The Complete Guide To Creating a Robust Operating System
- Chad
- September 12, 2026
- Uncategorized
- 0 Comments
Running a business is an exhaustive venture, a path laden with challenges that often leave entrepreneurs feeling tethered, overworked, and ultimately burned out.
How We’re Scaling Six Different Businesses (Simultaneously) Inside a $200M Holding Company Using the Scalable Operating System™
In this report, I want to share the brand-new, “business-automating” Scalable Operating System™ my partners and I are using to profitably scale six (6) different companies simultaneously within our $200M holding company…
…without getting stuck in endless meetings…
…without being enslaved to my email inbox…
…without enduring the endless “shoulder taps” and “Gotta minutes?” and…
…without burning out…
…all while taking at least one 30-day vacation every year.
If your goal is to pivot from a flailing founder into a true CEO who works “above” your business instead of “in” your business, you’ll definitely want to check this out.
That’s a bold claim. I get it.
And if I were sitting there reading this right now, I would probably be skeptical, too.
That said, I would also be thinking, “How can I get one of those ‘Scalable Operating Systems’ in my business?” if two things were true:
- I knew the system actually worked, and…
- I understood HOW it worked so I knew whether or not it was right for my business.
So that’s exactly what I want to do in this report.
I want to break down how the Scalable Operating System™ works by using my own business as a case study so you have all the information you need to reach your own conclusion.
This is the Scalable Operating System™ (or sOS for short)…
Screenshot of the Scalable Operating System buildout process.
*CLICK HERE to watch a step-by-step video walkthrough.*
…and it’s totally different from other “off-the-shelf” operating systems you may have read about in books or even attempted to implement in your own business.
(And you probably know some of the ones I’m talking about…)
This is the “operating system” your business needs to scale without an over-reliance on the founder (a.k.a. you) or any other key individuals within the organization, and it’s tested by taking a “30-Day Vacation” from your business.
That’s what one of our clients, Josh, was able to do…
And the best part is, he did it again this year!
Only this time for 2.5 months!!
Screenshot from our private client Slack channel.
I don’t know what your version of entrepreneurial freedom looks like.
…maybe it’s taking the family to Spain for 2.5 months like Josh did…
…maybe it’s finally buying that fancy car or boat you’ve always wanted…
…maybe it’s just sitting on the beach doing absolutely NOTHING, or…
…maybe it’s working 80-hour weeks, but only on the high-impact projects you actually enjoy instead of the low-leverage menial tasks you HATE.
Whatever it is, I want you to have it, and I think this new operating system will help you get it.
If you agree, and you want my team to help you build your own business-automated operating system, I recommend booking a demo call with my team now.
My goal for writing this case study is simple…
I want to educate you on what a Scalable Operating System™ is, but my real hope is that as we walk through it, together, you not only think, “I need one of these in my business…”
…but you also think, “I should get these folks to help me build it.”
As you’re about to see, the Scalable Operating System™ is simple to understand, but relatively complicated to build and install.
And that’s actually a good thing!
Because it’s a little bit complicated, your competition won’t do it which gives you a real, lasting business advantage. And fortunately for you, you don’t have to figure it out on your own.
We don’t sell courses or trainings at The Scalable Company.
We work 1-on-1 with entrepreneurs to build and install fully-customized operating systems, because we know that’s the only way it’s going to get done. (You already have too much on your plate, as it is.)
So while this process can be complicated, we can virtually eliminate all the complexity by doing all the difficult work for you.
I’m not trying to sell everyone on this. I know not all entrepreneurs are ready for the services we offer.
If you think you might be ready, though, there’s zero downside to booking a demo call and speaking with my team about installing a Scalable Operating System™ for you.
For those who still need more information, let me explain a little more about who I am and how the Scalable Operating System™ works.
First, I should probably introduce myself…
Hi, I’m Ryan Deiss.
If you’ve been around the marketing and entrepreneurial world for any length of time, you may recognize my name.
I’m the co-founder of The Scalable Company and DigitalMarketer.com, as well as the founder and host of Traffic & Conversion Summit which, for the last 13 years, has been the largest digital marketing conference in North America.
But I’m not just a “marketing guy.”
Over the last two decades, my partners and I have started 17 businesses, exited 4, and according to Shark Tank star, Daymond John, my companies “practically own the Internet.”
(That’s obviously an exaggeration, but still, thanks, Daymond! 🙏)
Collectively our portfolio of 17+ companies generated over $200M in the last 12 months…
…so I know what it takes to scale from a small, bootstrapped business that “pays the bills” into a scalable (and even exit-able) business that creates both freedom and generational wealth.
I am also the author of multiple books, including Digital Marketing for Dummies and Get Scalable: The Operating System Your Business Needs To Run and Scale Without You…
…and as a speaker I have shared the stage with other business and thought leaders including Sir Richard Branson, William Shatner, Gary Vaynerchuk, Martha Stewart, Tim Ferris, Daymond John, and Dave Ramsey.
Just a few of the brilliant folks I’ve been privileged to spend time with over the years.
I don’t tell you any of this to impress you or to pretend I’m God’s gift to business or entrepreneurship.
I tell you this so that you know I do this stuff.
I’m in the arena just like you.
More importantly, I don’t only make my money talking about this stuff, which is a really, really important distinction.
The sad fact is that a lot of people who consult, write books, and create courses on “growth” and “scale” are retired “has-beens” at best and Lambourgini-renting TikTok hucksters at worst.
That’s not my game.
I love business and I love entrepreneurs.
I enjoy giving back, but candidly the main reason I write and teach about this stuff (like I’m doing right now) is to create additional dealflow and investment opportunities for my partners and I.
