
Is the business becoming too complex and unwieldy?
And does this mean that key tasks don’t get done, you don’t feel like you know what’s going on, and it feels like you don’t have complete control over the business?
Losing control of your business
These kinds of issues often crop up in businesses that are growing fast. Some staff may have been over-promoted or be working in roles where they don’t perform at their best, there are no clearly documented methods so everyone does things differently, and there may be a lack of accountability.
If all this sounds familiar, it may be time to shake up how you run the business and introduce some order into the chaos in the form of a business operating system.
Just to be clear, when I say operating system, I’m not talking about new technology – some new kind of dashboard to help you track your KPIs and data, but a complete framework around which you run your business.
This will establish a common structure, principles and practices, and introduce a standard set of business processes which will drive forward the strategic development of the business and how this is to be executed.
Many businesses find that an operating system becomes the key driver of performance and can persuade both investors and prospective employees that your businesses is the right one for them.
Multinationals such as Lego, Toyota, Boeing and Audi have developed their own operating systems, but you don’t have to be a giant, listed company to use one.
I realised it was important to find a way to systemise my business and keep track of what was happening when I was building and scaling a multimillion-pound retail business in three countries, over a period of 14 years.
However, any business, however small, will benefit from introducing a standard way of operating which ensures that things don’t fall down the cracks.
A tiny example: one training business I know didn’t send out a standard booking form setting out their terms and conditions after clients had confirmed a training course. A client cancelled at the last minute and the business was left with an expensive bill to cancel a venue which the client refused to pay.
Now they have a set procedure which involves sending out a standard booking form, which clearly states the cancellation terms, so they are protected if a client cancels at the last minute.
Key features of business operating systems
Establishing, documenting and training the set processes which are needed to run your business is just one feature that most operating systems have in common.
- Establishing a clear vision for the future of the business
- Regular strategic reviews
- Setting regular, measurable goals for your team
- Collecting regular data about your business
- Having a standard way of assessing your people
- Having a procedure for dealing with issues
There are many different operating systems to choose from, and several different ways to simplify your strategic plan in one or two-page documents.
If you are considering using one, it is best to do your research, look at the testimonials and results, decide which one is right for your business.
How to choose the right operating system
Based on experience, try to use multiple operating systems just makes the business more complex. You should select one that fits your business and that you and your leadership team buy into. When you choose the right one, it can completely transform how the business operates from top to bottom.
The one that I help businesses introduce is the Entrepreneurial Operating System® (EOS®), which is used in over 100,000 businesses worldwide. It aims to help businesses align around a common vision, gain more traction and build a healthy leadership team. It concentrates on six key elements which every business have in common: vision, people, data, issues, process and traction.
A series of tools and process are introduced and then rolled out over a period of two years, with the help of an “implementer” like me. The beauty of EOS is that it can be customised to your specific needs, so it becomes your unique way of working.
It originated in the USA and was created by an entrepreneur Gino Wickman, who describes it in his bestselling book Traction.
Benefits of an operating system
Whichever operating system you choose, when you implement it effectively, it should grow with your business and transcend the people who are doing and managing the work.
Here are some of the key benefits:
- You will have a clear vision of where the business is going, and how you are going to execute on that vision
- Regular strategic reviews on a quarterly basis to stay focused on the vision and execute better
- You will build a team who match your culture, share your vision, and are clear about their responsibilities
- Accountability and consistency are increased, so your business runs more efficiently day to day
- There is transparency and better communication throughout the organisation, and meetings become more productive
Typically, the impact on a business is greater control, better results and increased profit. One technology business I worked with was losing £600,000 a year; after running EOS for 20 months it was making a half million pound profit.
An operating system makes a company easier to lead and manage, which in turn, gives founders and owners a better work-life balance.
We help businesses implement the Entrepreneurial Operating System. To find out more about how it could work in your company, contact us.
*This article first appeared in Growth Business.