I’ve been operating my business on EOS (Entrepreneurial Operating System) for just about three years. It’s pretty common that I advocate for other entrepreneurs to look into the methodology by starting with the book Traction or Get a Grip. I actually read Get a Grip first – which I’m glad I did since it walks through a story with an EOS Implementer working with a business. Had I not started there and read Traction instead first, I might not have hired an Implementer.
Over the last couple of years I have been asked a lot of questions about EOS.
Why do they call it an “operating system”?
Like a lot of entrepreneurs, I didn’t go to business school. I love to build products and services and solve problems. I have a lot of experience running a business. What I found for years was that I spent an incredible amount of my time working out some basic things around meetings, structure, planning, and people. I felt like I was reinventing the wheel. And I was.
Imagine that you wanted to write an amazing blog post, but before you got into your favorite writing application that you needed to first build an operating system for your computer. That would sound pretty crazy. But entrepreneurs do it every day. We get a product or service to market, get some traction, and then start building a business around it. I found myself spending more time working out the business than serving my customers.
So I installed an operating system.
EOS doesn’t really make your product or service great. Just like it doesn’t really matter if you are on Windows or Mac for most of us. The system just provides the blank canvas for you to work within.
Can I go it alone or do I need to hire an Implementer?
If you are just starting out and you don’t have the budget, try to find another entrepreneur – or a self-implementer group like Traction Groups – that are on EOS so you can learn from them. There are a lot of pitfalls and obstacles that can stand in your way and become major barriers to you getting the most out of the system.
When we first hired Bobi, she said that we’d work together for about 18-months and then we could go it alone. We’re way past that. Having a facilitator and trained EOS expert to help me get the most out of my quarterly and annual offsite sessions has proven a high ROI. I get to be fully present in thinking about the issues, ideas, and vision for my business. I’m not worried about running my agenda.
I’ve also been known to politic a bit. Bobi is great at reeling me in.
How much does an EOS Implementer cost?
I won’t publish Bobi’s prices since it’s not my business. But, EOS told me the range is between $3,000 and $10,000 per daily offsite session. We have three “quarterlies” that are each one day and then an “annual” that is two days. We also do our sessions offsite – so you might also incur some meeting room costs and catering.
I think all-in it costs us around $20k-ish per year. It is money well spent.
What does an EOS Implementer do?
Think of them as your guide to getting your business operating on EOS effectively. They will also be your facilitator for your offsite meetings. Bobi runs our agenda, keeps us on point, helps us gain new vantage points when needed, and offers advice and perspective from her experience.
I’m not sure what other Implementers do, but in between meetings, Bobi makes herself available to our leadership team for impromptu calls. I have been known to shoot an EOS “SOS” of sorts on occasion to Bobi when in crisis. She considers this part of our quarterly investment in her and does not nickel and dime us for this time. This availability has helped me get unstuck in a big way.
I’ve also used Bobi as an adviser to big decisions in the business. This could be around personnel changes or even an emergency pivot mid-quarter. Over the last couple of years she has gotten to know our business from the inside – the most intimate details about our financials, people, goals, vision, etc. Having an adviser with this perspective that is outside of the business is priceless. Sometimes it’s hard to read the label from inside the bottle.
What kind of obstacles did you have early on?
I think like anything, even though there is clear and concise instructions, they are open to interpretation. EOS is a lot to learn – and you are running a business simultaneously – so it can feel like you are taking a step back. I’m going to break down a few of the components to answer this question better:
- L10 Meetings
These weekly sessions are the heartbeat of EOS. One of the things that we stumbled with was how to prioritize issues. We would have eight or nine issues on the whiteboard, and then we would “prioritize” them and we’d spend 15-minutes arguing about how to rank them. Our mistake was that we were ranking the whole list. The trick here is to just rank the top-three issues. A simple “1, 2, 3” next to the top issues and then you work those. When you finish the third, you re-rank the top three and start over.We also implemented a guideline of two types of issues that get precedence over others – any issue related to a “Company Rock” trumps all others and get’s first priority; any issue related to an “Individual Rock” then gets the next priority. After that it goes based on any urgent/important issues or things that people feel are pressing. You want to spend as much time IDS’ing issues, so prioritization should be done in seconds – not minutes. Get through it so you can dig in.