But I digress…
The #1 thing I want you to hear is that I’m in it. I know what you’re going through, and I believe I have discovered something that will help you win.
More importantly, I’m a husband and a father of four amazing kids, and unfortunately, I’ve experienced the downsides of an unbalanced entrepreneurial life:
- Leaving for work before my kids are awake…
- Getting after everyone is in bed and asleep…
- Missing soccer games and dance recitals…
- Cancelling date nights and being late for family dinners…
…you name it.
I know what it’s like to sacrifice my health, sanity, and relationships people I love the most at the “altar of scale,” and I’m on a mission to help my fellow entrepreneurs not make the same mistakes I’ve made.
Because the truth is, you don’t have to!
Let me ask you a question, and I want you to answer it honestly…
“Are you actually a business owner or
are you really just self-employed?”
To help you answer this question, let me ask you another one…
“Does the money still show up
if you DON’T show up?”
Be honest.
Does your business still function…
- If you’re not there to help drive new leads…
- If you’re not there to help close sales…
- If you’re not there to make sure your customers and clients are happy…
If the answer is “No,” then it’s time to admit that you don’t own your business…
…your business owns you.
You have a job…
…and a crappy job at that, with a crappy boss (who’s likely going a little bit crazy).
We hear it all the time from newer clients and portfolio partners.
They say things like…
Sound familiar?
As entrepreneurs, this is when we start to feel trapped in our own business.
This is even when we begin to resent our own businesses.
If you’ve thought those thoughts and felt those feelings, I want you to know two things:
- You aren’t broken, and…
- Your business isn’t broken
You just need a new “operating system.”
And I should know…
When I started my first business, my goal wasn’t to “get rich.”
Looking back, I didn’t even realize I was starting “a business.”
All I knew was:
- I had met a girl…
- One day I would ask this girl to marry me… (SIDE NOTE: I waited a long time to tell her that because I didn’t want to scare her off 🙂)
- Marriage proposals involve diamond rings…
- Diamond rings are expensive, and…
- I was broke.
This series of realizations was all the motivation I needed to launch my first business from my college dorm room in 1999.
Fast forward a couple of years, and…
…I got the ring…
…I got the girl, and…
…that little dorm room experiment had ballooned into a “real business.”
I didn’t know what I was doing.
All I knew was, “It was working!”
Fast forward a few more years and our little family had expanded to three…then four…then five…then six!
And along the way, that “little business” expanded, too.
I had it all: A big house, fancy car, tens of millions in revenue, and…
…not one…
…not two…
…but THREE different companies on the Inc 500 list simultaneously.
My peers respected me, my friends were jealous of me, and my competitors feared me.
Could life get any better?
There was just one problem…
I was tired, burnt out, and completely miserable.
And as bad as it was for me, it was even worse for my family.
From the outside looking in, people were saying things like…
“Ooh, you’re so successful.”
“Ooh, your businesses are crushing it.”
“Ooh, you must be so happy.”
But the reality on the ground was very different.
Missing soccer practices, dance recitals, and family dinners became the norm, and most nights I got home after my wife and kids were already asleep.
I barely knew my own children, and they barely knew me.
One night, things reached a breaking point.
I returned home after yet another late night at the office. I tip-toed through the living room like always, trying not to wake anyone, but as I rounded the corner to my bedroom I could see a light shining through the crack at the bottom of my bedroom door…
The last thing I saw before the worst/best night of my life.
I remember thinking…
“That’s not good. She should already be asleep by now. Why is she awake?”
I slowly opening the door, walked into the room, and there was my wife sitting up in bed. It was clear she had been crying.
I’ll never forget her words for as long as I live…
“You can keep doing what you’re doing, but you can’t pretend like you’re doing it for us anymore.”
It wasn’t an ultimatum.
It wasn’t a threat.
She didn’t even say I had to stop working.
My priorities were out of whack, and she called me on it.
Remember, I started my first business so I could buy this woman an engagement ring. And I was motivated to scale the business because our family was growing, and kids require expensive things like braces, piano lessons, private schools, and Disney vacations.
I was supposedly doing all of this for them, but the sad reality is that we were all more miserable than ever.
She was right.
Gutted, I knew I needed to make a change.
I didn’t want to stop being an entrepreneur.
I didn’t want to stop building businesses.
And I couldn’t just throw in the towel and get a “real job.”
But I knew I couldn’t keep doing things the way they had been done. I had achieved a level of success that most entrepreneurs only dream of, but internally I was spiraling downward…
…and I was taking my family down with me.
No amount of success was worth the sacrifice I was making, and it certainly wasn’t worth the sacrifice I was asking my family to make.
But here’s the good news…
You don’t have to choose between success and freedom.
Today, I’m pleased to report that my story does have a happy ending.
My marriage is strong and loving.
My relationship with my kids is better than ever.
And without even trying, my business is larger (and more profitable) than ever.
Don’t get me wrong, life isn’t perfect.
I still miss the occasional soccer game and I’d be lying if I said I was never late for a family dinner, but that’s now the exception rather than the rule it once was.
Not only do I maintain a “normal” work schedule (including taking weekends off), every single summer we take an entire month off as a family to tour around the world and just enjoy quality time together.
Just a few of the adventures we’ve shared as a family during my “30-Day Vacations.”
And when I’m off, believe me…I’m OFF!
- I’m not checking email…
- I’m not logging into Zoom, and…
- I’m definitely NOT attending any meetings.
And the best part is, I’m not missed when I’m gone, because the business has been built in such a way that it can run and scale without me.
That’s what I want for you.
But to achieve that, I had to do something few entrepreneurs ever do…I had to “upgrade” my company’s outdated “operating system.”
Because whether you realize it or not…
Your business already has an operating system.
