Do you have entrepreneur insomnia? Or maybe you want to take your firm to the next level, bring order out of chaos, or transition from good to great. If so, revamping your business operating system (BOS) can be a transformative step. A well-structured BOS is essential for streamlining operations, enhancing productivity, and ensuring sustainable growth. This can be a game-changer for your company.
Every firm has a BOS
A BOS is a collection of business practices that define how you run your business - strategic planning, meetings, solve problems, communicate, measure performance, manage staff, deal with clients, utilize technology, plan and manage projects, create and maintain standard operating procedures (SOPs).
Many firms struggle because their BOS is ineffective or even counterproductive. The U.S. Bureau of Labor Statistics highlight the challenges new businesses face: 20% fail within the first 2 years, 45% within 5 years and only 25% make it to 15 years or more.
You cannot have an effective BOS by taking short cuts and building processes based on reactions to issues or crises that arise. This will lead to inefficiencies and missed opportunities. Since the BOS is one of the key drivers of company performance, it is important to do it the right way. To have an effective and sustainable BOS, a proactive approach that involves careful planning, design, and implementation is essential. Furthermore, the protocols must be firm-wide and ensure that day-to-day operations align with the company’s long-term goals.
Many successful companies, such as Ingersoll Rand, Bosch and Audi, have invested significant resources in developing their proprietary BOS. These systems incorporate best practices and are tailored to their specific needs, helping them achieve and sustain high performance. Honeywell is a great example of how a robust BOS can transform a company. By implementing a comprehensive BOS, Honeywell was able to transform from a troubled giant to one of America’s most successful companies.
There are management consultants and engineers that developed BOS techniques, tools and guidelines for firms to use. Some of the names you may be familiar with are Lean, Six Sigma, Scaling Up, EOS, Total Quality Management, and OKR. These methodologies have origins that trace back to foundational business management practices, but each has its unique strengths and potential drawbacks.
What you need for an effective BOS implementation
Implementing a BOS involves putting a business infrastructure in place to achieve effective strategic planning and execution, having productive meetings and performance tracking to help you keep your pulse on the business, getting to the root cause of issues so they do not keep resurfacing, and having clarity throughout the organization. This can be a daunting task for startups and small businesses due to the complexity and cost involved. However, timing the implementation correctly and being resourceful and scrappy—committed to achieving results despite budget constraints—can make a significant difference.
An effective BOS implementation requires many elements, but if you have these three things, everything else will fall into place.
1. True leadership team: Drawing from Gino Wickman’s “Traction”, a true leadership team is essential. This team should embody transparency, collaboration, clarity, and simplicity. The team should also bridge the gap between expectations and performance, and focus on discipline and commitment. A healthy leadership team avoids dictatorship, instead fostering an environment where every member can contribute meaningfully.
2. Effective change management: Change is often met with resistance, so having change leaders who can advocate and manage resistance is vital. It is crucial to create an environment where team members feel comfortable expressing their opinions about proposed changes, even though you may not be able to incorporate all of them. Helping the team understand the necessity of change and providing consistent coaching and training can ease the transition.
3. High-performing team: According to Patrick Lencioni's "The Five Dysfunctions of a Team," a high-performing team is built on trust, constructive conflict, commitment, accountability, and results. Ensuring that team members align with the firm's core values, are qualified, engaged, and in the right roles is key to navigating the BOS implementation process successfully.
The process
The following is a simple but powerful process tailored for small business leadership teams. You will find that these are common methods taught in business schools. A crucial point; the success of processes hinges on the proper execution.
1. Business plan summary: Create a one-page document that outlines your core values, business description and services, target market, value proposition or SWOT (strengths, weaknesses, opportunities, threats) analysis, and goals. Although 1, 3 and 5 year goals are typically recommended for small businesses, I find that setting 1 and 2 year goals are more manageable and provide a clearer path forward for small businesses going through business transformations.
2. Accountability plan: Create a one-page document that is a high level presentation of all processes within the organization and assign accountabilities to specific roles. It should also include new hires and new processes that will be implemented. The document should be clear and designed for the long-term welfare of the company. It is a powerful document, because it ensures that every team member understands their responsibilities and those of their colleagues, promoting transparency and efficiency. Perform regular review sessions to ensure everyone stays aligned with their responsibilities and to determine if any adjustments are necessary. Moreover, job ads for recruiting, job titles, workflows, and SOPs should align with the accountability plan.
3. Strategic projects: To successfully achieve the goals outlined in your business plan and accountability plan, it is crucial to define clear action items. Start by breaking down each goal into specific tasks and assigning these to qualified team members. Establish realistic due dates and clearly define milestones to prevent scope creep. Implement a robust project management system to centralize all project-related information, ensuring transparency and easy access for all stakeholders. Additionally, create a process to regularly track progress and swiftly address any bottlenecks that arise. This structured approach will help ensure projects are completed on time and accurately.
4. Scorecard: Create a scorecard to measure the firm's performance. Identify the key metrics that are crucial for evaluating performance, such as revenue growth, profit margins, customer satisfaction, and employee productivity. Then, set targets for each metric. Once the report is created, establish a process for monitoring these metrics regularly. If any targets are off track, implement corrective actions such as revising strategies, providing additional training, or reallocating resources. Regular reviews and adjustments will help ensure the firm stays on course to achieve its objectives.
5. Roll out the BOS process to all employees: Rolling out the BOS process to all employees is a significant step towards organizational alignment and efficiency. To ensure a productive and engaging meeting, make it interactive and fun. Provide a clear overview of the BOS process, its benefits and use real-life examples to make it relatable. To ensure buy in, allow the team to ask questions and provide feedback on the documents created during the implementation. Ensure the meeting is well-facilitated. Use techniques like active listening, summarizing key points, and keeping the discussion on track to maintain productivity.
6. Weekly accountability meetings: The final step is to have weekly accountability meetings. Weekly accountability meetings are a great way to keep everyone aligned and motivated. Depending on the type of meeting—whether it is for the whole team, leadership, or a specific department—you can tailor the focus areas. Key elements to consider include team building to strengthen relationships, cross-functional collaboration to enhance cooperation, and training and coaching to develop skills. Transparency and performance tracking help keep everyone on the same page, while project updates and strategic planning ensure that goals are met. Lastly, solving issues and planning for opportunities effectively can drive continuous improvement and innovation.
Impact on your team
Change can indeed be a powerful catalyst for improvement, especially in a chaotic environment. Employees often appreciate a structured and supportive setting, as it allows them to focus on their tasks and achieve their goals more effectively. Those who struggled previously may find new opportunities to shine in a well-organized system.
However, it is also important to recognize that not everyone will adapt to the new changes. In such cases, it might be necessary to make tough decisions, including letting go of employees who are not the right fit. Bringing in new talent with a positive and proactive mindset can help foster a culture of success and innovation.
Timeline
With a solid change management process and consistent effort, you can start seeing initial wins within six months and more substantial results within a year. However, it is crucial to remember that this is a long-term commitment. Celebrating early successes is great, but maintaining consistency is key to avoiding regression.
The process of establishing an effective and sustainable BOS is undoubtedly challenging, but it is also essential for achieving your business goals and overcoming obstacles. The rewards of this endeavor are significant, and many find themselves wondering how they managed without it once it is in place. Stay committed, and the long-term benefits will be well worth the effort!
Feel free to contact me at gail@gailworonick.com for a free consultation.