What is a Business Operating System and Why You Need One

What is a Business Operating System and Why You Need One

A Business Operating System (B.O.S) is the way that you run your business. To be able to replicate how things get done in the business and to ensure predictable and consistent results, you need to capture it all somewhere. Rather than scattered knowledge, you need one central depository, a place where what you need is easy to find, and it’s safe, that place is your B.O.S but, it’s so much more, read on.

For a clear example of a B.O.S, we can look at the franchise business model. Franchised businesses are more likely to survive than any other type of business; for that reason, we can learn a lot from them.

What makes franchises so successful? The benefits of a franchise include strong brand recognition nationally and internationally, faster pathways to growth and a proven business operating model. There are three key points of difference that a franchise business has over a non-franchised business. And these differences are:

  • An established business model
  • A proven profit plan
  • Financial arrangements

Of these three differences, the established business model/system is the one that sets them apart from most other businesses. This system of how a business operates in its own unique way is what I call a Business Operating System.

The B.O.S or often referred to as the Operations Manual holds everything that the franchisees will follow to operate their business. In creating a turnkey business, the B.O.S holds the magic sauce and ensures that the business is conducted consistently to the standards required. In essence, the B.O.S is a structure of information and a step by step guide for running the business.

The B.O.S is a structure of information and a step by step guide for running the business.

 

Most small businesses struggle to grow because they do not have any clear guidelines or processes for how they operate. As well as slow growth, they are often faced with daily frustrations, time-wasting, unhappy customers and no clear point of reference or training for the team.

 

What Benefit are There to Having a B.O.S?

Business can become chaotic after a while. As we take on more work and more staff, we have to develop policies, procedures, tools and define what we need to do to keep the business moving. We rarely have time to stop and analyse if what we are doing is the best way and we certainly don’t get time to write it down. So we end up being frustrated and working in a constant reactive mode. Having a central repository for everything that we have developed over time means that we can easily find what we need, and all the methods for how we operate have all been agreed. All the hard work has already been done; we are not inventing as we go along. There are so many benefits to having a B.O.S; I’ve listed the most common ones here:

1. How Things Get Done Our Way

For example:

  • How sales are made
  • How widgets are made
  • How the widgets are delivered to the customer
  • How supplies are ordered
  • How new team members are recruited
  • How customer we deal with complaints

2. A Training Resource

For example:

  • To get new employees up and running fast
  • Re-train existing staff
  • To test knowledge

3. Time Saving

  • Finding information rather than asking managers and team members
  • Proven processes save time instead of reinventing the wheel every time
  • The business becomes scalable – the same processes can be implemented on a larger scale at other locations

4. Reduces Liability

  • Documented standard operating procedures help prevent problems
  • Compliance with regulations and safety measures

5. Adds Value

  • A business with a well documented B.O.S is more valuable than a business without a B.O.S.
  • A business that can operate without you

A business with a well documented B.O.S is more valuable than a business without a B.O.S

 

Creating a B.O.S. means the business owner has peace of mind knowing that the business can run effectively, consistently, make sales and deliver the product or service without the business owner micromanaging every part of the business.

To create an effective B.O.S requires a mindset shift. The business becomes that product, a product that can be replicated. The way your business operates becomes the main selling point rather than the actual product you produce or the service you deliver. Think of McDonald’s, for example, are they most well known for their burgers or their operating system? The McDonald’s product–its business operating system–is undoubtedly one of the best.

 

 

What Makes for The Successful Implementation of a B.O.S.?

To discover what makes for the successful implementation of a B.O.S., let’s first find out how it can fail. Some businesses have tried and failed at creating and rolling out a version of a B.O.S. with less than desirable results.

One reason is that the B.O.S. was pieced together without a whole lot of forward planning and was the B.O.S. itself was expected to miraculously do all the work and have everyone harmoniously using the B.O.S. from day one. In reality, this doesn’t happen.

Another reason for failure is that there were missing components of the B.O.S, the very elements that make up the secret sauce and set your B.O.S apart for just another dusty old operations manual. Those components are the same things that set great companies apart from their competition. Some famous companies that achieve outstanding results and create great places to work are Southwest Airlines and Salesforce, to name a few. On closer inspection, it appears that their success is less about incredibly innovative practices or profit statements and all about the smallest but most impactful details.

Great businesses create and reinforce a rigorous discipline about the small things that affect their customers and their team. They have instilled discipline in the way that they work, and this is reinforced through their culture. The B.O.S is the guiding light, the one point of truth and the secret sauce. The B.O.S takes on life and enables the business to be sustainable over time, making it about the way you do business rather than just a set of pointless procedures.

