From Complexity to Clarity: Mastering Core Processes with the 80-20 Rule

Almost everyone has heard of the 80-20 rule of business — 80% of all outcomes come from 20% of the inputs.?

Also known as the Pareto Principle, it’s very popular in business circles because it very often rings true for various aspects of running a business. For instance, 80% of your results are driven by only 20% of activities — these activities are your core processes.?

They are elusive, easy to understand, and hard to master but like everything else in EOS, there is a clear, linear way to do it.?

This is your practical guide to identifying, documenting, and implementing Core Processes.

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Consistency is the Secret

Sticking to strict, rigid regimes may feel unentrepreneurial and may even go against your instinct (thinking freely and dealing with problems as they come). But core processes aren’t just for you, they exist for your teammates in the organization.?

Core Processes represent the unique way your company operates (and consistency is critical!).

In their book “Process! How Discipline and Consistency Will Set You and Your Business Free” (which is an amazing read and definitely worth picking up), Lisa González and Mike Paton talk about the journey of identifying core processes through an easy-to-follow summary — dubbed “The? Process! Process”. And it starts with…

Committing to the Process Component

If you know the Entrepreneurial Operating System (EOS), you’ll know an initiative won’t work unless the entire leadership team is on board. This is why before you even begin working on the 3-Step Documenter, you need to sit down with company leadership and make sure everyone is 100% clear on your goals (assuming you are already 100% committed).

Self-implementers may face pushback from fellow leaders and it often revolves around the simplicity of the process component and doubting its effectiveness.

While there is a lot of depth in both of the tools used here, the underlying principle is simple. But doing the simple things consistently is the greatest challenge.?

This straightforward approach is like the rest of EOS — designed to cut through complexity, allowing businesses to focus on what truly matters, and ensuring that their core processes are efficient, scalable, and consistently followed by all.

Remember, easy to understand, difficult to master…?

"Many process improvement initiatives fail precisely because leaders fail to own, complete, or master the basics. They skip these simple steps altogether, or half-heartedly go through the motions rather than engaging fully in the work." Lisa González and Mike Paton, in their book Process!?

3-Step Process Documenter

The 3-Step Process Documenter is an official EOS tool that is an incredibly powerful and in-depth tool. It divides finding and finalizing core processes into three clear steps — each with its own timeframe, objectives, and sub-steps.?

1. Identify

Assuming you and your leadership team are 100% committed, we begin by identifying our core processes. Some will come to mind right away and be very apparent, others will take more time as you look back to your past experiences and knowledge.

But don’t try to think too hard. Remember, you don’t want too many processes and if it’s important, it’ll come to you automatically. Once you have a good list, start narrowing it down to 5-12 core processes that are the most crucial to your business’s operations.??

You also need to give each a unique name that is representative of what this process means to every leader. And finally, ensure all of the leaders agree to the process, its name, and what it stands for.

The entire exercise is meant to last about one hour but it can easily go over that.?

To recap, here are the things you’re doing in this first step:

1. Start with the desired outcomes (function-wise)
2. Identify all of the business processes that lead to those outcomes
3. Narrow down to the 5-12 most important
4. Give each process a name
5. Discuss (and repeat if needed)
6. Agree and finalize

And here’s a good template of the (rough) core processes you should have at the end of this step:

• The HR process
• The marketing process
• The sales process?
• The operations processes
• The accounting process?
• The customer-retention process?

These six activities cover almost every function of the business — your list needs to do the same (and may not look exactly like this).?

Of course, feel free to have more creative names.

2. Document (and Simplify)

Unlike the last step where you worked together, discussing, and sharing feedback, for this step, your leadership team will work individually

Each process will likely represent one function of the business — find the leaders responsible for those functions and assign them the relevant core process.

Choose a timeframe (generally 90 days or even the next quarterly meeting) and ensure everyone agrees to it.?

During this time, each leader will work together with teammates from their respective departments to qualify actions, quantify results, and clearly document the way of doing things.?

