A 5 Point Checklist to Developing a Business Operating System

a 5 point checklist to developing a business operating system

Many small businesses are struggling to compete with larger conglomerates and franchises. Though most people enjoy the unique quality of service offered by mom-and-pop shops, this affection doesn't always translate into increased revenue or growth.

There is a reason why larger organizations continue to thrive while many smaller ones cannot, even though some feel large franchises come across as bland and impersonal.

Corporations often implement a business operating system that defines all of the various roles, processes, and technologies systemized throughout all of their locations. Although this standardization of workflow processes comes across as impersonal, it is the backbone that allows large businesses to dominate the market.

Smaller businesses who want to expand might benefit from implementing their own business operating system. Creating a systemized approach to running the business will help improve workforce morale, organize the supply chain, and increase revenue.

Read ahead to learn about the components that define an effective BOS, and how to implement one in the workplace.

Tips to Build a Business Operating System

A business operating system help organize how an organization operates, influences decision making, markets products/services, encompasses product development, and handles customer interactions.

Without a BOS, it's difficult for workers to understand their roles or communicate with management to help reach key objectives.

A BOS ensures that everyone in an organization knows what's happening in real-time and understands the primary workflows needed to deliver products/services to customers. Chaotic businesses that struggle with inefficiency, a high turnover rate, and poor communication should consider implementing a business operating system.

In summary, building business operating infrastructure-

  • Provides a guide for the leadership team to understand what everyone's roles are.
  • Provides a framework that allows management to be on the same page and develop a set of standardized objectives.
  • Streamlines workflows and minimizes inefficiencies and bottlenecks to improve business processes in the long term.
  • Encourages open-communication and dialogue between different stakeholders and employees.
If an organization is struggling to meet deadlines and manage team members, it's probably time to implement a BOS. To start, prioritize the following 5 components of a BOS in this order of importance-

1. Processes

A work process is a written document that explains how to perform a job or task in an organization. Unfinished work processes can cause numerous problems, particularly if the economy is not performing well.In addition to organizing everyday tasks and projects, a BOS should also discuss policies on worker-management dialogue and resolving problems.

A business operating system company should focus on fixing the inefficiencies within the current processes before implementing a brand new process. Efficient processes are understandable, replicable, recorded, handled by a BI solution, and easy to share.

2. Systems

The systems element encompasses all of the technologies, financial tools, marketing tools, and human resource related tools.

These systems can include accounting databases, human resource management systems, performance management systems, or other marketing-related databases.

Intuitive and user-friendly systems can collect, manage, and track employee and customer data. They also help to improve operational efficiency by automating menial tasks so workers can focus on other aspects of their jobs.

3. Roles

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If workers aren't sure what their exact roles are in the organization, it will be difficult to achieve operational effectiveness.

Consider looking over everyone's job descriptions and see if they include all of the various tasks and projects needed to meet key goals.

Focus on the role rather than the individual who occupies it, as that may change at any moment. Pre-defined job descriptions will help managers make better decisions about what a worker should be doing every day and how much extra labor is needed to complete the necessary roles.

When revising role descriptions, remember to consider how each role helps fulfill the company's mission.

4. Skills

Now that the roles are clearly defined, it's time to document the skills required for each role. If there are efficient processes and systems implemented, it will be easy to make certain that talent is being used wisely.

Make sure that processes and systems are intuitive enough for everyone to use so the business isn't forced to put their most productive and talented employees in charge of those technologies.

Carefully match the person with skills applicable to the defined roles, remembering to take the employee's style into consideration. Putting people in the correct roles ensures a more productive, happier workforce that can achieve operational efficiency.

5. Structure

Developing the organizational structure requires taking all of the previous elements of the business operating system into consideration. If a structure is created before processes, the processes will have to fit into the pre-ordained structure.

This minimizes the ability to be flexible and meet the needs of both the customers and the business. If the company has thoroughly defined the other four steps, they shouldn't have to do much to finalize the structure.

The structure will come as a result of implementing the various processes, systems, roles, and skills needed to run the organization.

Key Takeaways

In conclusion, here are the key takeaways to remember about developing a business operating system-

  • The BOS organizes the way an organization functions, markets products/services, produces good, and delivers a value proposition to customers and stakeholders.
  • Chaotic businesses with underdeveloped business operating systems have a high turnover rate, inefficiencies, and wasted resources.
  • An effective BOS provides a guide to leadership regarding roles, gives a framework to employees and managers about meeting key objectives, streamlines workflows, minimizes inefficiencies, and encourages open-communication between all involved stakeholders.
  • The five components of a BOS include processes, systems, roles, skills, and structure.
  • If processes, systems, roles, and skills are developed, then the structure should develop naturally as a result.