Is your business delivering all that you envisioned when you launched it?
If you’re like most entrepreneurs, you dreamt of a business that was not only profitable but rewarding for you as an owner and for your team members.
If instead, running your business has become stressful or frustrating, or if it is not delivering the financial freedom you imagined, then EOS (Entrepreneurial Operating System) may be the secret weapon you need to turn things around.
So, what is EOS? EOS Worldwide LLC, a growing organization that provides training and resources to leaders implementing and using the EOS system, defines EOS as “a complete set of simple concepts and practical tools that has helped thousands of entrepreneurs get what they want from their businesses”.
EOS can catapult your business to a higher level. It can help you and your leadership team zero in on your vision and instill focus, discipline, and accountability in every team member, and help build a cohesive, healthy organization.
The EOS system has 6 core components. Adopting these components will simplify your day-to-day life and you will see amazing results. You and your team will feel less stress and more happiness in your business.
Mastering the 6 core components gives your business Traction. Attaining Traction allows your business to function as a self-sustaining mechanism.
Here are the 6 core components of EOS and how you can use them to achieve Traction and transform your business.
#1: Vision
Do you have a crystal-clear vision of your company’s reason for being? For what greater good did you begin your business in the first place? To have a clear vision, you must know who and what your company is, who you serve, where you’re going and how you’ll get there.
Once you have the answers to these questions, create your 10-year vision and put it in writing. Include a solid, yet simple definition of your niche. Then break it down to a written 3-year vision, and finally a 1-year plan. Support your 1-year plan with a financial budget.
Share your long and short-term vision with everyone in your organization. This will create and sustain a single voice and a single culture.
All key decisions you make for your business from now on should be based on your long-term vision, short-term plan, and budget. Keeping things simple and focusing on these core tools will relieve a lot of the day-to-day stress you feel conducting your business.
#2: People
Of course, you want to have the best and brightest people on your team. There are a few things to consider.
First, you want have core value fit. What are your company’s core values? If you don’t know, take some time to reflect and define them. Each person on your team should have core value alignment with those of the company. This is a powerful tool to use when hiring new talent and evaluating your current staff.
Everyone has their own unique strengths and talents. Each member of your leadership team should rise to the peak of their abilities. They should be better at what they do than you, the business owner. They must be agile, able to embrace change, and excited to break through to the next level. All actions by leadership should be based on what’s best for the company as a whole to reach its vision.
To accelerate growth, it’s important to structure the organization in a simple, straightforward way, which enables operations to be predictable and systematized. Create your structure, then fill the seats with the best people. Delegating and elevating team members empowers them to grow, which steers the company’s overall growth.
Every person on your team should be playing to their strengths. Regular evaluations of each team member, starting with leadership, will reveal possible weaknesses. Ask these questions about each team member. Do they understand the culture? Do they understand their role? Do they know how to execute their job? Do they have a desire to success and the ability to do so?
It may sound harsh, but when it comes to people that don’t have core value fit or work at a rock-star level, you are better off parting ways. Let that person move on to find a scenario that meshes with their personal vision and goals. Then focus your energy on recruiting and nurturing resources that align with your core values, culture, and performance expectations.
Two key positions at the leadership level are the Visionary and the Integrator. The Visionary is often the owner of the business. He or she has an entrepreneurial spirit, is a generator of innovative ideas, a solver of high-level problems, and a relationship builder. The Integrator understands all the major functions of the business – sales, marketing, operations, finance, etc. – and is the glue that holds all the pieces of the business together.
#3: Data
Once you have a vision and plan for where your company is going and you have the right people in the right seats, you want to be confident that you’re moving in the direction of your goals and vision. For that, you need data to measure your progress.
First, decide what you’re going to measure. Based on your 1-year plan and your budget, set 3 to 7 important priorities for the year. These may be revenue goals, profitability targets, or other organizational metrics. Break these goals down into quarterly goals, or Rocks as they’re called in the EOS model.
The practice of setting and completing quarterly Rocks are essential for achieving Traction. You may have heard the analogy of filling a glass, first with rocks, then with pebbles, then with sand and finally with water. If you don’t put the rocks in the glass first, you will not be able to fit them in the later after the pebbles, sand and water have consumed the space.
The same is true for your highest priority goals. By conquering your Rocks first, you accomplish more by doing less. You are working on the business’s most important goals and moving toward your ultimate vision without being distracted by smaller, less critical issues.
Quarterly Rocks are defined first at the leadership level. As you move downward in the organization, each level’s Rocks support those of the level above. Rocks should be in writing and they should be “SMART”: specific, measurable, attainable, relevant, and time-based.
It is one thing to have a vision, 1-year goals, and quarterly Rocks, but how do you measure your progress? For this, you need to define specific, critical activities to be performed weekly, and assign a goal for each activity.
Performance of these activities are tracked on a scorecard. Tracking five to fifteen activities is a good rule of thumb. If you try to track too many activities, you lose focus. Track too few and you risk being ineffective in reaching traction toward your goals.
A scorecard is a simple, written document, such as a spreadsheet, where weekly numbers are tracked. It is a visual representation of whether or not you are on track with its goals. Scorecard metrics may be financial or may be related to completion of certain activities or quality standards.
