How to Create a High Productivity Business Operating System
High productivity business operating systems allow your business to be at its most productive and profitable. Learn more in our quick how to guide.
Published on:
18 Jun 2020
A business operating system supports your business critical functions from marketing through to sales, production and service delivery. As such it needs to be built on rock solid behaviours and processes.
You can think of your business operating system as the engine of your business. It drives your business forward, defining how far you’ll go and how fast. It additionally defines what it’s going to cost to get there and how easy the journey will be.
Perhaps most crucially, it defines your competitive advantage.
Like all engines, some are built better than others. If you build a high productivity business operating system, you’ll be able to out-innovate and out-perform the competition.
What is a Business Operating System?
Your Business Operating System (BOS) is your unique way of doing things. It’s how you think, feel, and act in all you do both individually and as a team. It creates a competitive advantage. It’s what keeps you in business and growing.
So when it’s broken or under-performing it’s a serious situation that if left unchecked eventually leads to decline and failure.
Your BOS includes your people, organisation structure, communications, processes, mindset and culture, all aspects of doing business. All businesses are a collection of people. Your Business Operating System defines how well your staff work as a team towards a common goal.
Key Components of a Business Operating System
Generally speaking, there are five main categories all the various factors of a business operating system fall into. These are:
Processes
Systems
Roles
Skills
Structure
Processes
Put simply, work processes are the way you do things at work.
They’re also a huge risk factor for companies, especially when they’re first setting up or in harder economic conditions.
In an effective business operating system, your processes will be clear, documented and easily replicated so they’re as streamlined as possible. Not only this, but they’ll be continually reviewed to discover opportunities for development to continue ensuring your company is moving forward, not just making do.
Systems
The systems element of business operating systems is an all-encompassing term referring to both hard and soft systems. For example, hard systems could include your payroll or CMS, while soft systems could include your employee progression or compensation systems.
In an effective business operating system, these systems should be well-thought out and designed to create predictability and stability. Things shouldn’t be done ad-hoc as it creates chaos and breeds dysfunction within businesses.
Roles
Particularly for newer businesses, it can seem like roles in a company are a more fluid concept. But this can cause issues, especially when it comes to ownership of issues.
Roles shouldn’t just be a forgotten job description. Instead, they should ultimately help accomplish your company’s mission.
In a comprehensive business operating system, clear roles need to be defined and stuck to. This allows employees and owners alike to make better business decisions.
Skills
With clear roles, you can define the clear skills needed to achieve those roles. This ensures you hire the best and most suitable talent for the job; and deploy those skills where they will be most productive for your business.
With clear processes and systems, employees can become more productive. But there’s one final key component, without which, your business operating system is bound to struggle.
Structure
So many businesses, large and small, lack structure as part of their organisation. Or where they have structure, it is a dated hierarchical concept of command-and-control where ideas and communication are stifled.
Structure dictates processes. It dictates systems. It shapes and defines your company culture and ultimately, your bottom line.
Examples of Effective Business Operating Systems
There are no end of incredible business operating system examples across various industries. But perhaps none is no more famous than the Toyota Production System.
Toyota Production System
We could write about the Toyota Production System (TPS) all day, but in brief, it is a business operating system developed by the car manufacturing giant that incorporates all of the company’s practices and philosophies. This includes everything from the sourcing of materials all the way through to interactions with customers.
TPS was a huge driver for the more industry focused ‘lean manufacturing’ production method.
Lego
Lego hasn’t remained one of the most popular children’s toy companies by accident. It all comes down to an incredible business operating system that allows for operational excellence and a memorable customer experience. Quality control and manufacturing excellence through state of the art technology are at the forefront of the Lego BOS. But this is alongside defined customer service processes that create unforgettable experiences and lifelong loyal customers.
Starbucks
It would have been a miracle to make it through this resource without mentioning at least one franchise because business operating systems are what make franchises thrive. Defined processes, systems, roles, skills and structures are what make the Starbucks experience what it is.
Their business operating system is why you can walk into any Starbucks, anywhere in the world, and have the same great experience that allows the company to keep on thriving.
The Benefits of an Improved Business Operating System
Now you know what a business operating system is, what the key components are and have some examples of effective business operating systems, let’s look at the benefits.
Let’s think of your business operating system as the engine of your business. The benefits of improving the engine of your business should be obvious. They include increased sales, higher profitability, lower costs, improved staff engagement and higher levels of customer satisfaction to name only a few.
But perhaps the most important benefits are less stress, a more rewarding working environment and the freedom to work fewer hours.
A high performing business operating system enables you scale up and grow, or alternatively, easily define an exit strategy if that’s your goal.
Signs of a Low Productivity Business Operating System
Before we jump into how to create a high productivity business operating system, ask yourself a simple question.
Where do you think your business operating system falls on the scale of productivity right now?
Common signs of a low productivity business operating system include:
Sluggish business performance
A poor or negative workplace atmosphere
High staff churn
Long working hours
High stress levels
If any of these describe your business, chances are your company is operating at a low productivity level. Ultimately, you’ll be missing out on profitability.
Poor productivity is at the heart of any lacklustre business operating system. It’s how many businesses function.
This is fine when business is booming, markets are strong and the sales are flooding in. But when economic uncertainty hits or a new competitor arrives, the shortcuts become obvious. The game’s over.
The business operating system that allowed you to survive in the good times isn’t fit for the bad times. You need high productivity to thrive in times of uncertainty. This is why businesses need to review and implement high productivity business operating systems.
Create a High Productivity Business Operating System
Implementing a high productivity business operating system involves several key steps. This includes:
Reviewing your current business operating system to define strengths and weaknesses
Reviewing your current organisational structure
Addressing weaknesses through new processes, systems, roles or structures
Addressing weaknesses in company structure through change management
Implementing continual improvement processes to ensure the business is always being driven forward
Continual review of your business operating system through employee engagement surveys, customer feedback, revenue intelligence and more.