Traction Page 19

  • The V/TO

  • The Accountability Chart

  • Rocks

  • The Meeting Pulse

  • The Scorecard

  The other tools will follow in the order of priority that you establish as a leadership team based on the organization’s current state and issues.

  * * *

  To help your employees completely understand EOS and the foundational tools, have them read What the Heck Is EOS? Written with my co-author, Tom Bouwer, it is a complete guide for employees in companies running on EOS.

  * * *

  YOU CAN ONLY MOVE AT YOUR OWN SPEED

  Be patient with this process. I originally believed I could advance every company through the process at the same speed. In Month One, the Accountability Chart would be completed. In Month Two, the perfect leadership team would be in place. In Month Three, everyone would have mastered Rocks and created a solid Meeting Pulse. By the end of Month Six, all processes would be documented. After many years, I have come to realize that this goal is unrealistic. Each company moves forward at its own pace. Forcing it to move any faster could be damaging.

  Two EOS clients from different ends of the spectrum make this point clear. Without giving names, the first client made two key leadership team changes in the first three months of the process. That means he removed two key people from the organization and replaced them in 90 days. That is a blinding speed. The second client took two and a half years to make the first change on his team, and after four years, he has yet to make the second. This is not a criticism. If I pushed him any faster, it would actually be detrimental. He must feel ready to make the decision. In the meantime, the company is still growing at about 8 percent per year.

  The other determining factor of how fast you can move is the current state of the company and the number of people in it. It takes longer to turn a large ship than a small one. A 200-person organization is going to take longer to change than a 15-person organization. If you have to turn over 50 percent of your people, the process will take longer than if you have to turn over 10 percent.

  McKinley is a textbook example of rollout. Keep in mind that McKinley is a 700-person company, one of the largest real estate investment and property management companies in the United States. Upon completing our first few sessions, the leadership team went to work on rolling out the foundational tools (V/TO, Accountability Chart, Rocks, Meeting Pulse, and Scorecard) one tier at a time. A full year passed before the tools were understood and implemented by every person in the organization. In Year Two, they documented, simplified, and trained everyone in their core processes—their common platform, as they called it. Year Three saw them rolling out a measurable for everyone and educating each person on how he or she contributes to the company’s financial success, while tying compensation to it. Each year CEO Albert Berriz defined the right focus for the company and exercised discipline with flawless consistency. Three years might seem like a long time, but McKinley is a big ship. To see how far they have come in three short years is remarkable. If your ship is smaller, you may be able to make the transition faster.

  One of the fastest companies to roll out the tools was Professional Grounds Services. It’s a 100-employee landscape and snow-removal company that does large office and industrial projects. It rolled out the foundational tools in less than a year. In that time, Professional Grounds Services shared its V/TO with everyone, implemented a new structure, removed a key person from the leadership team, gave everyone a number, and ensured its processes were being documented and followed. Nowadays, the company tears through issues with the best of them. It’s a true case study in efficient execution.

  WHY IT WORKS

  The reason EOS works in any kind of organization is that it’s based on human nature. The entire system is built around how people really operate:

  • The 90-Day World stems from the reality that humans can only focus that long.

  • The To-Do List in the weekly meeting is designed to ensure accountability. When people know someone is going to check up on what they committed to, they do it.

  • The V/TO is designed to get your vision out of your head and into the heads of others using a simplified approach of answering only eight questions. This makes it easier for people to see. When they can see it, they will believe it and it’s more likely to happen.

  • Data forces you to give people numbers so you can measure achievement. People relate to numbers because measuring is a natural human tendency. It creates a benchmark. If you create a culture in your sales department of attending two prospect appointments a week, people will strive to hit that mark. Setting measurable targets will direct their activity.

  • Core values go to the heart of human nature. Like attracts like. People who are like-minded work well with each other. Different people have different values, but when you meet someone who has yours, there is an instant fit.

  • The Meeting Pulse forces people to “keep the circles connected,” as Sam Cupp would say. People need to stay connected. The saying “Out of sight, out of mind” is true in any company. If you don’t stay connected, you’re going to start to stray and people will start to work at cross-purposes.

  • The Issues Solving Track addresses the natural tendency to avoid conflict, hoping that a problem will go away on its own. It won’t, and by giving people a track to follow—IDS—they will solve it and feel better that they did.

  • A single system directs talent and energy in one direction. It gets everyone speaking the same language and playing by the same rules. You move forward more quickly and everybody wins.

  THE “CLICK"

  At some point in the process comes the big “aha” moment when everyone gets it. Everything will “click” for your leadership team. They will see all the pieces of the puzzle come together and clearly understand how EOS is a complete system and why it works. One client, a premier marketing and communications company with clients such as General Motors, NBC Universal, Master Lock, and Stanley, had the big “click” exactly one year after starting the process. It was during the segue in a quarterly session.