Here’s an example. Let’s say to have a specific revenue growth amount for the current quarter. To support that growth goal, you set a quarterly Rock to win 10 new clients this quarter. A weekly activity to support your Rock might be to take part in 3 networking events per week. On the scorecard, you track actual networking activities against the weekly goal.
| Week | Jan 8 | Jan 15 | Jan 22 | Jan 29 | Feb 5 | Feb 12 | Feb 19 | Feb 26 | Etc. |
| Networking Goal | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 |
| Networking Actual | 3 | 4 | 1 | 2 | 4 | 3 | 2 | 3 | 3 |
Each person in your organization should have at least one scorecard metric to which they are accountable. This guides them in their work, shows commitment, and delivers clarity and focus.
#4: Issues
Issues are obstacles that somehow prevent your company from reaching its goals. An issue may prevent completion of a Rock, negatively affect a scorecard metric, or threaten the cohesiveness of a core process. Issues may be operational, or they may be related to personnel.
As issues are encountered, they are added to a list to be addressed weekly. They are generally stated as a problem. Weekly, team members discuss issues and identify the root causes. One or more to-dos are then assigned to individuals to resolve the issues. In each consecutive week, to-dos are tracked to ensure they are completed, and the issue is solved.
Here’s an example. You have a quarterly Rock to begin an email marketing campaign to a specific target market. You feel that to be successful, you need a marketing collateral piece to offer to your prospects. The issue is that you don’t have a marketing piece that is effective. After the issue is discussed by the team, a to-do task is assigned to an individual to create such a document. In each subsequent week, the person to whom the to-do was assigned is held accountable to report on status until the to-do is completed.
#5: Process
Every business has core processes that define how the company functions. Some of the most common are human resources, marketing, sales, operations, accounting, and customer retention.
Each core process should be written and followed by everyone in the organization. When processes are consistent and fine-tuned, your company runs like a well-oiled machine. Processes executed the same way every time produce a reliable, quality, error-free result.
Giving each process a simple name betters your chances that everyone in the company will remember it and follow it easily. Visual depictions of processes, in 3 to 7 major steps, are a terrific way to entrench them in your organization.
Bind all your processes together and you have a streamlined, cohesive, and consistent way that your company does business.
#6: Traction
Traction is achieved by following the core components of EOS. When you have Traction in your organization, you have disciplined action and accountability by every team member. Everyone is focused on the most important things that elevate your business, helping it reach its goals and thrive.
Such actions and accountability are demonstrated and measured in weekly meetings. The meeting format is called the L10. The L10 format includes a segue, scorecard and Rock review, headlines, issues, to-dos and feedback. A certain amount of time is allotted, and meetings start and end on time.
Each department or operational segment has an L10 weekly. Following this format will keep the teams organized, on task, and productive.
Segue: Begin each meeting with the sharing of good news. Each person shares a personal and business “best” since the last L10. The segue serves as an icebreaker, builds relationships amongst the team members, and allows for the celebrations of wins.
Scorecard Review: Read each scorecard item and state whether it is “on track” or “off track”. Metrics “off track” are added to the issues list for discussion.
Rock Review: Read each Rock and state whether it is “on track” or “off track”. Like the scorecard review, Rocks that are “off track” are added to the issues list.
Headlines: Share announcements for the general knowledge of the team. They may be positive or negative news about a customer or employee. If the headline reveals an issue, it is added to the issues list.
To-Do’s: Review the to-do list and mark each one “done” or “not done”. This keeps everyone with assigned to-do’s accountable for their completion. If there is an issue preventing the completion of a to-do, it is added to the issues list.
Issues: The bulk of the allotted meeting time should be spent on issues. Anyone can record an issue and the team decides which issues are the most important to solve. Everyone takes part in the discussion, analysis, and resolution. Usually, solving an issue requires someone to act, and a new to-do is added for that action. As each issue is resolved, everyone is clear and on the same page with the next steps and/or the final outcome.
Conclude: At the end of each meeting, the to-dos are summarized. Then, each team member rates the meeting on a scale of 1 to 10, with a goal of 8 or better. If anyone rates the meeting less that 8, he or she supplies a reason to the team.
Are you ready to adopt EOS?
If you’re feeling stuck, stagnant, frustrated, or otherwise disillusioned in your business, EOS may be the secret weapon you need to catapult your business to a higher level of profitability and contribution. Get realigned with your original goals and vision. Invest in the adoption of EOS and watch your business thrive, while you regain feelings of excitement, energy, and meaning.
To learn more about EOS, we highly recommend this book: Traction: Get a Grip on Your Business, by Gino Wickman.
If you’re ready to take the next steps in your EOS journey, and looking for an Integrator to guide you, we’re happy to introduce you to professionals in our network with expertise and specialties that align with your needs. Let us know how we can help.
At All In One Accounting, we take businesses from financial chaos to business clarity and beyond. Our elite team of Accountants, Controllers, and CFOs are ready to help you in these uncertain times. Visit our website here for a free consultation with one of our accounting professionals.
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