Oh the frustration! Scorecarding has probably been one of the most painful areas of EOS for us. Over the last three years, we have tracked so many numbers that are worthless indicators of our core business. We’ve spent thousands and thousands of dollars on developers and analytics platforms to get numbers out of our business to give us a glimpse of what is going on. After almost three years, we finally have a really good, concise business scorecard that tells us key numbers that indicate the health of the business – from both a leading and lagging indicator. Bobi always said “less is better” to keep us from going too number crazy. But it didn’t matter. We threw a lot of “wouldn’t it be nice to know” type numbers on our scorecard for a while.I recommend using the Getting What You Want exercise here and do your best to pick a couple of numbers that are true indicators of what you are trying to achieve in your business. Just because you are interested in learning a number in your business, doesn’t mean you need to put it on your scorecard.The last thing I’ll say here is that we struggled with the difference in a scorecard metric and an individual daily measurable. Some people in the business won’t have scorecard numbers measured on a weekly basis. For those folks, a daily measurable is great. One of my VA that handles collections has a daily measurable for “dollars collected.”
- Accountability Chart
Our organization ballooned out after we first implemented EOS. I think our chart had something like 30-seats. We countered that with an over-simplification down to about six seats and finally settled on a really good structure of 17 seats. One of the pitfalls I found was when you had an “unaccounted for seat” in the organization. Meaning, someone on your team is accountable for a regular task or responsibility and it is not on your accountability chart. And then in other cases, we turned individual role accountabilities into entire seats.I also found that we put individual roles and responsibilities into a seat that were aspirational. Just like Jim Collins said there are core values and aspirational values – you want to be careful to avoid giving someone accountabilities that don’t really exist in your business but sound like a good idea when you are structuring your chart. An accountability chart really isn’t a creative exercise. You should do your best to capture what is actually happening in your business today – as-is – without making up tasks or responsibilities that don’t really exist.
These are the quarterly “informal” reviews of team members. Be careful not to turn these into a formal review. The purpose of a 555 is an informal check-in. This should be done over lunch or breakfast in a casual environment outside of the office. Otherwise you’ll find yourself resisting 555’s if you make them more like formal reviews since it will feel like a lot of work.
Ohhh you heavy, heavy loads. Rocks are quarterly priorities that you choose to push your business to the next level during your off-sites. Sometimes I feel like the Cookie Monster when it comes to rocks. Perhaps I drink too much coffee during our planning sessions. Early on I think it’s natural to think that you want to get everything done in a quarter. What I’ve come to realize is three months isn’t a very long time.What you want to avoid when it comes to rocks is choosing too many, not getting them done, and then getting into your next quarterly with either half finished rocks or being totally burned out from overworking yourself. One or two individual rocks for a quarter go a long way. One or two company rocks go even farther.A really important thing to understand is how relative the quality of a rock is getting done and how much you take on. Rocks ARE NOT todo’s. They aren’t something to check off a list. For example, if my rock is to “launch a new website” but I take on two other rocks along with that one. There is a giant continuum when it comes to the quality and effectiveness of the output for a thing like “launch a new website” based on how much other stuff I have going on. If that was my only priority for a quarter, I would probably put a lot more effort and thought into it versus trying to rebuild my website while balancing two other big priorities at the same time. This trade-off is important to think about when you are planning your rocks.If you overcommit and end up completing a rock, but you didn’t really get it done to set yourself up for long term success, what you’ll find is it impacts your rocks and todo’s downstream. For instance, if you cut corners on your new website and it doesn’t end up producing new leads and customers for your business, then you might find yourself trying to take on rocks in the future to solve these problems.I stole my mantra for Rocks from Essentialism – “less but better.”
Why is EOS causing problems in my business?
