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  YOU CAN ONLY RUN YOUR BUSINESS ON ONE OPERATING SYSTEM

  You must have one abiding vision, one voice, one culture, and one operating system. This includes a uniform approach to how you meet, how you set priorities, how you plan and set your vision, the terminology you use, and the way you communicate with employees. EOS is an operating system that puts everybody on the same page. Just as a computer program is made up of components that organize activity and various data into a system that enables its users to be more productive, EOS does the same for a business.

  If you assessed a handful of talented entrepreneurs, CEOs, sales managers, marketing directors, operations people, and finance people on leadership teams solely as individuals, you’d probably bet on their company being a success. But even talented leaders can’t be effective without first settling on a single operating system for their company.

  Often two talented people can speak two completely different languages:

  “What are your objectives?” “You mean my goals?”

  “What is the process?” “You mean the procedure?”

  “No, that’s a system.”

  “I prefer to set monthly objectives.” “We’ve always set them weekly, and we call them action items.”

  Imagine coaching a sports team with two distinct methods or running a country with two governments. When systems work at cross purposes, your company is the ultimate loser. You cannot build a great organization on multiple operating systems—you must choose one. This book is offering you EOS.

  YOU MUST BE OPEN-MINDED, GROWTH-ORIENTED, AND VULNERABLE

  The late Dr. David Viscott, author of Risking, wrote, “If you cannot risk, you cannot grow. If you cannot grow, you cannot become your best. If you cannot become your best, you cannot be happy. If you cannot be happy, what else matters?”

  Similarly, in your business environment, you have to be willing to be open to new and different ideas. If you don’t know something, you have to admit that you don’t know. You have to be willing to ask for and receive help. Most of all, you have to know your strengths and weaknesses and let other people who are more skilled than you in a certain area take charge.

  Hard experience taught me the value of this belief. After one particularly unsuccessful engagement, I reflected back on why The EOS Process did not work. It came down to a simple truth: The members of the leadership team weren’t growth-oriented, either internally or externally, nor were they willing to be vulnerable or open-minded. We accomplished very little because it was a constant battle to make decisions and discuss difficult issues. As a result, we both ended up dissatisfied. I now look for these warning signs in initial interviews with potential new clients. In many cases, I’m forced to help clients understand why they are not ready for The EOS Process.

  You cannot embark on this journey if you’re not willing to be vulnerable. You have to let your guard down to see your organization for what it is. Eliminate the facade with your leadership team, and invite openness and honesty. The leader who feels he has to have all of the answers and can never be wrong is completely missing the point. Being open-minded means being open to new ideas and being ready to change for the better. When your arms are folded, the wall is up and there is no getting in. The mind is like a parachute—it has to be open to work.

  You must also be growth-oriented to take this journey. I have met many people who say they want to grow, only to discover after further questioning that they are petrified by the challenge and turbulence that growth creates. They are content at the size they are, and there are many good arguments in favor of contentment. EOS, however, is a system designed to help you grow.

  In summary, the four fundamental beliefs are as follows:

  1. You must build and maintain a true leadership team.

  2. Hitting the ceiling is inevitable.

  3. You can only run your business on one operating system.

  4. You must be open-minded, growth-oriented, and vulnerable.

  If you accept these beliefs, you’re ready to let go of the vine. Now it’s time to learn the tools that will help you rise to the next level and build a stronger organization. Over the course of the next six chapters, you will learn how to strengthen the Six Key Components of your organization. As you progress, you’ll better understand the EOS structure, as well as why each component is reliant on the next. With that in mind, let’s start where all traction starts: your vision.

  CHAPTER 3

  THE

  VISION COMPONENT

  DO THEY SEE WHAT YOU ARE SAYING?

  A few years ago, my dad made a humorous observation: People have a habit of firming up their convictions in conversation by asking the question, “Do you see what I’m saying?” On the surface, a question like that doesn’t really make any sense—you really can’t see what someone is saying. Later it dawned on me that the expression made all the sense in the world.

  My dad is a visionary. He was my first mentor, and he taught me how to lead, manage, communicate, and deal with people, whether it be one or one thousand. He is one of only 140 Hall of Fame members of the National Speakers Association. He also built the number one real estate sales training company from the ground up and is a two-time finalist for the Ernst & Young Entrepreneur of the Year award.

  As he well knows, most entrepreneurs can clearly see their vision. Their problem is that they make the mistake of thinking that everyone else in the organization sees it too. In most cases, they don’t, and as a result, leaders end up frustrated, staff ends up confused, and great visions are left unrealized.

