Lesson 2, Topic 2
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How the Integrated Business Operating System works

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The Integrated Business Operating System, what we call the IBOS, incorporates both the Deming cycle across the top with Plan, Do, Check, Act and different time horizons along the vertical. This helps you structure your business thinking to work both short and long term.

So how does it work? First, start in the top left corner to understand why your business exists. What does it do? Who does it do it for? What makes it different from all the others in your industry? Your business is ultimately a reflection of you, your beliefs and your goals. This understanding of your business leads to a clear vision and the business’s mission. A mission is basically a big, hairy, audacious goal that you want your business to eventually achieve. Your mission can be broken down into smaller objectives which are broad statements like “to grow the business”. Business objectives are then turned into SMART goals with measures for success – how we know we’ve achieved our goal. In our example, our SMART goal might be “to increase our business revenue from $1m to $2m in the next 18 months”. With a clearly defined goal, a long term strategy can be devised. This is the “what we will do” and the “how we will do it” to realise our SMART goal. If we achieve our SMART goal we will have realised our objective.

With clear strategic plans, the different functional areas in your business, think of these as departments like marketing or fulfilment, can then plan the actions they need to take. In our example, the strategic plan to grow revenue might involved starting a podcast on Spotify. The tactical planning would focus on all of the steps that need to be taken in order to start a podcast. These actions might span across different departments, like IT – how to record, edit and upload – as well as marketing for planning the content of each episode.

By including the functional teams in the tactical planning stage the teams and individuals feel like they own the actions and ideas meaning they self-assign and manage the tasks rather than waiting to have them assigned. Team leaders and managers are then focused on prioritisation of tasks and actions based on what is urgent and important within the business rather than compliance – “why isn’t this done yet?”.

Actions are there carried out in the “do” phase. This is the phase most businesses get stuck in because they reduce their thinking to the short term of completing the daily actions required to get to tomorrow.
The “check” phase is where the results of the actions are compared to each goals definition of success. This includes both lead and lag measures – are we on track to meet the objective and have we met the objective. This allows for plans and actions to be adjusted and refined before it’s too late. Think of the check phase as the dashboards in your business that indicate the effectiveness and efficiency of your plans, as well as a warning of any potential issues.

Finally, the “act” phase is where corrective actions are taken. All of this information and knowledge is then fed back into our planning stage, completing the cycle. Now every time a cycle is completed be it daily, weekly, monthly, quarterly or annually the planning gets better and better. Better planning leads to better actions which leads to better results.

Can you afford not to set up an Integrated Business Operating System in your business?