Community, Coaches, and Implementers: Why I’m so excited about the Entrepreneurial Operating System (EOS)

I have made an extraordinary discovery and I am making a full pivot based on what I’ve learned. 

I have been an entrepreneur since college when my friend Steve Rowe and I started writing code together with thoughts of being the next Jobs & Wozniak or Gates & Allen. Since then I have owned or led over a dozen entrepreneurial companies. Some have been unqualified successes, many have done well, and a few have been just great (sometimes expensive) learning experiences. 

Everyone Hits the Ceiling

Between serving on entrepreneurial leadership teams, I have always ended up consulting for entrepreneurs – often starting new businesses from those efforts. I believe in entrepreneurship as a positive element of our society. I’ve seen how it can have a positive transformative impact on individuals and communities. But too often I see great ideas and great efforts hit the ceiling, damage the health of the company’s leaders, and take a toll on their families and relationships. 

As a consultant, I felt helpless to make a sufficient difference. I have read maybe 100 books on entrepreneurship, management, and business strategy and have taught all these topics to clients, peer groups and my MBA students. The problem with consulting is that you dig for answers and insights and then serve them back to the client, but then they just have another thing to read and try to contextualize. The problem most entrepreneurs have isn’t a lack of ideas or insights – it’s poor visibility, uneven execution, and fractured team dynamics. 

I have been passionately (perhaps obsessively) searching for a better way for a long time. The search is over.

A Simple and Complete Answer: EOS

My clients will recognize that I often say that when you really understand something, you can write the Haiku on it. 

As much as I love complex puzzles to solve, I have learned that the best answer most often proves to be the simplest, most direct answer because it is the one that is most likely to be understood, supported, and get done. Over the past two years, I have had the privilege to be able to talk to dozens of leaders who have embraced and benefited from the Entrepreneurial Operating System (EOS). Originally developed (though he says cobbled together) by Gino Wickman and popularized in his book Traction: Get A Grip On Your Business, EOS has now been implemented professionally in over 6,000 companies by the 255 Professional EOS Implementers. This is a process and a set of tools and disciplines that have been tested and refined to the point of being a diamond, the ultimate business Haiku.

The Traction Library is widely available, but let me know if I can send you a copy of one of the books.
The Traction Library

EOS-implemented companies tell us that they experience what we call Vision, Traction, Healthy. 

  • Vision meaning that everyone is on the same page with where your company is going and how you are going to get there
  • Traction refers to instilling discipline and accountability throughout the organization so that no matter where you go, you see people executing on that vision
  • Healthy meaning that you have a functional and cohesive leadership team and company that enjoy working together.

What entrepreneur doesn’t want that?

EOS Goes with Everything

I admit, I was originally skeptical. How could something so simple be so effective? Now, as a true believer, I can now give you 100 reasons why EOS, as a set of tools, as a system, and as a process of implementation, works with any organization, in any vertical, and at almost any stage of life. I offer you these eureka moments that converted me:

  • EOS focuses on the all the parts of the business that are not your special sauce, giving you more time and energy to focus on the thing that makes your company unique and valuable. 
  • The EOS tools and disciplines are simple enough that even your least sophisticated colleagues can participate, contribute and find their sweet spot through it.
  • All the pieces of EOS are offered for free as part of the “give first” mentality of the EOS community meaning that everyone can start learning it and implementing it without financial obligation
  • EOS is implemented through a process of spaced, contextualized learning that gives everyone in the organization the opportunity to mature and learn new skills they need them.
  • There is an extensive community of implementers and implemented companies that work together towards mastery and share best practice.

So, in some ways, I‘m up to my old tricks. My good friend Kris Snyder and I have started a firm and I’m working with entrepreneurs, but no more consulting and no more fractional executive gigs. As a Professional EOS Implementer, I have found my sweet spot using all my natural skills and things I love to do.

I urge you to consider informing yourself about EOS. The best and fastest way to do that is to schedule an informative meeting with one of those hundreds of professional implementers around the world. I’m happy to make an introduction. If you need a copy of Traction: Get A Grip On Your Business (eosworldwide.com/traction), let me know. 

For actual client testimonials – (http://www.eosworldwide.com/testimonials) or (http://www.eosworldwide.com/eosstory) to watch a short 4 minute video.

Ask questions. I would love to share my excitement with you! 

