What is a Business Operating System (and why you need one)?
Jan 13, 2023As your business grows, it becomes a more complex beast to manage. A business operating system (BOS) 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 implemented correctly in a growth-oriented business can deliver significant year-on-year growth.
What are some popular business operating systems?
Here are my top five business operating systems...
All five 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) - Best for first-time SMEs
The Entrepreneurial Operating System or EOS creates a strong leadership team, sets clear goals and expectations, and builds a cohesive culture. The system is divided into six key components - Vision, People, Data, Issues, Processes, and Traction – which, together, form an integrated system for operating any business at any level of growth.
EOS focuses on creating and reinforcing clear roles, responsibilities, and accountability to nurture a strong culture of goal alignment, healthy team dynamics, and effective problem-solving. It's rigorous approach helps 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.
Who is EOS for?
EOS is ideally suited to small and mid-sized companies ($2-20M in revenues) where 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, EOS is an excellent starting point for business owners looking to grasp the fundamentals and improve execution.
The top benefits of implementing EOS
- Greater Clarity and Focus
- Improved Communication and Alignment
- Increased Accountability
- Improved Decision Making
- Greater Scalability and Growth
EOS Resources
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 Business, How to Be a Great Boss, Rocket 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 EOS Takeaways
Think of EOS as the high-school diploma for business owners and leadership teams wanting to systematize a business. 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.
EOS Success Stories
"Our growth rate has averaged over 20% per year. These results put us in a position to sell our company to a public company for above-normal multiples and reacquire the company after just a year and a half.” - Rob Dube, Image One.
The Scaling Up Business Operating System - Best for mid-sized companies
Scaling Up is another popular framework to consider when scaling your operations. Scaling Up provides a comprehensive business view, 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 deeper into an organization's needs and providing extensive advice on addressing them best. On the other hand, EOS is a more straightforward, rigid approach focusing on fundamental areas to improve.
Who is Scaling Up for?
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, cash management, people, and execution disciplines are urgently needed.
The top benefits of implementing Scaling Up
- Strategy - Scaling Up goes a step further than EOS by shining a light on strategy
- People - Making sure you have the right people doing the right things right
- Execution - All your processes are running effectively and without drama
- Cash - You have consistent sources of cash to fuel the growth of your business
Scaling Up Resources
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 Scaling Up Takeaways
Think of Scaling Up as an undergraduate degree for business owners and leadership teams.
Scaling Up Success Stories
Companies I've worked with that have implemented Scaling Up have seen 256% growth in as little as three years.
Metronomics Compound Growth System - Best Overall Growth System
Metronomics offers a comprehensive business operating system that CEOs and leaders can rely on for sustained growth. The Metronomics system, or M Game, combines methods and tools from all the influential business thought leaders into a connected system. This unique approach has resulted in one of the most dynamic business operating systems, continuously evolving to incorporate new thinking.
Metronomics - Grow with Ease, Speed, and Confidence
When you start 'playing' the M Game, you'll quickly realize the redundancy of other business operating systems, as it provides everything you need to win your game, whatever that may be. This strategic approach is engineered to deliver peak value in record time, fostering a business environment that thrives today and is built for scalability and long-term sustainability. You won't find a finish line with the M Game because it's designed to be a perpetual journey, continually offering new avenues for growth and performance optimization.
Who is Metronomics for?
Metronomics is for CEOs+Leadership teams serious about creating maximum value in minimum time. It has taken $3 million companies to exits of $110 million in less than five years and $100 million companies to $500-plus million in three years.
The top benefits of implementing Metronomics
- Adaptability - Metronomics is a dynamic system that emphasizes adaptability to the ever-evolving business landscape
- Compound Growth System - Metronomics incorporates frameworks and tools from top business thought leaders to deliver explosive growth
- Strategic Execution System - Metronomics is designed to create maximum value in minimum time
- High-Performance Team - Metronimics combines the soft edge (culture, people, cohesiveness) with the hard edge (strategy, execution, cash) of the business.
Mertonomics Resources
Start by reading The M Game. If you plan to self-implement, Metronomics will step you through the M Game system. Metronomics also has Certified Coaches who serve as mentors to assist in implementing the Metronomics Playbook with precision and effectiveness.
Metronomics Success Stories
Businesses adopting Metronomics have seen 70% revenue growth.
"By dedicating ourselves to this system, we have achieved explosive growth at Milo's. In the six years we have used Metronomics, Milo's has grown by fivefold. The year we started, we sold nine million cases. This year, we'll sell forty-five million." - Patricia Wallwork, CEO of Milo's Tea.
The Great Game of Business® (GGOB) - Best for Open Book Management
The Great Game of Business is an open-book management system that takes the elements needed to win any game and applies them to the art and science of growing a successful business. It's a transformative business operating system that encourages teams to understand the real business situation, take responsibility for change, and have a stake in the outcomes. This approach is not just about meeting management needs; it's about shaping the lives and fortunes of everyone involved in the organization, from the bottom to the top.
The Great Game of Business is for leaders who seek genuine transformation, understand the value of an engaged workforce, and envision a business environment where burdens are shared, not just shouldered by the executive staff. If you see prosperity as a journey rather than an outcome, this could be the game-changing moment you've been waiting for.
The top benefits of implementing The Great Game of Business
- The Game ends 'organizational ignorance.'
- It enhances teamwork
- It generates and spreads wealth
- It educates employees and boosts job satisfaction
- It promotes continuous innovation
The Great Game of Business Resources
To get started, consider reading Jack Stack's best-selling book, "The Great Game of Business." It provides a foundational understanding of open-book management. For a more practical guide, "Get in the Game: How to Create Rapid Financial Results and Lasting Cultural Change" offers a step-by-step approach to implementation.
Key GGOB Takeaways
I've seen The Great Game of Business working in Zingerman's Deli, Tasty Catering and my document storage business.
GGOB Success Stories
"Playing GGOB helped Tasty remain consistently profitable as they grew the business from $6 million to $9.5 million in revenue," Kevin Walter, Co-Founder.
The Value Builder System™ - Best for Business Exits
The Value Builder System is a tool that gives you a comprehensive assessment of the "sellability" of your business. Whether you want to sell now or in a few years, the Value Builder system helps you focus your efforts on the eight key drivers which are statistically proven to increase the value of your business.
Value Builder System™ Explainer from The Value Builder System™ on Vimeo.
The top benefits of implementing The Value Builder System
- Objective Valuation of Your Business
- Identify Areas of Improvement
- Guidance and Strategy
- Increase Profit Potential
- Maximize Your Business Value
- Futureproof Your Business
The Value Builder System Resources
PREScore™ (or Personal Readiness to Exit Score) is an 8-minute online questionnaire that evaluates your readiness to exit your company on a personal level.
Key Value Builder Takeaways
No matter your business, size, or industry, the Value Builder System can help you make smart, data-driven decisions that can lead to impressive returns when selling your business.
Value Builder Success Stories
Listen to John Warrillow's podcast, Built to Sell.
The Cost of Implementing a Business Operating System (BOS)
Implementing a business operating system might appear costly, but it is a worthwhile investment to consider when looking at long-term goals for a company.
Costs vary greatly...
- Your can self-implement most of these systems using a book. For instance: Traction (EOS), Scaling Up, and Metronomics all start from around $14 (£10) and $20 (£18).
- Engage a coach; coaching services range from $40,000 to over $200,000 annually.
Next Steps
Don't leave your business to chance. Start making the kind of smart decisions that will help your business increase in value today. You can start by taking the Business Scalability Scorecard, and In just 5 minutes, you can assess your business against the six critical components of the Compound Growth Systems that drive business growth, team development, and personal fulfilment.
