What is a business operating system (and why you need one)?

entrepreneurship growth
What is a Business Operating System

As your business grows, it becomes a more complex beast to manage. A business operating system aligns your strategy with tactics and brings structure to your business, resulting in quicker decision-making and improved strategic planning.

Simply put, a business operating system is an engine for growth. It gives you and your team the structure, clarity, and discipline you need to scale your organization. And when properly implemented in a growth-oriented business can deliver significant year-on-year growth.

What are some popular business operating systems?

Here are my three favorites...

  • Entrepreneurial Operating System (EOS®)

  • Scaling Up (formerly Gazelles)

  •  Metronomics

All three are fantastic tools for scaling and growing your business. These frameworks provide structure, accountability, and clarity to the inner workings of a business, making operations more efficient and growth more achievable. However, each of them has its strengths and ideal fit. In the rest of this post, I'll give you an overview of each system.

Entrepreneurial Operating System (EOS®)

The EOS system is divided into 6 key components - Vision, People, Data, Issues, Processes, and Traction – which, taken together, form an integrated system for operating any business at any level of growth.

EOS puts significant focus on creating and reinforcing clear roles, responsibilities, and accountability to nurture a strong culture of goal alignment, healthy team dynamics, and effective problem-solving. Its rigorous approach help business owners and leadership teams gain clarity while aligning their team's efforts around common objectives. Ultimately, EOS will help you cultivate a unified purpose and leverage resources to effect change to help your business find traction and grow.

EOS is typically for small and mid-size companies (size $2-20M in revenues) where their people management and execution practices need focus. It's an ideal fit for businesses with one primary location, between 10 and 250 employees, and a leadership team of 3-7 people. In my experience, it helps galvanize new leadership teams, enabling them to bring out the best in the organization and one another.

EOS® was founded by Gino Wickman, who wrote Traction: Get a Grip on Your Business in 2007. And has since followed up with several other books: Get a Grip: How to Get Everything You Want from Your Entrepreneurial BusinessHow to Be a Great BossRocket Fuel: The One Essential Combination That Will Get You More of What You Want from Your Business, and What the Heck Is EOS?: A Complete Guide for Employees in Companies Running on EOS.

Key points: EOS® is a powerful tool that follows a rigid approach. It works best if you and your team are open-minded and motivated to create success. Businesses I've worked with that implement EOS have seen up to 50% year-over-year growth in some cases.

Scaling Up

Scaling Up is another popular framework to consider when scaling your operations. Scaling Up provides a comprehensive view of the business, focusing on four critical areas: People, Strategy, Execution, and Cash Flow.

Scaling Up and EOS offer two distinct approaches to scaling your business. Scaling Up has more complexity at its core, looking a bit deeper into an organization's needs and providing extensive advice on how to address them best. On the other hand, EOS is a simpler, more rigid approach and focuses on fundamental areas to improve.

Gazelles’ Scaling Up is typically for larger, more sophisticated, middle-market companies of between £/$10-500M in revenues. I've used it with hyper-growth startups where strategy and cash management, people, and execution disciplines are urgently needed.

Scaling Up (originally Gazelle's) was founded by Verne Harnish, founder of the Entrepreneurs Organization (EO). In 2002 Verne released Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm. At the request of the entrepreneurial community, he was asked to start implementing the Rockefeller Habits into companies. Verne Harnish and the Gazelles team wrote the book Scaling Up: Why Some Companies Make It and The Rest Don’t in 2015. 

Key points: Businesses I've worked with that have successfully implemented Scaling Up have seen up to 256% growth in as little as 3 years.

Metronomics

Metronomics is a unique program that helps CEOs and their leadership teams speed up top-line growth and double cash flow within three years. Metronomics simplifies the process by providing a comprehensive Playbook and intuitive software to guide companies through complex business challenges.

Metronomics has evolved over many years and comprises seven systems - Cultural System, Cohesive System, Human System, Strategic System, Execution System, and Cash System. These systems are referred to as the "Soft Edge Systems" and "Hard Edge Systems," respectively.

The Soft Edge Systems help create the foundations and walls of your business by having the right people in the right seats for maximum growth. On the other hand, the Hard Edge Systems play a major role in ensuring tasks are executed effectively for higher output. Metronomics uses these seven systems together to boost productivity and capitalize on business opportunities.

Metronomics is a powerful tool for driving business success by integrating strategy with operations through an agile process. It emphasizes collaboration between teams and leverages technology to foster transparency and maintain accountability at all levels of the organization.

Metronomics also offers Certified Coaches who serve as mentors to assist in implementing the Metronomics Playbook with precision and effectiveness.

Key points: Businesses adopting Metronomics have seen 70% revenue growth.

These are a handful of exceptional entrepreneurial operating systems that can help your business grow and scale. If you're serious about consistent long-term success, consider investing in these tools and frameworks to help your operations run more smoothly and efficiently.

The Cost of Implementing EOS vs Scaling Up vs Metronomics

Implementing a business operating system can be costly, but it is a worthwhile investment to consider when looking at long-term goals for a company.

Costs vary greatly...

The paperback versions of Traction (EOS), Scaling Up, or Metronomics start from around $14 (£10) and $20 (£18). However, the cost rises depending on the extent of the coaching services you engage in, ranging from $40,000 to over $200,000 per year.

Next Steps

In my experience working with both Scaling Up and EOS, I'm a big proponent of companies starting with the latter. Due to its simplicity, implementing EOS in a pure form can give businesses a strong foundation before moving towards Scaling Up as they grow. While Scaling Up and EOS are great systems, I believe Metronomics yields the best results.

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