This post is also available on LinkedIn and Impact Architects

AMPT Radio Episode 8 – The Other Music Industry

The music industry has been run by the same forces since long before anyone uttered the words “Rock & Roll.” This issue looks at some people who are attempting to rebuild the business from within and without. They ask the question, “Do you have to sell 5 million copies to be successful?”
Articles Include:

  • Mark Arm of Mudhoney lets loose on publishing matters and trends
  • Seattle’s Sound Man spins some yarns
  • Hamish Todd spends some quality time with a little label called “Bands We Like”
  • Ani Difranco sings I Am Not A Pretty Girl
  • Have a Cigar by Pink Floyd with intro by Eben Eldridge

Some Free Resources for SaaS Valuation Algebra

TechCrunch: Determining the worth of your SaaS company

First, a warning.  Valuation is in the eyes of the payer.

But at some point, all entrepreneurs need to tell investors, their board, or maybe their recruits that will be getting equity what the valuation of the company is going to be.  The correct answer is, “I have no idea” but you will need to put something on your pitch deck, your prospectus, and your financials (don’t forget to do a Reverse Income Statement).

A few resources that I have found valuable:

  • The BVP Cloud Computing Index [ https://www.bvp.com/strategy/cloud-computing/index ] This is the prospectus page for an index fund that is a great collection of SaaS company stocks and their basic financials – great data for your business plan. The listing is also sortable (though is handles the text fields incorrectly – poor form, my friends – but you can also download the XLS.  The range in multiples should give you both pause and hope.
  • Determining the worth of your SaaS company by Todd Gardner for TechCrunch [ https://techcrunch.com/2016/10/07/determining-the-worth-of-your-saas-company/ ]  This includes the great visual below to help all your stakeholders understand the factors that contribute to valuation.

TechCrunch: Determining the worth of your SaaS company
https://techcrunch.com/2016/10/07/determining-the-worth-of-your-saas-company/

3 Reasons You Should Love the Reverse Income Statement (RIS)

Reverse Income Statement Template
Even if you get vision, culture, and brand right, success is still measured by the things you can capture in a spreadsheet. My favorite spreadsheet, though, are the ones that tie all those things together.
This past summer, the students in my MBA class took special note of my, perhaps, overwrought appreciation of the Reverse Income Statement (RIS) as a tool for developing strategy.  Admittedly, it is not sexy or flashy and will not offer any sort of output you can use in a Powerpoint.  It is a solid tool for rationalizing your assumptions and keeping track of all those “testable theories” that accumulate when you are business planning.
First, let’s accept that the RIS is like Pad Thai – there are endless variations on the basic premise.  I have a version that I rely on often enough that I have it as a template in 4 different apps: Excel, G-suite, Numbers and Calc.  I offer the Microsoft Excel version here:

Creative Commons License
The Official BizDevGuy Reverse Income Statement Template by Jim Haviland aka BizDevGuy is licensed under a Creative Commons Attribution 4.0 International License

My advocacy for this particular instrument is less important than reasons why I think it is so valuable for strategy development and business planning. I will offer details on using it below but first, the reasons I think business planners and strategists should love it as much as I do.

  1. Focus on the outcome: The very top of your RIS is your business goal and it is a number.  Yes, you need to know your WHY and have a mission and other organizing thoughts but you also have to be able to communicate to yourself and your stakeholders what success looks like in concrete, measurable ways that convey value.  It doesn’t have to be a currency figure but it has to be a number that you can use as the basis for the rest of your calculations. Even if you are guessing, you start with an outcome.
  2. Catalog your “testable theories”: The best and worst part of Entrepreneurs is their optimism.  Over time, optimism can turn reasonable assumptions into unimpeachable myths and false hopes unless they are informed by new insights or challenged by data.  I have noticed that business plan assumptions and press release logic can quickly become common knowledge unless you have tactics and disciplines in place to check them and keep exuberance in check.  In the RIS, everything you input to the calculations are listed as assumptions. On my version you also include sources and how frequently you should recalibrate.
  3. Know your numbers:  One of my favorite modern fictional characters is fake President Josiah Bartlett.  He had Mrs Linninham to ask “what’s Next?” but the rest of us need guidance, day by day, hour by hour, to determine what’s the next best thing for us to work on.  Business strategy can become complex math pretty quickly but we shouldn’t use that as an excuse not to know the numbers that best align with our predictions and the intended future. In my version of the RIS, you are asked to capture when and how you validate your assumptions and assign a member of the team to do the validating.  The more you share ownership of your numbers, the more everyone on the team can see, in very real terms, how their contribution in action or measurement impacts the overall outcome. The RIS wont relieve you of having the usual financial statements, but it is easier for everyone to look at a determine whether the effort is headed in the right direction.
The hardest part of working from a template like this is getting started.
In my template, I offer a sample of a RIS for a pizza restaurant.  It includes financial calculations as well as operational considerations.  For me, the operational metrics are the most important part of the power of this tool as it allows clear linkage between operations and the front office.  Many parts of an organization of any size can struggle to feel their connectivity to the financial performance of the organization.  
For smaller organizations, marketing offers an even bigger problem than operations.  Many of the business leaders I have worked with ask the age old “attribution” question: “How do I know my marketing dollars are growing the bottom line?”  The RIS doesn’t make the absolute causality of sales or profitability any easier to track but it does offer a pretty easy way to look for correlation, which is almost as good and sometimes better.
When I start a new RIS, I like to start small, capturing a few dozen assumptions and then using them a number of ways to calculate some things that will be easy to track like daily activities or outcomes.  In my example in the template, you should be able to get to the end of a day and, from the number of pizzas sold, decide on ordering for the next day and whether you are on track for the week or month.  After a week, you could add a new marketing campaign to the mix.  Your assumption would be number of emails sent or ads purchased.   The impact on sales could be seen even though you wouldn’t want to pretend that you know it is causal because lots of factors that you haven’t captured yet could be at play.  I like to keep adding Assumptions as time goes on and I realize what I am assuming and what can make a difference.
The really power of my version comes from using it to validate results and allow everyone to contribute to the numbers.  Weekly or monthly sessions reviewing the document will expose differences in opinions that can be very meaningful to catching problems before they grow to tragedies.
Over time, some of your assumptions will “lock in” and become pretty reliable facts – understandings that all your team can own and use to make decisions everyday, fully bought-in on their meaning and impact.
That level of alignment is something, I think, everyone can love.