  While discussing what was working, the leadership team shared things such as, “Issues are being pushed down to the appropriate team and being solved,” “We are making decisions with our core focus in mind,” “Everyone is focused on Rocks that align with the company goals,” and “I see how everyone being clear on and following the process is going to lead to better communication, fewer mistakes, and happier clients.” That is the moment I live for. It’s the lightbulb turning on. It will occur anywhere from the first six months to 36 months. I never know when it will happen, but when it does, the organization takes off from there.

  YOU HAVE TO DO THE WORK

  Don’t think that your company will get better simply because you’ve read this book or attended an EOS session. You’ll still need to do the work. You’ll need to manage your people, talk to your clients, make tough decisions, and do all of the daily blocking and tackling that goes on inside a business. When Dan Israel of ASI realized after a year into the process that he and his team were suffering from neglecting the process, he shared this analogy: “It’s like going to the doctor and not taking the medicine, thinking that going to the doctor is the cure.” After Dan’s realization, they sprang into real, meaningful action, and are now generating three times the profit as when they started the process. That’s not because of me, but because they did the work.

  STAY COMMITTED TO THE 90-DAY WORLD

  Once you’re on track, occasionally you or members of your leadership team will doubt the need for the quarterly meeting. Occasionally I have to explain to a client why he or she needs to hold the quarterly meetings when “everything is going well.” At the end of the session, the client always says, “We really needed that.” A quarterly meeting is essential whether things are going well or not. You’ll need to keep everyone on the same page and make sure you’re all on track for your vision by reviewing how you did last q
uarter and setting next quarter’s Rocks. If you let a few quarters go by without the meetings, you will end up right back where you started. It’s like taking your foot off of the gas pedal; you’re not going to come to a screeching halt. You’ll just coast until you eventually come to a stop.

  Another common excuse to avoid meetings is that you’re all too busy or that things are too chaotic. This is all the more reason to meet. Don’t worry about what hasn’t been accomplished. You must come together, assess where you are, reset, and take on the next quarter.

  YOU WILL HIT THE CEILING AGAIN

  As your numbers start to climb, you will actually feel a difference. You’ll start to gain traction and move toward your vision. At some point, though, you will hit another ceiling. When this happens, you have to continue to practice the five leadership abilities. You have to:

  1. Simplify, using the EOS tools. Remember that less is more. When everything is important, nothing is important.

  2. Delegate and elevate by knowing when you and others are at capacity.

  3. Predict well, both for the long term and short term, through your V/TO, Scorecard, and Rock setting and by following the Issues Solving Track.

  4. Systemize by consistently managing your core processes.

  5. Structure your organization the right way using the Accountability Chart, which continually evolves as you grow.

  As a result of continuing to hone these five leadership abilities, you will break through the ceiling every time you hit it.

  Niche Retail is a good example. When I started working with the company four years ago, it hit its first ceiling at around $4 million in revenue. Last year, it hit the ceiling again at $12 million. Niche Retail had to make a few changes to its structure and staff, which involved moving its entire customer service department from Minneapolis to Michigan. It also completely overhauled the finance department and implemented a new IT system organization-wide. As a result, it broke through again and is on track for $18 million in revenue this year. Just like Niche Retail, you too will grow until you hit another ceiling. If you’re willing to stay disciplined and continually focus on the Six Key Components, you will break through the next one as well.

  BIGGER ISN’T ALWAYS BETTER

  As we said earlier, growth for growth’s sake is normally a mistake. Being a $100-million company is not all it’s cracked up to be. In Good to Great, Jim Collins alludes to the fact that we will never know the greatest company in America because it may be some $10-million business in Middle America that doesn’t want to be known. You have to ask yourself this: Would you rather have a $10-million company with a 20 percent profit or a $100-million company with a 2 percent profit? It’s the same net profit, with considerably more work at a higher complexity. The answer should be a no-brainer.

  Don’t get me wrong, though. There are great $100-million companies, even great $100-billion companies, but they’re the exception, not the rule. Unless you have a really good reason to go to $100 million, why not become the best $10-million company there is?

  * * *

  After hitting their next ceiling at around $19 million and 70 people, Tyler Smith and his partner shocked their community (me included) by deciding to shut down Niche Retail.

  In a very real, open, and honest interview with Tyler, I learned that the number one reason for his decision is that he felt he was no longer living in his Unique Ability. He felt the company had outgrown what he and his partner had wanted. They had ridden a wave of ego, hype, and excitement for nine years, and it had been a heck of a ride. “We were like rock stars at trade shows. It was intoxicating,” Tyler says. “We got addicted to the money and the size.” As he looks back, he remembers that Niche was supposed to be a lifestyle company but had grown too fast and they couldn’t get out of their own way.