In case you’re unfamiliar with the term, an “operating system” is a single source of truth that documents:
- What a company does…
- How it does it, and…
- The progress it is making toward its stated goals and objectives.
Just like a computer’s operating system, it is the underlying “source code” that powers your business.
The literal definition of an “operating system” (according to Google)
and how each component translates into a Scalable OS.
The problem is, most businesses are still operating on the very first version of their company’s OS…
…it’s an operating system we now refer to as a “YouOS.”
We use the term “YouOS” because for most businesses, YOU (the founder) are the operating system and the operating system is you.
- You know how to attract and convert new customers and clients…
- You know how to deliver a valuable experience…
- You know the metrics that matter and the goals you’re pursing, and…
- You’re the one who knows where all the bodies are buried.
Simply put, YOU are the only one who knows how everything works, and because of that, your business is completely dependent on YOU.
All this was fine in the early days when your company was still small and simple, but now that your business is larger, a YouOS is no longer enough to power it.
Don’t misunderstand me.
I’m NOT saying your business has outgrown you or that you’re no longer up to the task. And please don’t think I’m suggesting that you need to fire yourself and bring in “adult supervision” like a lot of bankers and Private Equity twerps would have you believe.
I’ll say it again…
- You aren’t broken, and…
- Your business isn’t broken…
…you just need a new “operating system.”
And this is actually a good thing!
Just like a computer need to upgrade their operating systems as they get faster and more powerful, your company’s OS need an upgrade as it grows in size and complexity.
To state it as plainly as possible…
Your operating system doesn’t need an upgrade because you did something wrong. Your operating system needs an upgrade because you did something RIGHT!
It took my partners and I far too long to come to this realization, but now that we have, I’m going to walk you through how we built and installed our “upgraded” and scalable operating system.
Before I get into the “step-by-step” of how we build and install Scalable Operating Systems™, if you have seen enough and you’re ready to book a demo call, there’s no need to wait until the end of this video.
And remember, this is a demo call, not a sales call.
Our success rates are so high because we are super-selective about the clients we work with, so our main goal in this demo session is to learn more about you and your business while also answering all your questions so we can both make an informed decision.
If we mutually agree it’s a fit, we can discuss next steps, but there’s no risk to booking a call to discuss how can custom-tailer a Scalable Operating System™ for your business.
I promise you’ll get a lot from the conversation, even if we choose not to move forward.
And for those of you who are interested but considering alternative solutions, let’s discuss…
Five Things That Did NOT Work
Before settling on an operating system upgrade as the solution to my burnout-inducing scale problems, I tried five other things that flat out it did NOT work.
In an effort to save you from repeating my same mistakes, here are all the things I tried (that you might have tried, or are thinking about trying) that either didn’t help or made things WORSE:
- Becoming “More Productive” Did NOT Work
Look, I’m not afraid of hard work.
Back in my “prime,” 80-hour work weeks were the norm and 100-hour weeks weren’t out of the question. I worked nights and weekends, sun up to sun down and then some.
My output was legendary.
Seriously, I could outwork and outproduce anyone in the company 2X – 3X.
By anyone’s standard, I was highly “productive.”
But here’s the problem with productivity: You still only have 24 hours in a day, and eventually you do need to eat and sleep.
So I read all the time management books and tried every productivity tool, app, and planner on the market, but it was never enough.
The harder I worked, the faster the “To Dos” filled my list.
That’s when I realized I had it backwards all along.
As a business owner, my job isn’t to do MORE, it’s actually to do less.
As a good friend and mentor once told me…
“The more valuable you are to your business, the less valuable your business is.”
And as strange as that might sound at first, if you really think about it, you have to admit that it’s true!
Even if you never intend to sell your business, a good determination of its value is what someone is willing to pay for it. And for most business owners, we have to admit that, without us, our company isn’t worth very much unless we were willing to go to work for the new owner (which is a circle of entrepreneurial hell I have no intentions of visiting).
So for this new operating system to work, it couldn’t require more of me.
In a very real sense, it needed to “replace” me.
- Creating SOPs for Everything Did NOT Work
Fairly early in my career, a well-intentioned fellow entrepreneur told me I needed to start reading books like The E-Myth Revisited if I wanted to learn how to build a real business. And while the ideas and concepts in these books were solid, the recommendations were all basically the same:
“Document everything that everybody does into checklists and standard operating procedures (SOPs) so your business can run like a well-oiled machine.”
Well guess what? I tried it…
I literally shut down my entire company for a full month…no new projects…no new hires…NOTHING…until absolutely everyone had documented absolutely everything they did.
No one was happy about it and I just barely escaped an all-out mutiny, but I pressed on, and at the end of the month we finally had it…
Binders of SOPs is NOT an operating system.
…a bookshelf full of tabbed, color-coded binders that detailed all the processes and procedures that everyone performed at the company.
There was just one problem…
NO ONE ever looked at these SOPs. Not once. Not ever.
It was the single biggest waste-of-time, busy-work project in company history, and we saw zero gains in efficiency.
SIDE NOTE: I rediscovered the binders when we moved offices a couple years ago. They were literally covered in dust.
To be clear, I’m NOT suggesting that checklists and SOPs don’t have a place in a company’s operating system.
What I am suggesting, however, is the way most “business gurus” tell you to create them is flat out wrong, and so for our operating system, we decided two things right from the start:
- We would document ONLY the most critical tasks (not everything), and…
- All documentation would be created while someone was doing their job, not as an additional task or work project.
Again, I’m not knocking the E-Myth. It’s a great book. But if you think you need to “document everything” to have a functioning operating system, I have good news for you: you don’t.