 

The Elements of Your Business Operating System

It is important to build your B.O.S in sections covering everything necessary to convey your unique brand and way of working. Your B.O.S is never finished; it’s a living system that evolves as the business grows. The sections are separate for ease of consumption; however, they are interrelated.

Critical Elements of your B.O.S:

  1. Systems and processes
  2. Your people
  3. Culture and company information
  4. Knowledge
  5. Training

 

1. Systems and Processes

Systems can be both hard and soft systems including, finance, sales, marketing, technical, operations and people. Systems for people, for example, can include how you enhance their effectiveness and how you select talented staff. A sales system includes your system for prospecting, qualifying, quoting and closing business.

Processes can be a combination of guidelines, checklists and step by step instructions. Written processes and procedures convey how you want things done to achieve consistent results. Written processes should be clear, concise, replicable, and leave no room for ambiguity. If you don’t include essential components in your documentation, such as when and how something should be done, you leave the business open to risk.

Your systems and processes should be written for the lowest common denominator, so they are not dependent on your key people. To avoid the risk of only one person knowing how to run a process, cross-training between the team is vital and easy to implement using the B.O.S.

Cross-training between the team is vital and easy to implement using the B.O.S.

 

2. Your People

Your B.O.S. needs a section dedicated to your people. This section is often referred to as your H.R. Department. It’s important to define what is H.R. related to your people and what is H.R. management. Both have their place but accessible at different levels. Your team H.R. competent will hold all the information regarding their employment conditions such as codes of conduct, mobile phone policy and how to apply for leave. Your team should be able to access all the information they require to comply with the company’s working conditions. Having this type of documentation in one place reduces the dependency on the H.R. department and managers to answer questions

Your H.R. management components will include your systems for recruitment, payroll and managing leave applications. A lot of time and effort goes into defining clear roles within the business; your B.O.S. is the place where you can keep a record of job descriptions that have been developed along with the key performance indicators for each role.

3. Culture and Company Information

Your culture component covers all the general information about the company and it’s direction and purpose. Here are some examples:

Company Information:

  • Target markets
  • Products or service offerings
  • Industry overview
  • Hour of operation
  • Routines
  • Contact details
  • Emergency procedures

Cultural Elements:

  • The vision and mission statements
  • The purpose behind the business
  • The founder and CEO message
  • Core values
  • Operating principles
  • Business goals

The culture section provides the opportunity to showcase the business as you want, it also provides a great first impression to new staff. It’s a good idea to get new team members into the B.O.S as soon as they start to get them up to speed and immersed in the culture from the beginning.

4. Knowledge Base

As mentioned before, your B.O.S. becomes your one central point of reference in the business. Too often I see businesses that have scattered documents all over individual’s computers, on desktops, in drawers or in jumbled cloud storage folders. I’m not advocating only one storage depository for documents but certainty reducing the number of places to find something is a huge time saver, and everyone can access what they need quickly. Your B.O.S can become your knowledge base for the knowledge you capture in the business daily. For example, if you are a software development business, you most likely solve problems every day. If you are a car service and repair business, you most likely also come across problems that you solve regularly. What if you could capture this knowledge so that if that same situation arises again, you have a central repository to refer to and that other team members can access. Image the hours that you could save by finding the answers by simply searching an index. By regularly contributing to the knowledge base, you are at less risk of someone leaving and taking all the knowledge with them.

Your B.O.S can become your knowledge base for the knowledge you capture in the business daily.

 

5. Training

Your B.O.S. can also become your source of training depending on what online platform you decide to use. As a light option, you can assign process documentation to be reviewed inside the B.O.S. or for an alternative, and your B.O.S. can also feature a learning management system (L.M.S.). The difference between the options is that without the learning management side of things, your process or training documentation is static meaning it’s just read-only. An L.M.S. allows your team to complete a training module, track their progress and test their knowledge. One such tool that I recommend as a B.O.S. and L.M.S. combined is Trainual.

Ideas for Training Modules

  • Onboarding checklist/getting started
  • Processes as required
  • Work health and safety
  • Reading and understanding the Employee Handbook including workplace policy and procedures
  • Software systems and how to use them
  • How to use tools and equipment

When it comes to training, you can let your imagination go. Engagement is key when it comes to training, and having your team follow processes and procedures. For some great tips on ways to capture processes and create excellent training, read The Quick and Easy Way To Capture Your Business Processes.

 

Summary

Your B.O.S. will provide discipline and structure to the business. Structure creates freedom, the type of freedom that allows you to work on your business rather than in it.
In my next article, we’ll talk about ideas and inspiration for naming your B.O.S.

Structure creates freedom, the type of freedom that allows you to work on your business rather than in it.

 

If you would like to learn more about how I can help you to implement a B.O.S. in your business, get in touch with me. Book a Systems Success Call and let’s see what’s possible.