  Tyler loves technology, computers, and the Internet. He found himself with 70 people at the helm of the company, in an industry he didn’t like and in a role he didn’t like. “I realized I no longer wanted to be an integrator,” he says. He felt unfulfilled and bored. “To worsen matters, our industry was under attack by competitors like Wal-Mart, Amazon, and overfunded new companies. We also got hit with a recession; it was a triple whammy. I don’t know what we would have done without the EOS tools on this ride. They’re what held everything together.”

  Now, one year later, Tyler and his partner have started a new company that he feels puts them 100 percent in their Unique Abilites. Their company is called NicheNext and partners with companies to optimize their web sales. “I don’t ever want to manage another employee,” Tyler says. “I’m happier and more energized, and I’ll make more money.”

  The message is that building a great organization isn’t for everyone. Being an integrator isn’t for everyone. You have to know what you want.

  * * *

  In his book Small Giants: Companies That Choose to Be Great Instead of Big, Bo Burlingham illustrates the value of staying small. He shares countless real-world stories of companies that chose to stay small and private. These companies shunned the chance to go public or receive unlimited amounts of money to invest in growth in order to protect and preserve what they’d built. They define themselves by their passion for their products and their commitment to their employees, customers, and community—by embracing a clarity and loyalty to their purpose.

  COMPARTMENTALIZING

  With EOS implemented, everything has its place. In other words, every issue, priority, action, or idea that is longer term than 90 days is listed on your V/TO Issues List. Anything that must be accomplished this year becomes a goal. If it needs to get done this quarter and will take weeks or months to accomplish, it becomes a Rock. Any issues that arise during the quarter and must be solved now go onto your weekly Level 10 leadership meeting Issues List. Issues that are departmental in nature get pushed down to the appropriate departmental meeting Issues List, and any that are one- to two-week action items go on the To-Do List in your Level 10 Meetings, creating a simple system for managing all goals, Rocks, issues, and to-dos.

  SAME-PAGE MEETINGS

  When you have a partnership, it’s crucial for the greater good of the company, its culture, and people that the leadership is 100 percent on the same page. This also applies to all visionary/integrator relationships, even if they are not partnerships. When you’re not in sync, your people will know it. As with parenting, the kids know when their parents are not getting along, as much as they try to hide it. The same goes with partners in business. In these situations, I prescribe a same-page meeting. Every month, you meet for a few hours and reconnect the circles. You need to solve all of your issues, share anything that is angering you, and express any concerns. These meetings are not always peaceful, but you will clear the air and resolve issues. The objective of the meeting is to communicate your thoughts, listen to the other’s concerns, and solve all issues before bringing them into the business. You must also maintain a united front in front of all employees.

  Take the example of Todd Sachse and his partner, Rich Broder. Early on in their process, I prescribed the same-page meeting for them, and they loved it. They have been holding same-page meetings every month for almost four years now, and their company has experienced explosive growth.

  If you can’t get on the same page, you might want to consider counseling or coaching. This practice is not uncommon, and mediation can be very effective. If you’ve tried everything and feel there is no hope, it may be time to part ways, although this is very rare. Generally, with counseling, you can get back on the same page, and the relationship will become better then ever.

  I’ve had several clients end their partnerships after clarity of vision and accountability and discipline were put in place. Some partners just can’t handle what it takes to build a strong company. If you’re determined to go to the next level, some won’t be ready for the change involved. Such a situation occurred with a new client when the decision to part ways occurred prior to completing three sessions. In the first
session, it was apparent that the partnership no longer worked. The partners, who we’ll call Jim and Tim, wanted two totally different environments. Jim wanted to keep the status quo, and Tim wanted to leave its chaos behind and build a solid company. In their second session, the vision was clarified solely by Tim, because Jim wanted nothing to do with it. Jim didn’t even show up for the third. They had sat down after the second session and agreed to part ways.

  The partners of a different company realized their diverging viewpoints in the first session, struggled through the second session, and cancelled the third session. They consulted their financial people and split up their assets into two separate companies. They now run their own companies as sole proprietors.

  Even more complicated was a new potential client in which the partners were also brothers. When I entered the conference room for the initial meeting, I found only one brother waiting for me. He explained that after the meeting I would have to meet with the other brother down the hall and go through the exact same presentation. They wouldn’t even sit in the same room together. So I did both meetings, more out of curiosity than anything else. As you can imagine, we never moved forward and any advice fell on deaf ears.

  Fortunately, these painful partner situations occur only about 5 percent of the time. If you’re faced with one, follow the same-page meeting process. If there is no hope, the answer is clear. Think about the long-term view, and you will see that by separating you will be better off in the long run.

  TAKE A CLARITY BREAK

  Keeping your head clear, your confidence high, and your focus strong are vital in maintaining forward momentum. Most leaders spend most of their time overwhelmed, tired, and buried in the day-to-day routine, unable to see beyond tomorrow. As a result, they don’t solve problems as well as they could, they don’t lead their people as well as they could, and they’re not a good example for them.