- Hiring “Rockstars” and “A Players” Did NOT Work
Good people don’t fix broken systems…broken systems break good people.
This one flies in the face of what all the experts and “gurus” preach when they say things like, “All problems are people problems…” and “There’s no such thing as ‘How’ problems, there are only ‘Who’ problems.”
Fortune cookie musing like these may get you a following on Twitter/X, but in the real world where we are living, the “just hire A-players and everything else will take care of itself…” advice wasn’t cutting it.
First, I couldn’t afford to make any major hires. Cashflow was just too tight.
Second, I didn’t have time to train and onboard any new people. (I was trying work LESS, remember?)
Finally, I had already tried throwing people at our problems in the past, and it never worked. Time and time again I would watch as talented people who genuinely cared were chewed up and spit out.
It wasn’t their fault.
I was the one who was setting them up for failure, and this become increasingly apparent as these same people who “failed” at my company thrived in their role at their next company.
That’s when I came to following realization…
Good people don’t fix broken systems. Broken systems break good people.
Yes, you want to hire great people.
Who doesn’t?!
But as a business owner who values both success AND freedom, your objective is NOT to build a team of “rockstars” and “A-players.” Your objective is to build a company that doesn’t require them.
Fortunately, as you’re about to see, that’s exactly what the Scalable Operating System™ allows you to do.
SIDE NOTE: The best people want to work for the best companies, so by focusing on systems first, you actually make it easier to recruit and retain the best talent.
- Hiring an “Integrator” Did NOT Work
This one might get me in a little trouble but it needs to be said…
The idea that you can make one, magical “unicorn” hire who will do all the “dirty work” while you just “visionate” all over the place is a laughable lie.
Don’t get me wrong, I get why entrepreneurs want to believe this.
Heck, I wanted to believe it, and more than once I have attempted to make such a hire who’s job title was something along the lines of:
Role: Integrator
Job Desription: Do all the stuff I don’t want to do.
But ask yourself, have you ever actually seen it work?
Sure, there are instances where you have two co-founders and one is more of an operator while the other is more of the visionary, but aside from a founder/co-founder relationship, I have seen more “integrator” crash and burn at entrepreneurial companies than literally any other role.
And here’s why…
If you hire an operator (a.k.a. “integrator”) before you have an operating system in place, one of two things will happen:
- The operator will attempt to create their own OS based on how they believe the company operates. When it differs from the way you do it (which it will), you’ll swoop back in, undermine their efforts, and they’ll either quit or you’ll fire them in 6 – 9 months. (Ask me how I know.)
- The operator, realizing they don’t have a system to work from, will sit around waiting for you to tell them what to do. You’ll eventually get frustrated that “They aren’t taking charge!” and either fire them, or accept that you’re paying $150K – $200K/yr for a glorified executive assistant. (Again, ask me how I know.)
To be clear, I’m all for you hiring an Operations Manager, VP of Operations, COO, President, or heck, even a CEO one day. I want you to have that “#2” who can do all the stuff you suck at or just don’t want to do!
The issue is sequence…
In an ideal world, you should have an upgraded operating system (i.e. NOT a “YouOS”) in place before you hire your first operator.
And if you already have an operator, then your first order of business should be to collaborate with your operator to build the OS so it meets the standards that you set.
Either way, no operating system…no operator.
- More Growth Did NOT Work
Look, I’m a marketing guy. Not only am I the founder of DigitalMarketer.com and Traffic & Conversion Summit, but I also authored the book, Digital Marketing For Dummies, so I know a think or two when it comes to growth.
And for years, I operated under the delusion that growth fixes everything.
“I’ll slow down when we hit $1M in revenue…$10M…$30M…”
…the goal-post was always moving, because I believed that things would get easier once we hit that “next milestone.”
But the opposite turned out to be true.
As my business grew, not only did I have less and less free time, but as expenses went up and margins went down, I was also making less money, which meant I needed to work even harder just to take home what I was making when my business was smaller.
Clearly more growth was not the answer.
And this isn’t just my opinion.
Did you know that the failure rate of Inc. 5000 companies is actually higher than the failure rate of normal startups?
It’s true!
According to a study released by the Kauffman Foundation in coordination with Inc. Magazine…
“About two-thirds of the companies that made the list had shrunk in size, gone out of business, or been disadvantageously sold.”
SOURCE: https://fortune.com/2016/03/07/fast-growth-companies-fail/
In other words, 67% of “Fastest Growing Companies in America” FAIL within 5 years.
Compare this to normal, non Inc. 50000-listed companies and the failure rate is just 48% according to the US Bureau of Labor and Statistics (as reported in article by Lending Tree).
Do the math…
That means that Inc. 5000 companies actually fail at a HIGHER RATE than non-Inc. 5000 companies.
Clearly “growth” doesn’t fix everything.
And for me, this sad statistic is all too real…
Like I sad earlier in this report, back in 2016 I had three different companies in my portfolio group hit the Inc. 500/5000 lists in the same year.
It sounds impressive until you realize that out of those three companies:
- One (the highest rated on the list) crashed and burned…
- One was “disadventageously sold” to a competitor, and…
- One was (and still is) a massive success
Here’s how it went down…
I lived the 67% Inc. 5000 failure rate…
So, there you have it…
Three companies made the list: one succeeded and two failed.
I lived the 67% failure rate, and that’s why I knew that more growth wasn’t the solution.
If my business was going to scale (without me having to sacrifice my soul in the process), I would need to shift my focus from a “growth at all costs” mindset to a “systemize to scale” mindset.
Now, let’s talk about how we did just that…
How To Build a Scalable Operating System™
Ok, let’s get into it…
I’m going to give you the exact process we went through to build and design our first Scalable Operating System™.
