Build #48 - why you need a BOS

Hey there,

I’ve worked closely with founders in growing businesses since 2014.

Over those years I’ve noticed a few patterns that hold true almost everywhere.

One is about the founder’s ability to devolve the right to make meaningful decisions.

The sad version of this pattern is where the founder holds decision-making power close and doesn’t really enable others to genuinely take decisions.

As the business hires good people into leadership roles, they work out pretty quickly that the only way to get stuff done is to be close to the founder.

They endlessly second guess what the founder would say.

Their energy goes into jockeying for influence on the founder, not actually leading the business.

Messy politics abound, frustration builds, growth slows and the most talented newly hired leaders quickly get the picture and leave.

The happier version of this is where the founder recognises the need to create a system that allows them to spread decision-making more widely. They do this to help people stay focussed on goals, working autonomously with the protection of clear guardrails.

This is where a business operating system (BOS) comes in.

A BOS comprises the essential concepts, tools and disciplines needed to build and run an effective company.

Usually a BOS in a growth business will cover:

• vision - a compelling big picture vision that people want to get behind
• goals - a way of setting long and short term goals that ensures alignment
• customers - a clear understanding of what you’re selling and to who
• people - high performing, capable people in well-defined roles working effectively in teams
• structure - an organisational structure that’s right for the work to be done
• process - standardised ways of working that balance predictability with space for autonomy
• meetings - a cadence of effective meetings to oversee and steer the business
• data - reliable numbers that drive insights and action

The right combination of these things, consistently implemented over time, will turn a founder-dependent business into an enduring and founder-independent company.

Two of the most well-known business operating systems are the Entrepreneurial Operating System (EOS) and Scaling Up.

They’ve been around for a long time and give founders comprehensive frameworks and tools to share decision-making and leadership widely.

EOS was developed by Gino Wickman. It’s based on combining vision with traction and emphasises getting the right people in the right seats, developing a strong vision, creating priorities through rocks, quarterly and weekly meeting rhythms and has a useful process for solving issues.

Verne Harnish’s Scaling Up BOS was based on his work studying strategy and execution practices of successful entrepreneurs. It focuses on setting priorities, achieving quarterly wins, using data for accountability and having an adherence to proven processes (spotted a theme yet?).

I tend to take a fairly progressive view on how companies should run, which means some of the more hierarchical aspects of EOS and Scaling Up don’t work for my natural approach. They come from an era where top-down control remained a management theme, which feels antithetical to enabling genuine accountability across a business.

One of my favourite business operating systems that has been developed more recently is System & Soul. Functionally it does much of what EOS or Scaling Up will give you, but it does this through a human as well as organisational lens. It feels much more relevant to the kind of businesses that most progressively-minded founders want to build.

I’ve implemented plenty of systems over the years, but it’s extremely rare to do an implementation of something like EOS or Scaling Up straight out of the textbook. There’s always business and founder-specific context that means some element of the BOS needs to be customised.

Creating and embedding a custom BOS takes time, but even the early stages of instilling new ways of doing things can have a really positive impact. I advocate a implement early and often approach, with tight testing and learning loops. That’s the best way to come up with the system that’s right for your growth stage, people and you as a founder.

Getting it right allows founders to gradually step back from the day-to-day. The company’s purpose, values, goals and ways of operating are codified, allowing new joiners to understand and navigate their new role more independently.

A robust BOS enables more decentralised decision-making while still keeping alignment of teams to the overall vision and strategy.

This means founders can spend more time working on the things that have the greatest impact and are important to them and their passions. It enables scaling beyond the capacity of the founder to be personally involved in every decision.

So if you recognise the signs of my sad pattern of founder delegation, maybe it’s time to consider creating a more coherent BOS for your growth business?

best regards,

-sw

ps yesterday we pushed the button to go-live on a new collaboration with my long-time collaborator Sarah. Actualise.work helps founders through a dual domain approach to company building – combining the practical and the psychological side of growth. We created the two Actualise.work programmes because we’ve seen founders get frustrated with cookie cutter approaches to the journey of building businesses too often.