What Is A Business Operating System?

Generally, a business operating systems definition is that of a guide developed by business owners that sets out the vision and target of the business, along with the roles of different team members in achieving them. This system helps to create cohesion, promote communication, and enhance productivity by nurturing a harmonious work environment where employees can thrive.

When people think of operating systems, they often think of what is on their computer or laptop. And fair enough: there is some similarity to the computer operating systems.

Just as we rely on operating systems to enable the functionality of our computer hardware, business operating systems help us to run our businesses. Without them, it is very unlikely that your business will function as expected, if at all.

They provide direction and parameters that drive the growth and success of a business. Business operating systems help all team members understand what the business is about and the goals being targeted.

They outline the expectations, processes, and accountability that enable the business to run effectively and efficiently. More specifically, these guides detail the systems, processes, skills, roles and structure of the business. They clearly state the measure of success for the business.

A lack of a business operating system can cause a business to suffer all kinds of problems including internal conflicts between team members and departments, miscommunication, and loose or diverging goals. This can lead to waste of time, resources, and poor performance that can cause a business to fail.

A business can develop its own business operating system from scratch or compile a new one from pieces taken from different systems. They may also work with a single, already established and reliably proven system that meets their needs.

Many franchise businesses rely on this kind of operating system. They operate under already well-documented systems accessed online or via manuals that detail how different processes and the business should be run.

When you properly systemise your business, you will have provided your team with all they need to know to run the business. This will make it easier to delegate responsibilities and have the business operate without the need for close supervision, freeing the business owner to focus more on the direction of the business.

Implementing the business operating system will typically require a flexible and adaptable IT system. This relates not just to the software being used but also to the customisation of applications and systems and training of the people managing them. Note that in introducing a new business operating system, investments will usually be required to support hardware and software upgrades.

Benefits of a business operating system

Direction

Business operating systems help provide direction. Without guidelines as to what the business is about and how it should function, chaos and waste are created. These systems allow for the establishment of procedures, policies and identification of resources needed to enable the business to operate.

There is a single view of success for the business – do this and you are heading in the right direction.

Taking time to capture all this information can help clarify roles, processes, and make for better organisational planning. It also provides a reference guide that the team can refer to whenever they need a reminder of how the business should be run.

For more information on the benefits of systemising your business check out this article.

Improvement

When working in accord with a business operating system, you will need to carry out regular strategic reviews. A range of measurable parameters make it easy to track the performance of business functions and roles.

Monitoring this performance will allow you better identify opportunities for improvement, note mistakes and thus boost performance. Business owners can remain better focused on their vision of the enterprise and how to ensure sustainable growth.

Training

Having a business operating system means that you have a training resource that you can use to easily train up new employees so they quickly learn what their job entails and what the business they are working for is about. It can also be used to retrain existing staff.

Refresher training is vital in helping employees better retain important information and improving their competence and adherence to safety standards while on the job.  The more competent they become at their jobs and the fewer mistakes they make, the higher the productivity that is achieved. It can also help the business to gain a better understanding of whether there are any training or knowledge gaps that need to be addressed.

Efficiency

Accountability and stability can be relied upon when you have a business operating system in place. All players understand their roles and responsibilities. This understanding helps promote consistency which leads to efficiency in the day-to-day operations of the business. By working to agreed standards, team members will be more likely to identify potential improvements in efficiency.Standardisation

Business operating systems are used to document the processes of the business so that different team members have a strong understanding of their role and how it impacts the overall achievement of business goals. Providing employees with standard operating procedures for their roles will help reduce the risk of variations and problems arising. They learn how to stay in compliance with regulations and safety measures, and can keep always refer to the system whenever they have a query.

Replication

Franchise businesses are an excellent example of how having detailed business operating systems can help grow an enterprise. With good, solid systems, you will have documented all the processes related to how the business should be run. With every new franchisee who joins your brand, you’ll be able to transfer the systems so that the operations of each new franchise are easily replicated and matched to each other franchise. The same applies to non-franchised businesses that wish to grow through expanding to new territories, allowing for scalability while maintaining uniformity of purpose and function.

Productivity

When your team has a good grasp of their roles and responsibilities and the processes they need to follow, they can be more proactive in finding ways to boost their performance. This clear understanding promotes transparency which can also encourage more effective communication throughout the organisation. When you have two-way communication and collaboration across roles, every aspect of the business will be more productive and focused.

Central reference

You should expect some degree of chaos if you have your systems captured in various documents scattered across different desks, filing cabinets and computers. Having a business operating system, preferably available online, creates a central point of reference for everyone where they can easily access the information they want without wasting time.