Screenshot of the Scalable Operating System buildout process.
*CLICK HERE to watch a step-by-step video walkthrough.*
Step 1: Map the Value Engines
This is the most important, most foundational asset in any operating system, and yet this is the one that everybody forgets about.
What is a value engine?
A value engine is a visual representation of how a company creates and captures marketplace value through the acquisition of new customers, through the fulfillment of existing customers and through the creation and/or improvement of a company’s product and service offerings.
That sounds fancy, so allow me to simplify it.
At their core, all companies do the same two things:
- We sell the stuff we make/do
- We fulfill the stuff we sold
That’s it.
So the first thing every business owner must do is visualize how these two things happen because it’s impossible to optimize and systemize a process until you have first visualized that process.
To do that, we deploy a technique known as “Business Process Mapping” (a.k.a. Value Flow or Value Engine Mapping).
It sounds complicated (and believe me, some consultants try to make it complicated because they charge big companies big, 6-figure contracts just to map a single Value Engine), but the process is fairly simple.
First, our goal is two map two critical processes:
- How we acquire new customers/clients (a.k.a. Growth Engine), and…
- How we service our customers/clients once we have them (a.k.a. a Fulfillment Engine)
For example, here’s a screenshot of a Growth Engine and its associated Fulfillment Engine for The Scalable Company (the company that published this case study report)…
EXAMPLE GROWTH ENGINE: How The Scalable Company acquires new clients.
EXAMPLE FULFILLMENT ENGINE: How The Scalable Company serves its clients.
But whatever we’re mapping the process is the same.
First, we start with a clean whiteboard and a fresh stack of sticky notes. Then, it’s time to map…
- Step 1: Identify the starting point with one or more sticky notes. For example, for Growth Engines this is usually when a prospect sees an advertisement, and for Fulfillment Engines this is when a new sale is closed. (NOTE: Fulfillment Engines begin where Growth Engines end.)
- Step 2: Identify the ending point with one or more stick notes. For example, the last step of a Growth Engine is when a sale is made, and the last step of a Fulfillment Engine is typically when we ask for a testimonial and/or referral.
- Step 3: Use sticky notes to fill in the “gap” between the beginning and the end by asking, “Then what?” For example, for a Growth Engine, we might say, “Ok, so a prospect sees our ad on Instagram, but then what happens? At that point, someone on the team might say, “They would click the ad and go to our landing page,” at which point you would add a sticky note with the words “Landing Page” on it and continue on.
- Step 4: Connect the dots! Once all the steps and stages are represented on the whiteboard with sticky notes, the final step is to use arrows to connect all the squares to show the flow a prospect will move through a particular Value Engine.
When we’re done, the whiteboard looks something like this…
Photograph taken immediately following a Value Engine Mapping session.
These flowcharts may seem simple but don’t underestimate the power of visualizing how your company creates value.
Not only will it give your team almost instant clarity on what your business does and how it does it, these simple “maps” will also form the foundation of your operating system.
Once your Value Engines are documented, you can then move on to the next step…
Step 2: Identify “Power Stages” and Assign Playbooks
I said earlier that “documenting everything” doesn’t work, but here’s what does work…
…documenting ONLY the most critical tasks and activities that drive real value in your company.
But how do you know which tasks and activities are truly critical?
And how do you know which ones actually drive value?
Simple. Audit your Value Engines by asking…
What you’re looking for are the steps in your Value Engines that are:
- High stakes, and…
- High potential for human error
The stages on your Value Engines that meet this criteria are known as “Power Stages,” and each Power Stage deserves its own playbook.
Again, you don’t need to document everything. In fact, you shouldn’t document everything! Also, you don’t need to document your playbooks right away.
Our rule is: “Document while you do.”
There’s no need for you or your team to set aside dedicated time to build all your playbooks. Just wait until you or someone on your team is performing the Power Stage activity, and record it using a screen capture tool like Loom or an iPhone.
Most of our clients and portfolio companies have between 10 – 20 playbooks. Not 100s…just 10 – 20.
And here’s the best part…
Since you’re only documenting the most critical activities, these playbooks will actually get used.
Now that we have our core value creation systems documented, it’s time to shift our focus to the team…
Step 3: Engineer Your High-Output Team
I said before…
Good people don’t fix broken systems.
Broken systems break good people.
But now that we have solid systems in place, we need to make sure that we have a team that is fully staffed and ready to execute those systems. In other words, you need to clarify WHO is responsible for WHAT.
How do we do this?
Once again, we’re going to go back to our Value Engines, only this time we’re going to ask…
Just in Step 2 when we were choosing which playbooks to document, we’re letting our Value Engines inform job responsibilities.
This is massively different from what other gurus and business books teach.
They would have you start with each employee and ask, “What does this person do?”
This will yield some clarity, but more times than not you get a list of all the things your team members ARE doing without any way of knowing if they’re truly focusing on the most important, most critical, VALUE-CREATING tasks.
That’s why we start with your value creation process (a.k.a. your Value Engines) and work backward.
Instead of asking, “What does this person do?”
…we ask, “Who is uniquely accountable for ensuring this critical step/stage is completely the right way?”
SIDE NOTE: By “right way” we mean according to our documented Playbooks. Are you starting to see how this all fits together? Are you starting to see how this is completely different from other operating system models you might have tried in the past?
Then we use a tool called the High Output Team Canvas to document everyone’s roles and critical areas of accountability…
Screenshot of the High-Output Team Canvas…one of the Scalable OS™ tools.
As you can see, it’s nothing fancy. But the clarity it gives a team is enough to remove virtually all instances of “finger-pointing” and “That’s not my job…”
No more critical tasks slipping through the cracks.
