Business Operating System | 4 mins read

A 5-Point Checklist to Developing a Business Operating System

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Hanh Truong

By Hanh Truong

Introduction to Business Operating System

There are many moving components within an organization, from marketing and customer service to product development and workforce management. As a company continues to grow and expand, it can be difficult to keep these functions together and connected. Any miscommunication can easily cause conflicts or major delays to a business's success. For example, a marketing team that is out of the loop of the latest product design will miss out on valuable time they could have spent on creating campaigns.

A business operating system can prevent these types of silos and ensure everyone is in sync. By defining an organization's needs, expectations, and goals, all teams in a company can grow together. In turn, the brand will have long-term success, happier employees, and greater productivity.

Tips to Build a Business Operating System

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A business operating system helps a company operate seamlessly and efficiently by keeping employees and managers on the same page. It delineates job expectations, collective company goals, and processes. Also known simply as BOS, the system also defines accountability to ensure every team is working hard and productively. Companies that establish a business operating system in their workflow will minimize miscommunication issues, team conflicts, and misallocation of time and energy.

Businesses that are experiencing the following dilemmas should consider developing or improving their business operating system.

  • The business is not growing as expected
  • There are not enough profits
  • Employees are overworked, yet there is no value or financial returns
  • Teams feel unsatisfied and are over-relied on
  • The company is not controlled and teams work in a silo
To create an effective business operating system, entrepreneurs should consider the 5 best practices.

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1. Develop Processes

Undefined processes can result in uncontrolled spending and delayed financial growth. Business owners need to develop and outline their procedures for communication, conflict resolution, operations, and decision making. Experts recommend that companies do not implement new technologies to solve existing problems. This is said to automate more inefficiencies, rather than improve situations.

Instead, businesses should reassess and enhance their manual processes and adopt technology when their teams are ready. Some key features of effective business procedures include the following.

  • Clear instructions
  • Easy to replicate and repeat
  • Documented
  • Can be supported with tech tools, such as software
  • Accessible for all people

2. Optimize Systems

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This best practice entails optimizing technology, marketing, financial, and operational systems. It also involves workforce management systems, such as performance monitoring, recruiting, payroll, and human resources processes. Defining these factors will enhance workflow and improve operational efficiency.

3. Define Employee Roles

Specifying employee roles is important for creating competent and productive teams. Managers should determine the necessary roles they need in the business to operate efficiently. It is also best to refer to the company's mission and goals when establishing employee roles. For example, a retailer may need people to fill the role of the store manager, cashier, and inventory supervisor.

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4. Outline Job Skills

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After identifying different roles for the company, owners need to establish the skills employees must have to be successful. Some of the most common characteristics businesses should look out for including proactive, independent, team player, and creativity. An employee's skillsets should match the role requirements to lessen any delays or productivity issues. Having a thorough recruitment process, such as one that involves a skills assessment, will help to hire managers to identify the right new hire.

5. Create a Company Structure

Developing an organizational structure for a business will allow for growth. It is recommended to design a structure as a final step to the business operating system so that all components effectively reflect business needs. When creating a company structure, owners should examine their legal, tax, income, and liability implications. The most common business structures are sole proprietorship, limited liability company (LLC), and nonprofit.

Key Takeaways to Business Operating System

  • A business operating system is the outline of job expectations, roles, goals, and processes. Also known as a BOS, this system will help companies run seamlessly and efficiently.
  • A business operating system is also known for connecting business teams together, preventing silos and miscommunication.
  • Companies that are not generating enough profits, not growing as expected, or have employees that feel unsatisfied should consider optimizing their operating system.
  • The key components in a business operating system include processes, systems, roles, skills, and structure.

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