  The process of gaining traction starts here. Clarify your vision and you will make better decisions about people, processes, finances, strategies, and customers.

  Entrepreneurs must get their vision out of their heads and down onto paper. From there, they must share it with their organization so that everyone can see where the company is going and determine if they want to go there with you. By getting everyone on the same page, you will find that problems get solved more quickly. In The Five Dysfunctions of a Team, Patrick Lencioni credits a friend who built an organization from a start-up to a billion dollars in revenue with the following observation: “If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.”

  A technology company that recently began The EOS Process came to me after hitting the ceiling for two straight years. The biggest problem was that the leadership team couldn’t put its finger on why. There ended up being many reasons, but the key factor was that the company had no central vision. It was providing three very different services to the market, and because people had to change hats up to several times an hour to cater to different clients, the internal operations were needlessly complex.

  With EOS, the company made the decision to focus in one direction. In two sessions, the leadership team clearly defined their vision of who they really were, what they really wanted to do, and where they really wanted to go. In a very short time, they simplified the organization and freed up resources by shedding two of its services. This allowed people to focus and excel in one area with one type of client. Now the company has clear goals and a laser-focused marketing strategy. Not surprisingly, it’s once again beginning to grow. As a result of these decisions, it recently had its best first quarter ever, generating a 125 percent increase in revenue over the previous year’s first quarter.

  The first step is letting go because the vision you’re about to clarify can’t be about you. It has to define something bigger. You need to create a vision that points the way to a greater good. The sooner you do that, the sooner you will make better decisions that build an enduring company. To learn how to create a strong vision, you must first answer eight important questions.

  ANSWERING THE EIGHT QUESTIONS

  Let’s start by dispelling the myth that a company’s vision has to be a hundred pages long. You might need that level of detail for financing, but rar
ely is it necessary to build a great company. By simply answering eight questions, you and your leadership team should be able to clearly state your vision and ultimately enable everyone in the organization to “see” where you want to go.

  The first tool in EOS is the Vision/Traction Organizer (V/TO). Not only is the V/TO designed to get your vision out of your head and onto paper, it will help you answer these eight questions. It’s meant to help you create a clear picture of where the company is going and how it will get there. Most importantly, it does so simply, by boiling your vision down to only two pages. An example of a V/TO appears on the next page, and an electronic version of the V/TO can be downloaded free at www.eosworldwide.com/vto.

  I first learned the power of simplicity in planning from my previous business partner, Ed Escobar. Along with my dad, Ed and I used to co-own and run a real estate sales training company. Once, Ed told me about the time prior to my joining the organization, when he had presented a quite lengthy business plan to my dad. After the first look, my dad said, “Can you condense it to 10 pages?” A little frustrated, Ed replied, “Sure.” After some work he came back with a 10-page business plan. My dad liked it, but wondered aloud, “Could you condense it to two?” A little more perturbed, Ed complied once again. After some more work, the two-page business plan was created. When my dad’s request to condense it to one page proved impossible, the idea of a two-page business plan was born. That simplistic business plan was the catalyst for the creation of the #1 real estate sales training company in North America. This led Ed to create a simplified business planning tool known as the Life Business Management Plan. It was the first tool I ever used for business planning.

  That notion was eventually helped along by Verne Harnish. Author of Mastering the Rockefeller Habits, highly sought-after growth guru, founder of the Young Entrepreneurs’ Organization (now the Entrepreneurs’ Organization), and a regular contributor to Fortune Small Business, Harnish introduced me to his One-Page Strategic Plan, an additional inspiration for the V/TO.

  In his book The One Page Business Plan, Jim Horan also deflates several popular myths, two of which are that “business plans must be long to be good” and that they take “six months, a significant amount of the owner’s and key staff members’ time, and expensive consultants” to create. As Horan understood, neither of these things is true. The simplified approach to strategic planning is generally the best approach.

  What is vision? It’s clearly defining who and what your organization is, where it’s going and how it’s going to get there. It should be simple to articulate your vision, because it’s probably already in your head. Unfortunately, if there are five people on your leadership team, there may be five different variations of the company vision. The goal is to get you all on the same page. To the degree everyone on the team can answer the following eight questions and absolutely agree, you will have a clear vision.

  By answering the following eight questions and filling out the V/TO, we will clarify exactly what your vision is. Let’s get started. The eight questions are as follows:

  1. What are your core values?

  2. What is your core focus?

  3. What is your 10-year target?

  4. What is your marketing strategy?

  5. What is your three-year picture?

  6. What is your one-year plan?

  7. What are your quarterly Rocks?

  8. What are your issues?

  Please note that it’s recommended that you try to answer all eight questions in a full one-or two-day off-site session.