You’ll likely find your own way of documenting but here’s a simple summary of this phase that works for most:

1. Start by observing the day-to-day activities
2. Identify the consistent steps required to reach a specific outcome
3. Condense steps
4. Eliminate steps?
5. Add steps to address the odd bottleneck, mistake, or any other rare scenario
6. Review and approve (with the rest of the leadership team)

The goal is to make the documentation of your core processes as bulletproof as possible (without including redundant steps).

3. Package

Before you start the rollout, you need to “package” the processes for the greater organization.

Remember, these steps are part of the organization’s handbook and you must present them in a way that is easy to find, easy to understand, and easy to implement in daily operations.

“Some companies may want to do it graphically, others may want to do it in a Word document, others still with a video. There are different ways of approaching the process component and getting to the same place. But the core rules are the same. We're going in linear steps.” Phil Cooper, on the Confessions of an EOS Implementer podcast

For instance, here is our “Proven Placement Process” at Talent Harbor that outlines how we conduct a successful executive search — it’s simple, to the point, and covers everything anyone in or out of the operations team needs to know about how we do things.

This is just one of the ways you can do it. You should pick the format, medium, and platform that is the most practical for your people.?

Packaging is also when the name of the core process becomes important because that’s how every employee is going to remember it and refer to that specific set of steps.

FBA Checklist

The last thing you want after all of this effort is for this documentation to go unused and unnoticed. A smooth and effective rollout is critical to the success of this entire initiative.?

This is why we use a specific EOS tool called the FBA (Followed By All) Checklist. This checklist contains four steps that need to be checked off during rollout and again every so often in the future to address deviations.?

The following four action items will help your company adopt and incorporate this new way of thinking into their day to day functions:

1. Train

Every single employee needs to work towards the same goal, using roughly the same steps. The way you achieve this depends on your company and the people.?

For instance, you can make this part of your weekly Level 10 Meetings, have formal training sessions, or set a timeframe and let employees do it at their own pace (while allowing them to ask questions and seek assistance).

2. Measure

You need to decide which metrics to measure to track adoption progress and a clear way to measure them. Once again, there are multiple ways to do this.

• You can check for compliance, that is, ensuring all the steps are being carried out the correct way and in the correct order.
• You can check for frequency (or another quantitative metric), that is, ensuring the steps are done the right number of times.?
• And you can also check directly for outcomes, that is, ensuring the expected end result is always being achieved.

Once again, the way you measure is entirely dependent on your core processes and the steps within them. You don’t have to stick to these three options. Many companies simply use their Scorecards since Core Processes directly reflect and impact those measurables as well.?

“Measuring core processes makes our scorecard better because we know what we're supposed to do. It tells us the activities that we're supposed to do. All of a sudden, the really important activities bubble up. So our scorecard gets better.” Phil Cooper , on the Confessions of an EOS Implementer podcast?

3. Manage

This is where the leaders come back into the equation and play an active role in helping their subordinates adopt this new, organization-wide way of working.

If you’ve already completed your Accountability Chart, you may be aware of LMA (Leading, Managing, and holding people Accountability). LMA will be the tool of choice for leaders who have employees directly reporting to them.

Lead by example and ensure all leaders follow core processes just as they expect others to do. They also need to address any concerns, take feedback, and provide all of the necessary information, resources, and tools to meet the standards you’ve now set.

And finally, hold employees accountable. Leaders need to make their expectations clear and have an open conversation about what they can do to make this transition easier. In the end, some people may have to be let go.

4. Update

Your work environment constantly changes (even if very slightly) from external pressures and over time, these small changes can add up to make one or two steps obsolete. In some extreme cases, entire core processes may have to be reworked (for instance, during the lockdowns).

Your way of working needs to constantly improve, through automation, new productivity tools, finding and removing inefficiencies — the list goes on. So have a look at the Core Processes to update them at least once a year.

Ensuring everyone follows the prescribed “way of working” is also important because it makes diagnosing problems much easier.

If a department or an individual is failing to meet their measurables consistently, then you have a clear and verified frame of reference (the core process) to judge them against — and see which steps aren’t done or aren’t done incorrectly. It helps take subjectivity and personal biases out of the equation and ensure there’s consistency in the organization.

And finally, if you haven’t read it already, I recommend checking out my post on Core Values where I talk about some of the practical ways of making Core Values part of your organization — there are also some great insights by Andrea Jones and much of that is applicable here as well.