Best of all, the High Output Team Canvas also gives you and your managers a clear picture of:
- Who is overworked? (i.e. the people with too many accountability bullets next to their name…that’s usually you, by the way)
- Who is under-capacity? (i.e. the people without enough accountability bullets next to their name), and…
- Which roles do you need to hire next? (ideally, the ones that remove critical accountability bullets from your list).
Our goal for all our clients is simple…
Zero critical accountability bullets next to your name.
It won’t happen overnight, but if you follow this plan, you will finally have a plan for freeing yourself from the day-to-day “grunt work” and menial tasks, enabling you to focus on just those high-leverage activities you enjoy doing (and that actually make you money).
Now that your system and people are in place, it’s time to move on to metrics and dashboards…
Step 4: Design Your Company Scorecards
Once you have leveraged systems and people to “automate” all the day-to-day tasks, your next objective is to roll out metrics and dashboards that align everyone in your company to the goals and metrics that matter.
In other words, we need to literally get your team “on the same page,” and that page is a Company Scorecard (a.k.a. CEO Dashboard)…
Screenshot of the Company Scorecard (a.k.a. CEO Dashboard)…one of the Scalable OS™ tools.
Here are a few best practices to keep in mind when designing your Company Scorecard:
- Keep it SIMPLE. We’ve invested tens of thousands of dollars in fancy business intelligence solutions, only to return time and time again to Google Sheets. Not only is it free to use,
- Track it WEEKLY. Real-time tracking is too noisy, and monthly tracking lacks agility. That’s why all our teams report their metrics weekly…usually on Mondays for the previous week.
- Make it MANUAL. This is the one that gets me the most pushback, but hear me out. By requiring your team members to enter their metrics manually, two things will happen: 1) they will actually know their numbers, and 2) they will actually own their numbers.
Instead of showing up to meetings surprised that a particular metric is behind target, they’ll see it ahead of time and show up to meetings with a plan to fix it. This is the difference between data and insights, and the best way to graduate to a team that brings insights and a plan (rather than just problems for you to solve) is to require your team members to enter their scorecard metrics MANUALLY each and every week.
- MIRROR your Value Engines. If you’re already using scorecards and dashboards, there’s a good chance that most of the metrics you are tracking are really just “vanity metrics” that make an employee or department look good but that don’t actually drive a key business goal.
So, how do we ensure that the metrics we’re tracking actually matter?
Simple, we go back to our Value Engines and ask…
Once again, we’re letting our value-creation process lead the way.
Instead of selecting metrics at random, we’re selecting the metrics based on the steps and stages that matter the most, which are the steps and stages visualized inside our Value Engines.
Once you know the metrics you’re tracking, the rest of the Company Scorecard design process is fairly straightforward.
First, we need to determine a “Target” or goal for each metric. This ensures everyone is aligned on what winning looks like. (No more revisionist history.)
Second, we fill in each week and update the “Actual” column.
Finally, we compare the “Actual” to the “Target” and manually choose to adjust the color-coded “Status” box:
- GREEN = On Track or Ahead of Target
- YELLOW = Behind Target But With a Plan To Catch Up
- RED = Behind Target and No Plan To Catch Up
Once you have a Company Scorecard in place, management becomes fairly simple…
All you have to do is help your team execute projects that turn red to yellow, and yellow to green.
That’s it…that’s your entire job.
And here’s the best part…
Once your team starts tracking their metrics manually, they’ll start coming up with their own ideas for turning red to yellow, and yellow to green. (No one wants an ugly red status next to their name, so at the very least they’ll show up to the meeting with some kind of plan to improve it.)
Before long, you’ll have a proactive, self-managing team capable of optimizing their own metrics without you, and that’s when things really get fun.
But before that can happen, we need to install some optimization rituals (a.k.a. meetings)…
Step 5: Architect Your Company’s Meeting Rhythm
Look, I get it…you hate meetings.
I hate meetings, too, or rather, I used to hate meetings.
Today, I can honestly say that thanks to the Scalable Operating System™, meeting time is some of the most valuable, highest leveraged time we spend as a team. And that’s because two things are true:
- We leverage preset agendas and Scorecards to drive all our meetings. (I actually have a rule: No scorecard…no meeting.)
- We maintain a “meeting rhythm” so we have LESS but better meetings where everyone shows up prepared and distraction-free.
Here’s our Scalable Meeting Rhythm™…
Diagram of our Scalable Planning Rhythm™.
For us, everything starts with a Clarity Day™ planning meeting where we establish our 3-Year Targets and 12Q Plan™.
Personally, I don’t believe that “BHAGS” (Big, Hairy, Audacious Goals) and “10 Year Visions” are all that helpful for most companies.
The world moves too fast, and more often than not, these “Vision Sessions” turn into the entrepreneurial arts and crafts time where the end result is some eagle-in-flight motivational poster that everyone just rolls their eyes at.
It’s fun…maybe even a little inspiring.
But does it grow the company or buy you any more freedom?
Usually not.
That’s why we start with a 3-Year Target. In my experience, three years is the perfect amount of time to plan for an entrepreneurial company:
- It’s enough time to do something truly meaningful, but…
- It’s not so much time that it’s totally unpredictable.
Once we have our 3-Year Target, we can then break this medium-term goal up into 12 quarterly “chunks,” or as we like to call it, a 12Q Plan™…
Screenshot of the 12Q Planning Canvas…one of the Scalable OS™ tools.
It’s worth pointing out that we don’t do annual planning at The Scalable Company nor is it a component of the Scalable Operating System™.
The beauty of breaking a 3-Year Plan into 12 quarterly chunks is we have an opportunity to plan and even reset every 90 days instead of having to wait a full year.
