Every entrepreneur wants to grow their company.  They want to be on the Inc. 500|5000 lists all the way to the Fortune 500.  We all dream of building a stable, yet ever growing organization.  In order to accomplish that, you’ll need to build a system that allows you to scale and grow your business automatically.  What you need is a business operating system.

Predictable Revenue Growth Is The Key To Long-Term Success

When my brother and I first started our company we grew from the two of us to over 23 people in the first 6-months in business. We were on pace to hit over $3.5 million in revenue in year one.  You may be thinking, “wow that’s fantastic!” But what a disaster!

We were running a professional services business in the pharmaceutical industry and were completely bootstrapping with less than $2,000 in the bank.  This super fast growth was not sustainable.  We had to learn how to grow in a controlled manner without being held back by cash flow and people issues.

Over time, we cobbled together a business operating system that allowed us to make the Inc. 500|5000 list 9 times with 3 different companies, exit the day-to-day of the business, take our personal income 8x, and create tremendous freedom in our personal and professional lives.

This article is intended to help entrepreneurs scale and grow their businesses without all the experimentation and failures that my brother and I experienced along our entrepreneurial journey.  This is a description of a complete business operating system that will allow you to create a business that will scale and grow infinitely.

What The Heck Is A Business Operating System?

A Business Operating System (BOS) is a complete set of processes that allow you to grow your revenue quickly, and build a solid, well-run organization.  A Business Operating System is a collection of tools and processes that are used throughout the organization as your standard way of doing things.  It defines how your business operates.  How it goes to market.  How it produces or delivers your product.  How you deal with your customers.  Ultimately, it’s your systematic way for growing your business.

An effective Business Operating System transcends the founders, owners and leadership team.  It allows you to build a self managing business that operates without you.   A business operating system enables you to break through the ceiling and scale to the next level.

Why Do I Want A Business Operating System?

Companies seek out a business operating system when they start hitting the ceiling.  Where things that used to work are no longer effective.  You’ve reached a certain degree of success through hustle and sheer force of will.  You start to burn out, you no longer have enough time to grow like you want to.  You start to fear you won’t achieve your goals.

As your organization grows, things start to become more and more complex.  You don’t have the right people, the right structure, or access to the data you need to make good decisions.  When you were doing things by yourself, your customers were happy, but now, your employees can’t execute “your way”. You have a ton of issues in your business but rarely do they get solved.  Most of the time, you don’t have enough time to even think about strategy.  Just execute, execute all day long.

You’d love to have processes documented, but you are pretty sure there will never be enough time and hope to hire people who get it from day 1.

Most people seeking a business operating system, run poor meetings with their team.  They are slow, boring, and mostly ineffective.  You would do the work yourself if it was possible, it would be better than meeting with your team.

You probably don’t have any real quarterly goals, you just want more than last year.

Winston Churchill on the Value of a Business Operating System

For the first 25 years of my life I wanted freedom. For the next 25 years I wanted order. For the next 25 years I realized that order is freedom.

A business operating system will provide you with the order and the freedom that you are so desperately seeking.

The Six Most Common Reasons to Implement a Business Operating System

Here are the six most common reasons people start looking for a business operating system:

  1. Lack of Control: Very little control over your time.  There just isn’t enough.  You’ve research and have tried every productivity tool and method there is.  While, you achieve incremental gains your business still controls your life.
  2. People: You can’t seem to find the right people for your team.  No one is accountable to their results like you are.  Employees are punching a clock while you work 90 hours a week.  Your customers are a pain in the neck and you wish you could fire most of them.  But if you did, you’d lose the profit and revenue you want.
  3. Profit and Cash Flow: You work very hard on your business, but the profit doesn’t seem to fit the effort your putting in.  You constantly worry about cash flow to fund growth, pay the bills and save for college tuitions.
  4. Fear That You’ve Hit the Ceiling: Growth used to be much easier.  You used to be able to add customers and revenue at will.  Now, you fear that you are tapped out.  Maybe you’ve reached the limits of your market.  You know something has to change to grow fast again.
  5. You’ve Tried it All: You belong to peer groups, you’ve watched countless YouTube videos on how to run a better business but nothing seems to stick. Your team groans every time you have a new idea about how to grow and have a better business.
  6. Your Vision Is Not Shared By All: Your vision is not shared by the team.  It seems like everyone is doing their own thing, not rowing in the same direction.  You dream of the day where your team “gets it” and start to help you really execute.

organizational checkup

What a Business Operating System Does

Companies that implement a complete business operating system, have the ability to break through the ceiling and scale their businesses.  The owners have a complete sense of control over the business.  They are happier, the customer experience is better, and their internal operations are consistent.

Most companies with an operating system are able to hire people they love working with.  They can solve their issues for the long-term great good.  The owners of the business start to see the fruits of their labor and start getting profits.  The business is self-sustaining above and beyond the entrepreneur.  It starts to take a life of its own.

A Great Business Operating System Addresses Six Key Areas

There are many ways to implement an operating system into your business.  You can create your own, you can self-implement one of the well known systems, or you can hire a business coach or consultant to help.  Regardless of what method or operating system you choose, they must address these six key areas:

  1. Vision Getting clear on your vision, and getting all your people 100% on the same page
  2. People Getting all the right people on the bus, and putting them in the right seats
  3. Data Managing your business on the data with a scorecard that you review weekly
  4. IssuesA process for smoking out your issues, as in a S.W.O.T, and solving them
  5. Process Documenting all your processes and getting everyone trained and following them
  6. Execution A systematic way to make sure your plan is on track with meetings and quarterly goals

What are Some Examples of Operating Systems?

Here are some examples of business operating systems:

When we were determining what business operating system to implement in our business we were attracted to The Entrepreneurial Operating System (EOS), because it hit all six areas with the differentiator being team health.  We need to get our vision 100% shared by everyone.  In addition, we needed to drive accountability while, moving as a healthy cohesive team.  Who wants to run a business by brute force?

The Entrepreneurial Operating System (EOS)

The Entrepreneurial Operating System is a business operating system that is holistic and complete.  It will help you and your leadership team get 100% on the same page with your vision, where you are going and how you will get there.

The system will help you drive discipline, accountability, and habit necessary to execute on every aspect of your vision.  In addition, the processes in EOS will help you become a very healthy, cohesive and functional team.

Strengthen The Six Key Components

In addition, EOS is designed to strengthen The Six Key Components™ of your business.  By implementing EOS, you will get to 80% strong or better in each of these areas. There are very specific tools used in The EOS Process™.

The first tool is a 2-Page Strategic Plan call The Vision/Traction Organizer™.  This is used in getting your people 100% on the same page with your vision.

Next, we use The Accountability Chart™ and your Core Values to determine the right people in the right seats.

The third component is Data, and creating a scorecard at every level of the business and every one getting a number.  Reviewing the numbers weekly with your team.

The fourth component is the Issues component.  The first step is to have every department carry an Issues List.  These lists are invaluable.  Once you have the list, you need to Identify, Discuss and Solve each issues in order of priority.

The fifth component is process.  This is simply identifying you Core Processes and getting them followed by everyone in the organization.

Lastly, is the Traction® component.  This is getting everyone in the business in a weekly meeting reviewing their Rocks, Scorecard, completing To-Do’s and solving your issues.

Creating Your Company’s Business Operating System

The Kauffman Foundation has a series of videos dedicated to growing your business.  Matt Blumberg,  Chairman & CEO of Return Path, Inc., is the featured entrepreneur describing the value and importance of a Business Operating System: