What Is a Business Operating System?
A business operating system resembles a computer’s operating system. Similar to how an operating system manages a computer’s hardware and basic functions, a business operating system is a standard, company-wide aggregation of processes for efficiently and effectively executing anything at your company, such as communicating with your colleagues, setting goals, making decisions, launching products, managing customer relations, and hiring talent.
For instance, if you need to talk to the “directly responsible individual,” or DRI, for a project but don’t know who it is, your business operating system will help you identify that person.
What’s the Value of a Business Operating System?
The value is in the routine that a business operating system brings. Businesses can do the same.
But first, consider this routine of Haruki Murakami, one of the world’s most popular novelists.
When Murakami decides to write a new novel, he sticks to a daily routine that’s more rigid than most Olympians’.
For six months to a year, he wakes up at 4 am, works for 5 or 6 hours, runs or swims, reads, listens to music and then falls asleep at 9pm to do it all over again.
“I keep to this routine every day without variation,” Murakami said in a 2004 interview for the Paris Review. “The repetition itself becomes the important thing; it’s a form of mesmerism. I mesmerize myself to reach a deeper state of mind.”
Murakami, for all intents and purposes, is a machine. When writing, he operates on a single set of unwavering principles that has helped him earn millions of dollars during his career.
Companies can operate with repeatable processes to achieve optimal productivity and effectiveness. In fact, GitLab, a DevOps platform, has reached a valuation of $2.75 billion in part by developing a team handbook that defines their business operating system.
Let’s look at how you can develop and ultimately implement these processes.
How Does a Business Operating System Help You? (3 Benefits)
1. A business operating systems clarifies your principles
During a talk about scaling a company with principles, values, and a mission, Intercom’s chief strategy officer, Des Traynor, delved into how your company’s principles are essentially a hack to streamline decision making and, in turn, steer all your employees toward the same direction.
Every decision you’re making highlights a principle that you don’t have. If you have to make a decision, why is it that person who came to you for that decision couldn’t make it for themselves? What is it that you know that they don’t know that makes this decision easy for you and hard for them? And is this a permission thing or is this a knowledge thing?” he said. “Always bear in mind, if you want to somebody to make the same decision that you would make, they need to have access to the same information and principles that you have. The only way any of you will go beyond 10 people in your company is by establishing that you need to have principles that you operate on. And those principles need to be codified for the people you hire.
In other words, building a business operating system that clarifies your principles will not only help you stay true to your values but it will also help you scale your company.
The unfortunate reality is that most leaders never bother to actually define nor document their operating principles to share with their team. That means the team is left making decisions without some of the most important context about how to make good decisions. It’s almost like asking someone to play a sport without telling them the rules. Without the rules, they can’t play the game.
Without knowing your business operations, people can’t make good decisions.
The good news is we’ve written a guide explaining what operating principles are and how to use them.
2. A business operating system saves money with better employee communication
$528,443 dollars per year in lost productivity.
That’s because a business with 100 employees spends an average downtime of 17 hours per week clarifying communications and it wastes hundreds of thousands of dollars.
That’s Metcalfe’s Law in action. The connections between the users in your network grow exponentially as more users join your network.
Within the context of business, a network is a company, and users are their employees.
And if your company grows from a small business to a larger one, the harder it will be to communicate with each other.
Documenting your process for communication, especially cross-team communication, will help your company slash the number of hours clarifying communications, streamlining your decision-making.
3. A business operating system improves the quality of your work
After botching the launch of Windows Vista in 2007, Microsoft’s research department analyzed the failed software module and created a statistical model that could pinpoint the variables that led to the highest chance of future software modules having bugs.
The number one predictor? Organizational complexity.
Organizational complexity measures the number of developers working on the module, the number of ex-developers that used to work on the module, the percentage of total employees who work on or have worked on the module, and the distance between the developer and the decision maker within the organization.
Put simply, the bigger a project is, the more hectic things can get. Fortunately, a business operating system can organize a project by documenting its operating principles, goals, roles, processes, and more, which can enable your team to work faster and produce higher-quality work.
How to Build a Business Operating System
1. Identify your company values
To build a business operating system that will enable you to operate by your company values, you need to identify them first.
But if you have no idea where to start, consider following the advice of world-renowned author and motivational speaker Simon Sinek: start with why.
Sinek’s famous “Start With Why” philosophy asserts that the most inspiring leaders and organizations, such as Martin Luther King Jr., the Wright Brothers, and Apple, were all able to build cult-like followings because they developed their core message around their company’s purpose.
By leveraging the deeper meaning behind their brands to emotionally resonate with people, starting with why helped these iconic leaders and organizations cultivate passionate movements for their causes.
After pinpointing your company’s purpose, you can identify your values by gathering all of your employees, or a person from each team, for a meeting. Then, you can discuss what each of you values about your company and teammates, analyze the pros and cons of these values, refine them, and task your founders to finalize them.
2. Set goals for your company and teams
A key component of business operations? Make sure your company goals solve your customers’ pain points. From there, align each team’s goals with your company’s goals.
Too often in business, we conflate the measurement of a goal with the goal itself. This can incentivize you to focus too much on the results instead of the thing that produces the results: process. To open up this common bottleneck, make sure your teams determine why they want to accomplish their goals and how they’re going to accomplish their goals — not just what they’re going to accomplish.
In your internal wiki, you can document your company’s goals and each team’s goals so everyone can stay focused on achieving them at all times.
3. Create structure for you teams
Structure is the hierarchy of your team. As a leadership team, establish who the right person is for strategy or execution, and who takes direction from whom. Tighten your teams’ decision-making and boost their productivity.
You can also clarify who’s in charge of what by using internal documentation to define a team’s structure or hierarchy. That will help not only with accountability but your business agility.
4. Establish business processes for each team
A business process is a series of steps that enables you to complete a desired action.
If you can uncover the processes that produce the best results and encourage your employees to constantly hone them, documenting your processes in your internal wiki so everyone will know exactly how to do them. You’ll have a framework for consistent, quality results at your company.
At Tettra, our issue escalation process looks like this:
- Enter bug or administrative task as a GitHub Issue.
- If it’s a level 0 issue (the most urgent issue), call or text our slackbot Jabberwocky or our CTO Shauni. It will be handled regardless of the time you enter it into GitHub.
- If it’s a level 1 issue, it will be handled during business hours.
- If it’s a level 2 issue, Jabberwocky will complete or delegate it by the end of the week in the next 2-3 days.
- If it’s a level 3 issue, it will be prioritized for the next weekly wave.
- If it’s a level 4 issue, enter it into GitHub, if it’s a bug, or Trello, if it’s a feature request. It will be prioritized in the future.
5. Decide on systems for each of your teams
Systems are the tools you use to do your work.
By establishing how each team should use specific tools to carry out certain tasks within their process, you can streamline it. You can also clarify which tools can execute which tasks by documenting your company’s systems in your internal wiki.
For example, a blog team’s systems that could execute their blog creation and promotion process could look like this:
- Brainstorm ideas
- Do keyword research
- Schedule articles
- Write and edit drafts
- Publish articles
- Send email newsletter
- Post articles to social media
6. Clearly define roles
Assigning specific responsibilities and objectives to each of your roles lets all of your employees know exactly what they need to do, what they shouldn’t do, and what their colleagues need to do and shouldn’t do in order to achieve their team’s goals.
In your internal knowledge base, make sure to document each team’s roles and DRIs so no one will ever forget what they’re in charge of — and what they’re not in charge of.
7. Match the talent with best-fit roles
After clearly defining each of your company’s roles, make sure you match each of your employees to the role that best suits them. Your business operating system will run more smoothly this way because you’re giving your employees the best chance to hit the ground running and excel at their jobs down the road.
For instance, who do you think would be a better fit to cover financial topics on your blogging team? The English major or the economics major? We’d probably go with the economics major, too.
Putting Your Most Effective Processes into Place
Before you pull a Facebook and start “moving fast and breaking things,” consider setting up a business operating system.
Because slowing down and understanding what your most effective processes are is what will take your company to the next level.
How Tettra Can Be Your Business Operating System
There will be a lot of check-in tools, project management software, and collaboration tools who promise you this and that about business operating systems.
However, think about what you need. Not more things to do. You need a place for information.
And that’s what Tettra delivers, especially for answers to your team’s most pressing questions.
If you find your team (whether it be customer support, engineering, product, or sales) frequently pinging others via Slack, then Tettra is the place where users can go first for these answers.
It doesn’t even have to be long. It can short and quick, especially with our answer feature.
Or something else like a process or policy may need more. Tettra can handle that, too.
Tettra offers a full suite of tools for sharing knowledge.
With Tettra, you’ll get:
- Q&A workflow to capture questions
- Knowledge base to document answers
- Knowledge management features to keep content up to date.
- Integrations with chat tools to make sure your team actually uses Tettra
Set it up today.