So every 90 days, my leadership team and I hold a “Quarterly Sprint Planning Meeting,” where we set goals, clarify key metrics, and identify the projects and key initiatives that must be completed in that quarter to achieve our goals.
These meetings last anywhere from a half-day to a full day, and the outcome of this meeting is to produce a document called the “Quarterly Sprint Plan” which is then rolled out to the entire company…
Screenshot of the Quarterly Sprint Planning Canvas…one of the Scalable OS™ tools.
Now that we have our Quarterly Sprint Plan, we can use it to prioritize projects, allocate resources, and even update existing tools such as the Company Scorecard.
And speaking of the Company Scorecard, my leadership team and I also meet weekly for a “90-Minute Pulse Meeting” (a.k.a. Weekly Scorecard Meeting) to review the Company Scorecard and the progress we’re making toward our stated goals and objectives.
In addition, we also hold a “Monthly Business Review” meeting at the close of each month where we ask…
“What changes, if any, do we need to make to our Quarterly Sprint Plan in light of the events and overall performance of the last month.”
In a perfect world, the answer is, “Change nothing…full steam ahead!” because everything is on track and the metrics are GREEN across the board.
But, in the event that a major change or pivot is needed (usually indicated by a series of RED metrics on your Company Scorecard), that’s still a discussion we have just once a month…NOT weekly and definitely not daily.
So just to recap, when you’re running on a Scalable Operating System™ you will:
- Plan in three-year cycles (instead of ludicrously long five- and ten-year cycles)
- Execute in ninety-day sprints (instead of inaccurate annual plans)
- Measure and report in weekly scorecard meetings (instead of waiting a full month to know what’s going on), and, if needed…
- Pivot monthly (instead of abandoning the plan completely when something isn’t going quite right)
Once you have your Scorecards and Meeting Rhythm in place, congratulations! You now have a business that can not only run without you, but can scale without you, too, because your team will have everything they need to fix what’s broken and turn “good” to “great.”
Now there’s just one last tool left to complete to round out our Scalable Operating System™, and it’s maybe the most important one of all.
Step 6: Clarity Compass
It’s a fact…
Companies scale at the rate of good decision-making.
Make a series of good decisions quickly, and you’re likely going to win.
But make too many bad decisions OR take too long to make a good decision, and you’re almost certainly going to lose.
The problem is, the right decision becomes less obvious at scale, which is why you’re constantly bombarded with “shoulder taps” and “Gotta minutes?” from your team all day every day.
It’s not that they’re stupid or clueless…
The problem is, we haven’t equipped them with the tools they need to think like we think (only better).
This where the Clarity Compass™ comes in, and why it’s the final piece of the Scalable Operating System™ buildout process…
Screenshot of the Quarterly Sprint Planning Canvas…one of the Scalable OS™ tools.
Whether you realize it or not, you’re running every major decision through each of the “Four Cases,” and they are:
- COMPANY CASE – “Will this get us closer to our stated goals?”
- CUSTOMER CASE – “Does this align with our company’s purpose/why?”
- CULTURE CASE – “Does this align with our company’s stated values?”
- COMPETITIVE CASE – “Can we expect to win in the marketplace?”
The beauty of the Clarity Compass™ is that it answers all these questions on a single sheet of paper.
- COMPANY CASE = 3-Year Target
- CUSTOMER CASE = Company Purpose Statement
- CULTURE CASE = Core Values
- COMPETITIVE CASE = Strategic Anchors (a.k.a. competitive advantages)
Armed with this tool (plus their “in-the-trenches” experience you don’t have), your team can now make decisions as good or even better than you can make.
Your 3-Year Target acts as finish line everyone is sprinting toward. Your Company Purpose acts as the “fuel” that pushes everyone onward. And your Core Values and Strategic Anchors keep everyone aligned and “on track.”
Start requiring your teams to bring your company’s Clarity Compass to every meeting, and you’ll be pleasantly surprised at the number of high-quality decisions they’re able to make all on their own…
…no more “shoulder taps”…
…no more “Gotta minutes?”…
…instead, you’ll have a team of doers making decisions in real-time as good, or even better, than you would.
And that, my friend, is when your business is truly scalable…
…and when you are truly free.
If you’ve read/watched this far…
Let’s talk next steps
At this point, I would like to formally invite you to book a demo session with my team to discuss building and installing a Scalable Operating System™ in your business.
We can only work with a handful of founders and CEOs at a time, but if you are a business owner whose company is generating between $2 million and $50 million annually with 10+ employees, and you’d like to exit the day-to-day “grunt work” so you can focus on higher-level tasks (or just take a much-needed break) we can probably help.
We have already created scale and freedom for founders and CEOs of B2B service firms, professional services, home services, construction, ecommerce, software/SaaS, retail…you name it.
If you’re a business owner who is stuck in marketing, sales, fulfillment, or all of the above, we can help.
For the rest of this report, I’m going to break down how our process works, how you can get started, and what you’ll get by working with us…
First, you need to know this works.
If I can leverage the Scalable Operating System™ to scale six different companies simultaneously in our $200M+ holding company…
…without getting stuck in endless meetings…
…without being enslaved to my email inbox…
…without enduring the endless “shoulder taps” and “Gotta minutes?” and…
…without burning out…
…all while taking at least one 30-day vacation every year…
…then I have to believe this system will help create freedom and scale for you and your business, too.
But if my story isn’t proof enough, you can also read and watch some of our client stories on our website, and we’ll send you even more after you book your demo call.
Second, I cannot stress enough: there isn’t “one thing” that makes the Scalable Operating System™ work.
Hopefully, by now you see how the six components work together in harmony, and how if even one piece is missing (or if you just get some of the pieces in the wrong order), the entire machine breaks down.