I have found myself trying to blame EOS several times over the course of using the system. Especially when we would uncover a purpose, trajectory, or issue that caused me a lot of stress. I think it’s easy when you uncover a big stinking problem with an EOS tool to think the resulting stress or frustration from that issue is the fault of EOS.
We have uncovered a lot of problems with our weekly meetings and quarterly offsites. We’ve aimed for big goals in our annuals. We’ve made a LOT of decisions and not all of these have turned out great for us or without causing someone grief.
Here is an example of heartache that have happened during the course of EOS activities:
- Eliminating jobs ie. layoffs
- Changing directions and dropping products or services
- Realizing someone wasn’t performing and firing them
- Realizing someone wasn’t a culture fit and firing them or they quit
- Arguing about the direction and purpose with my business partner
- Taking on new responsibility that was outside of my comfort zone
- Engaging in frustrating disagreements with team members
- Being disappointed about missing a goal or objective
- Over-committing to too many priorities or Rocks
The best analogy that I can provide about EOS causing problems is to compare it again to a computer operating system and the quality of what you produce on said operating system. Sure there are times that Windows doesn’t bend to my will, but usually that’s because of me, not it. And the quality of my work or output really is independent of a modern day operating system.
There have been times where I thought I would be better off without discovery key issues in my business or aiming for big goals – but that’s just ridiculous. I’d rather get into the dirt – no matter how dirty – and build an amazing business. EOS is probably not causing your problems. It’s just bringing them to light – and that’s a good thing.
How long does it take to get to 100% in all of the key areas?
Perfection is unattainable according to Bobi. And how you judge yourself in your key EOS areas is kind of up to you. Very subjective. You’re 60% on data might be my 90%. I was told that it takes about three years before you feel like it’s fully implemented. Might sound like a long time, but it flies by…
I think I will still be discovering and learning about how to leverage EOS as our business operating system for many more years to come. There’s so much growth opportunity when it comes to being a better entrepreneur. I feel like the second I get to a 90% confidence – I’ll also understand a specific area even better and realize how much more I have to learn. I think they call that the expert dilemma or something – where you don’t really know what you don’t know until you become an expert at something and then you’re like “I know nothing!”
I felt measured breakthroughs for EOS at six months, a year, and eighteen months. A bit after two years I felt like I took a big step backwards. As I approach year three, I’m feeling a new level of optimism in our six key areas.
Is my company too small to adopt EOS?
While the organization says that EOS is a great platform for companies ranging from $2mm annually to $50mm – it can be transformational for smaller businesses too. We were less than $1m when we adopted it and are now close to $2m.
I have seen entrepreneurs adopt the framework with $100k in annual revenues and even $50k. I think there are fundamental ideas within EOS that can be powerful for a business at any size:
- Create a simple vision and business plan that can fit on one to two sheets of paper
- Keep a regular standing meeting where you meet with your team and work on core issues
- Track a few numbers on a weekly basis to get a read on the health of your business
- Take one day per quarter and two days per year to step completely out of your business and “work on the business”
- Continuously work to improve your business’s Vision, Data, Process, People, Issues and to gain Traction.
One disadvantage of being a small business with limited revenue is that it will be tough to hire an Implementer.
Can I mix EOS with other business management systems?
The folks at EOS advocate that you keep to a single system to run your business. It’s better this way to reduce confusion or conflict of how you operate. That being said, you might find that specific departments or teams adopt things like “agile” to manage projects or quality assurance teams might take concepts from Six Sigma – that’s ok. What EOS wants you to avoid is mixing and matching how you approach your overall company operating system.
I’ve gotten pushback from people on this a bit. I tend to run pretty orthodox EOS and work to avoid bringing in other systems. But recently I found a conflict because I started using the Who method to improve our hiring processes and they use a “Scorecard” as a way to outline a job position and desired outcomes. Just this language being the same as our business scorecard from EOS caused a lot of confusion in our meetings when it came to todo’s around hiring new team members.
That’s it for now!
If you have questions about EOS, let me know by leaving a comment below. Happy to add to this guide over time.