Storing your systems in an intranet or other online central repository helps you promote healthy habits for all employees. They can easily add to the intranet, ensuring that the whole team will have easy access to the data and information so important to the running and growth of your business. Having a single source of truth will also promote consistent performance for existing team members, while also helping new employees to quickly adapt to any changes in their roles.

Profitability

With a well-designed business operating system you will be able to streamline operations. Work tasks will be performed more effectively and efficiently, allowing for costs to be monitored effectively. This will make it easier to identify and assess potential cost reductions and opportunities to boost profits. The increased level of profitability will be directly dependent on the investment made in developing and training the business operating system, together with the ongoing support provided.

With an increased reliance on good systems, the management team will be able to better focus on the profit-making aspects of the business, enhancing productivity and growth opportunities.

Creating a business operating system

As mentioned above, it is possible to develop business operating systems from scratch or draw on several different systems for inspiration. You can also find operating systems online that may suit your business with some degree of customisation. It is always advisable, however, to avoid patching different systems together without adapting them carefully to ensure a good fit with your business. Doing this can make running your business way more complicated.

You need a single operating system that will suit the needs of your business and will attrac buy-in of your team. Making the right choices will ensure genuine adoption of the system and transform how your business operates across the board. Here are the components of every business operating system that you will need to focus on.

1.    Company culture

This is the essential foundation for your business – the fundamentals that everyone you employ should be aware of. It gives them a clear idea of what kind of work atmosphere they will experience and the culture that defines how the business engages with the team and the market in which it operates. Some of the general principles you should clarify for your company, its purpose and direction include:

• Core values
• Company vision, mission and goals
• Purpose of the business
• Operating principles
• Product and service offering
• Industry overview and target market
• Routines

2.    Systems and Processes

There are both hard and soft systems that a business will need. Systems represent the technical aspects of the business needed to complete tasks. Systems are commonly broken down into marketing, sales, delivery (operations), and admin. Admin includes accounts (finance), HR, WHS, IT and legals. Hard systems for people management includes the system for managing payroll and benefits, while a related soft system would cover recruitment practices and performance management procedures.

For systems to be implemented successfully, they need to:

• Be specific to the task
• Relate to the overall values, vision and goals of the business
• Be replicable by all employees to whom they are assigned
• Be measurable

Processes are most effective when they are based on a thorough understanding of the inherent risks and potential benefits. When documenting the process, it is best to include links to the checklists, forms, guidelines, videos and other ‘props’ that help the process work effectively. This detail results in a predictable outcome with reduced mistakes.

For processes to be effective, they must be:

• Easily understood – simple language will make it easy for every team member to reference the process to quickly understand and execute their work.
• Simple to replicate – a process that can be easily replicated promotes maximum efficiency.
• Easily accessible – process documents are most effective when they can be easily accessed. This can be as basic as having them pinned on bulletin boards but they can also be shared on a companywide intranet.
• Trackable or measurable – trackable processes can be easily monitored, mistakes or shortcomings identified, and improvements made.

3.    Roles and Skills

Roles are essentially the job descriptions used to fill team positions in the business. They are directly related to the systems and processes assigned and clarify how the position contributes to the overall goals of the business. When defining roles in the business, ensure that you clearly outline the job description in simple language, keep growth in mind and stay aligned with company culture and company goals.

For every role that you outline, you also need to define what skills are needed. This should include both hard and soft skills. Hard skills are the more technical requirements such as computer, language and professional certifications. Soft skills refer to more personal or intangible characteristics that will make a candidate better suited to the role. This can include such qualities as being well-organised, a creative problem solver, adaptable and personable.

4.    Structure

The organisational structure of a business operating system is what supports the systems, processes, roles and skills needed. It is what ties everything together. Creating a structure allows employees to feel empowered as they are clear on what their role is and where they need support, where they can go for information and escalation if needed. The organisational structure takes shape as you define the systems and processes, creating an unbreakable machine for your business.

A suitable structure will enable employees to have access to information when they need it, provide clarity on the business goals and values, uphold company systems, and strengthen daily processes.

Key features of business operating systems

In developing an effective and efficient business operating system, it is critical to ensure:

• Establishment of a clear vision, purpose and goals of the business
• Careful development and documentation of set processes
• Scheduling of periodic strategic reviews to ensure the business remains on track
• Regular collection of data on the business
• Standardisation of processes and employee assessments
• Detailing procedures to deal with various issues