  WHAT ARE YOUR CORE VALUES?

  What are core values? They are a small set of vital and timeless guiding principles for your company. A good rule of thumb is to limit them to somewhere between three and seven. As always, less is more. These core values define your culture and who you truly are as people. When they are clear, you’ll find they attract like-minded people to your organization. You will also find that when they are applied in your organization, they will weed out the people that don’t fit. Once they’re defined, you must hire, fire, review, reward, and recognize people based on these core values. This is how to build a thriving culture around them.

  Unfortunately, most organizations have not defined their core values, and the resultant lack of clarity hinders their growth. When your people don’t embrace your core values, their actions hurt your cause more than help it. By not defining what your values are, you have no way of knowing who believes in them and who doesn’t.

  When Image One started The EOS Process, the leadership team learned early on that we would be spending a few hours determining Image One’s core values. Company co-owner Rob Dube argued that they must solve issues first. “We prepared a list of issues, and there are a ton,” he said. “We should do this core-value thing after we solve those.” In reply, I asked him to take a leap of faith and told him that if he didn’t like the way our core-value search was going after an hour, we could move on to the list of issues. After the process was over, Rob changed his tune. “I didn’t just like the way it was going, I loved it,” he recalls. “I’ve been sold ever since. I tell that story to all new Image One team members and when I speak to groups about EOS. Defining core values changed our company, the way we do business, and the way we select our people.”

  Much has already been written on the power of identifying core values and instilling them in an organization. In the course of writing Built to Last, Jim Collins and Jerry I. Porras spent six years researching organizations that have endured through recessions and depressions for decades. One of their key findings was that in every case, these companies defined their core values in the very early stages and built a culture of people around them.

  Despite that, the perceived value of core values has diminished as of late. After all the hype in the 1990s, they are now frequently regarded as clichéd and tired. This, ironically, is what makes them more vital than ever. In this book, they are the first step to forming your vision.

  One important thing to understand is that core values already exist within your organization—they’ve just been lost in the day-to-day chaos. Your task is merely a matter of rediscovering what they are and instilling them as the rules you play by.

  The following is the exact process all EOS clients follow for discovering their core values. First, schedule time with your leadership team. I recommend a minimum of two hours, preferably away from the office, as strategic thinking is always best done off-premises. In that meeting, you proceed as follows:

  STEP 1

  Have each member list three people who, if you could clone them, would lead you to market domination. These three names should preferably come from inside the organization. Once each person has his or her three, post all of the names on a whiteboard for everyone to see.

  STEP 2

  Go over the names and list the characteristics that those people embody. What are the qualities they exemplify? What do they do that puts them on the list? Start with a long list so that you can see all the possibilities. To help your thought process, here is a list of real-world core values:

  • Unequivocal excellence

  • Continually strives for perfection

  • Wins

  • Does the right thing

  • Compassion

  • Honesty and integrity

  • Hungry for achievement

  • Is enthusiastic, energetic, tenacious, and competitive

  • Encourages individual ability and creativity

  • Maintains accountability

  • Services the customer above all else

  • Works hard

  • Is never satisfied

  • Is interested in continuous self-improvement

  • Helps first

  • Exhibits professionalism

  • Encourages individual initiative

  • Growth-oriented

  • Treats everyone with respect

  • Provides opportunity based on merit; no one is entitled to anything<
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  • Has creativity, dreams, and imagination

  • Has personal integrity

  • Isn’t cynical

  • Exhibits modesty and humility alongside confidence

  • Practices fanatical attention to consistency and detail

  • Is committed

  • Understands the value of reputation

  • Is fun

  • Is fair

  • Encourages teamwork

  STEP 3

  Your organization’s core values are somewhere in that long list you’ve just created. Now, narrow it down. In your first edit, circle which ones are truly important, draw a line through the ones that are not, and combine those that are similar. Remember, the rule of thumb is between three and seven; after the first round, you should have the list down to somewhere between five and 15.

  STEP 4

  Here is where you’re going to make some tough decisions. Through group discussion and debate, decide which values really belong and are truly core. Remember, your goal is to get your list down to between three and seven.

  Here are some examples of EOS clients’ real-world core values:

  McKinley

  • Can do

  • Gumby™

  • Service

  • Results

  • Adroit

  Schechter Wealth Strategies

  • Clients’ needs first—always

  • A complete “WOW” experience

  • A special place to be

  • Cutting-edge knowledge—we are the experts

  Zoup! Fresh Soup Company

  • Action-oriented

  • “Can Do” attitude

  • No jerks

  • Open and honest

  • Passion for the brand