Episode 14: Riot Grrrl Feminism

Riot Grrrl Feminism


This episode first aired in 1998.
Social change takes many generations. We attempt to define feminism as it was in the 60’s and 70’s and what it is in the 90’s and into the new millennium, notably third-wave feminism and the Riot Grrl movement.Gloria as tat
Gloria as RebelArticles Include:

the riot grrrl manifesto
the riot grrrl manifesto

 
 
 
The Music and Media List:

 

Episode 9: Who Owns Mexico?


Mexico and the U.S. are neighbors with very little in common culturally. Why does America reach over the border and cherry-pick what it wants to exploit. Why is the PRI so corrupt? Tell me about Zapatistas. What is different about racism towards Latinos?

Articles Include:

  • History of Mexico -Mayans, colonialism, Cinco de Mayo, NAFTA, PRI by Paula Friedrich
  • Interview: El Vez, the Mexican Elvis on the deconstruction of bias against Mexicans
  • Listen Closely #1: Reubén Blades Patrios
  • Listen Closely #2: Los Lobos Is This All There Is?
  • Rant: Coyote by Javier Cabasos

Episode 6: Anatomy of Radical

Anatomy of Radical


Synopsis: There are a few things that every successful era of change has in common. In this show we look at the two distinct personalities which must be present to bring the masses toward a beautiful new reality: The Radical and the Not-So-Radical. Martin Luther King was very effective because Malcolm X was there defining the outer limits. Gandhi worked well because Nehru was scarring everybody. Gay Rights has a future as long as there are ACT-UP and Stonewall. The right figured this out and used it very effectively in the 80’s and promoted the far right sections of the populace to make the near right seem centrist.
Articles Include:
Eben Eldridge rants on the need for radicals now and forever
Message to the Messengers by Gil Scott-Heron
London Calling by The Clash
History of Radical Behavior
The instigator walks the thin line between survival and radical behavior with two former ACT-UP volunteers.

Episode 12: Give Me Shelter


Shelter is as basic a need as there is. The desire for a place to call one’s own – reliable, familiar shelter, is deeply personal but is often thwarted by political and economic forces.  This episode of AMPT Radio considers the history of shelter, the work of Stone Gossard and the Red Feather organization in building homes for the native elderly, the solar-powered bus that shelters vagabond Lightning John Daily, living in a Rusty Cage and the occasional disregard for home it’s importance to one’s sense of self.

Mobility Interest by Google Searches

Google Angel Devil

No promises that Google is the true measure of our interests, but there certainly are lots of reasons to follow the aggregate search results. You ignore these trends at your own peril. Be sure to check assumptions regularly here : https://trends.google.com

For many Enterprise technologists, marketers, and product managers these trends can be disheartening because:

  1. It is nearly impossible to tease out the enterprise tech from the consumer tech
  2. The enterprise tech often struggles to differentiate with meaningful key words or phrases. Our love of acronyms makes it very challenging to follow of topic like MDM when it means both Mobile Device Management and Mid Day Meal.

Enterprise Mobility Key Words

The rise of Digital Transformation to Replace Mobile

As mobility is quickly becoming a foregone conclusion, digital transformation is taking its place. The reality is, you aren’t fully taking advantage of mobile until you focus on transforming your organization to a digital business.