“I think it's the most powerful component that we have, sometimes the most underutilized component because everybody thinks they've done it, but they really haven't.” Phil Cooper , on the Confessions of an EOS Implementer podcast

Avoiding Process Pitfalls?

The following five mistakes really are pitfalls because they are difficult to recognize and easy to fall into.?

1. It’s not the “same old boring stuff”

Stop thinking of processes as the “same old boring stuff” and instead start to think of them as the “successful stuff”.?

Going back to the 80-20 rule, the process component distills activities that deliver results — the ‘things’ that have historically worked for the organization and ensures they can be replicated again in the future.

2. Do you already know your Core Processes?

Think again. Core Processes can be deceptively simple. A bit of wishful thinking here and a bit of recency bias there and you’ll find yourself working on the wrong processes.

3. Don’t reinvent Core Processes (but do refine)

Maybe you do already know your core processes. A lot of the time, your core processes are simply things founders, leaders and teammates have been doing for years.?

The mistake is using these things as is and without going through the right steps, that is, documenting, simplifying, and systemizing them for the rest of the organization (not just yourself).?

"The actions that create consistently exceptional results are not at all obvious to most people in a growing business. Letting employees figure it out for themselves is inefficient and costly." Lisa González and Mike Paton, in their book Process!?

4. Flexibility and Quantity?

Another mistake that’s easy to make is having core processes that are too rigid or too flexible.?

Too rigid and you can stifle creativity, limit adaptability, and restrict operations, making it difficult for your team to respond to changes or unique situations. Too flexible and you’ll have inconsistency, errors, and a lack of accountability, as there's no clear guideline to follow.?

This also extends to the number of core processes. It’s easy to identify a lot of unique practices that deliver results — you cannot have all of them be core processes. Try to condense and group similar activities together (you can still specify them as subpoints during documentation).

Try not to avoid above 12 and ideally target 7 core processes in total.

5. Core processes are not SOPs

Standard operating procedures (SOPs) are formal, step-by-step written guidelines that lay out how employees are supposed to conduct different activities.?

In theory, they sound very similar to our core processes but they’re very different concepts. SOPs are incredibly precise and detailed instructions with various contingencies, meant to cover a variety of workflows.?

Core processes, on the other hand, are about the way of doing business. They are high-level guidelines that cover how to think instead of what to think (or what to do). Core processes are the most efficient when they are linear, repeatable, and simplified.?

“We thought SOPs were processes. That's not what processes are in the EOS world. Process in EOS is different than process—it’s rinse and repeat way, it's linear, and it's not a flow chart.” Phil Cooper , on the Confessions of an EOS Implementer podcast

It’s the cave paintings on your company walls…

The Process component is your way of ensuring your company has your information, expertise, and tools, so they can continue to grow and deliver results — even when you’re not there.

Phil Cooper ran a family-owned pest control company for 34 years. He ran the company on EOS and used the Process component as it was envisioned to create a business that could function without him at the helm all the time.?

Terminex saw the immense value of a business that ran on rails and asked Phil to name his price…?

“My team was running Cooper Pest, which is why they wanted us. They wanted more than our client list. They wanted our culture. They wanted my brother. They wanted the book that I wrote. They wanted what we brought. And they wanted the way we approached EOS.” Phil Cooper , on the Confessions of an EOS Implementer podcast

To hear more about Phil Cooper’s story, his multi-million dollar lesson, and his amazing insights into core processes, check out the Confessions of an EOS Implementer podcast .

P.S. Want to work together? Here are a few ways:

1/ Already running on EOS? I am putting together a small vetted group of business leaders who operate on EOS. Apply for the Spring Cohort here . (only open to Visionaries, Integrators and Core Function Leaders)

2/ Need an Integrator or Core Function Leader expertise without the FTE budget? Schedule a Zoom with me here to learn about Talent Harbor’s fractional and professional staffing for businesses operating on EOS.

3/ Are you an EOS Implementer and want to be a guest on our show? Submit a guest form here.

4/ Vetting Certified EOS Implementers and want to know who’s the perfect fit for you and your team? Send me a DM.