In fact, if you have attempted to “systemize your business” in the past, you can probably now see why it didn’t work!
This is a complete system…it’s not “pick and choose.”
And while we have boiled this process down to an exact science, it could easily take 100+ hours if you tried to implement it on your own, and even then you still wouldn’t know what “success” looks like because you’ve never built or deployed an operating system like this before.
Third, this is NOT a course.
I am licensing you the same system my partners and I are using to scale our internal portfolio companies.
You not only get to use the same tools that we use, you get to leverage my internal team of experts and facilitators (the same people my portfolio company CEOs have access to) to build and install a Scalable Operating System™ for your business.
Yes, there is video content to accelerate the process and to help with training and and enabling your own team, but above all else…
…this is a 1-on-1 implementation program.
It’s not about learning, it’s about building an asset capable of running and scaling your business without you.
So, let’s get into exactly how it works…
Over the next 16 weeks, together, we’ll install 3 key systems in the following order:
- The Value Automator™ – First, we’ll systemize and “automate” the core value drivers for your company so the important work always gets done the right way…by someone other than YOU. Your Company Source Code includes all your checklists and SOPs, as well as a team accountability chart so everyone knows what needs to be done and who needs to do it. The Result: You no longer have to be “in the weeds” of your business, because your team is doing all the “grunt work” instead of you.
- The CEO Dashboard™ – Second, we’ll deploy team and company metrics dashboards across your entire organization, and pair those dashboards with a meeting rhythm so everyone in your company knows exactly what needs to be fixed and optimized. The Result: You can opt out of virtually all company meetings because you know your team has everything they need to make data-driven decisions.
- The Clarity Compass™ – Finally, we’ll create and install a decision-making framework known as a “Clarity Compass” that documents your company’s goals, mission, values, and key strategic advantages (which is the one everyone else forgets about) so everyone on your team knows how to think and act like you think and act. The Result: You have the confidence and freedom to step away when and if you want to because you have watched your people (including lower-level team members) make decisions as good or even better than you would.
Together, we’ll install these 3 systems, which will not only free you from the “day-to-day,” but will also give you the time and freedom you need to focus on the high-leverage work that will scale your business. And you’ll have us to support you every step of the way for the full 16 weeks.
This process will happen in two phases…
In Phase 1, we’ll design and build a fully customized “operating system” for your business. To accomplish this, we’ll leverage our six (6) proprietary OS tools to:
- Visually map your company’s core “value drivers” so you and everyone on your team have a clear picture of how you make and deliver your products and services, and also how you generate new leads, customers, and clients
- Create checklists and SOPs around your most critical tasks and activities so everyone knows exactly what they need to be doing and how to do it (and so your company’s “secret sauce” is documented and protected)
- Define your organizational structure and assign clear areas of accountability so everyone knows who is responsible for what, meaning no more “finger-pointing” and no more critical tasks “slipping through the cracks” ever again
- Design metrics scorecards and dashboards so everyone in the company knows the key performance indicators (KPIs) that need to be improved to achieve the company’s goals
- Architect a 4-part meeting rhythm so your team has less, but better, meetings where issues and challenges are SOLVED…not merely discussed (and that YOU don’t even need to attend)
- Build a decision-making framework (we call it a “Clarity Compass”) so your team is fully empowered and enabled to make decisions as good or better than you (and so you feel comfortable fully stepping out of the day-to-day because no one is asking if you “Got a minute?” any more.)
In Phase 2, we’ll install your operating system in your business. We’ll execute our step-by-step “OS Installation Plan,” and we’ll also help you create a custom and branded “OS Dashboard” that will be accessible to everyone in the company. This dashboard will serve as the “single source of truth” for your business. It will be the “brain” and nerve center for your company, which means your business will no longer be dependent on you.
The goal is simple: A scalable business you can exit one day, whether that means selling the company completely or just “exiting” the in-the-trenches, day-to-day “grunt work” so you can focus on the high-leverage work you love to do that will enable your business to scale to the next level…in 16 weeks or less.
Either way, when this process is complete, we’re going to encourage you to take a 30-day vacation. Not only are you likely overdue for some rest and rejuvenation, but this is also the ultimate test for your new operating system.
And again, this is NOT a course and this is NOT a group coaching program.
You are getting direct, 1:1 support in documenting systems, managing teams, and other aspects of running a successful, scalable business.
You’ll meet bi-weekly with a Scalable Business Advisor who knows our systems and frameworks and who is fully equipped to dig into your business and unlock new sources of revenue and profit.
Your advisor will shepherd you and your leadership team through both Phase 1 (Build) and Phase 2 (Install), and their 1:1 expert guidance will ensure you never get stuck or lose momentum.
You and your team will also get real-time support in our 24/7 client community as well as our twice-weekly group drop-in calls. (See additional benefits below.)
The point is, you’ll never get “stuck” because you’ll have a team of mentors, coaches, and advisors to guide you every step of the way.
The only catch is, due to the 1-on-1 nature of this program, we only have the capacity to take on 20 new clients each month, which is why we frequently have a 2 – 3 month waiting list.
So, hopefully it goes without saying, but the sooner you book your demo call, the better.
When you do, you’ll fill out a few simple questions that will allow us to research your business and come to our call fully prepared to show you the next steps for installing a Scalable Operating System™ in your business.
Look, if you’re tired of being owned by your business and you’re ready to achieve the wealth, freedom, and impact you’ve wanted since Day 1, take a few minutes and book a demo call with my team right now while it’s still fresh in your mind.
I can’t wait for you to see the difference a Scalable Operating System™ can make in your business and your life, and I sincerely look forward to working with you.
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