One HR Guy's Take on the Entrepreneurial Operating System EOS?

Setting Your Compass to True North

Operating systems are en vogue these days. One that has become incredibly popular for start-ups and small businesses, particularly in the private equity realm, is called the Entrepreneurial Operating System or EOS? for short. Gino Wickman created this model based on his learnings as a successful entrepreneur. Here's a quick read from a company called Whale that has had a lot of success with this system.

Entrepreneurial Operating System? (EOS?): What Is It? And why we used it to scale at Whale - Whale (usewhale.io)

There are now upwards of 200,000 companies operating on his model. I have worked in one such business. It gets your team focused on what they define as the 6 key components that make up any business. Here's the basic idea. Define a vision for where your business is going and make sure it's 100% understood by all, get the right people in the seats they belong in, know your numbers, resolve your issues collaboratively, define great SOPs which must be followed, and you will eventually achieve traction with a well-oiled machine.

One of my first tasks at this particular employer I worked for that had adopted EOS? was to read Gino's book Traction which sets the stage for his process. I really appreciated his ability to take a lot of complicated business principles and condense them down into simple and easy to follow parts. In the early stages of any company where you might be a team of 1 you have your hands in so many different things and are so focused on survival it can be hard to build a strategic roadmap that can help propel your business forward, let alone spend the time communicating that plan clearly to your team. EOS? forces the issue. There have now been many books written around this framework which help augment it and each component has countless templates to assist you with implementation. EOS? has grown an army of implementors for their product to help businesses master all the moving parts, and it can take years until your company is running on it effectively.

The backbone of the system is the Level 10, or L10, where you hold highly structured meetings each week of a fixed duration and check in on each 6 components. Executed poorly those meetings will be met with resistance and begin to feel like meetings for the sake of meetings, especially if your team hasn't mastered the art of resolving your issues effectively, you have bad data, or there is too much politicking. If you have a geographically dispersed workforce, are in acquisition mode and bringing a lot of new people into the fold, or both, teaching this system to your frontline or newer staff can be a beast. EOS? has built some software to help ease this burden to give greater visibility to these tentacles throughout your organization.

So, What About the People Aspect?

If you come from a traditional HR background the people tools can feel overly simplistic, restrictive, and take some getting used to at first. Traditional organizational charts go out the window and are replaced by an accountability chart. The need for job descriptions is minimized in favor of "seats" where you focus on the 5 primary roles or responsibilities for each rather than going deeper into the full scope of responsibilities and qualifications. This makes sense conceptually but gets murky from a talent acquisition standpoint when it comes time to go to market to fill a seat. The People Analyzer is used to look at the individual in each seat to determine whether they have the GWC for it - Do they Get it, Want it, and have the Capacity to do it. If not, you have a misfit which needs to be addressed. Back in the old days we framed this as do they have the "will" and "skill" to do the job. At the top of the accountability chart sits the visionary who sets the strategic direction for the business and is the idea person. The integrator helps bring this vision to life through being the executor and detail person, and all roads flow through the integrator with your leadership team.

For me personally, I felt somewhat handcuffed in my ability to bring more sophisticated talent processes to bear in this environment. If you are still a small organization that lacks an HR department, and you are newer to people management this system can prove quite useful. There is also a whole new vocabulary you need to master which takes time. One of my favorite components of their model any talent management professional can get behind is the goal setting. As a leadership team you establish your annual, 3-year, and 10-year goals for the business. You set quarterly company and departmental goals known as Rocks, with all key functions participating so stretching the business and updating progress become a natural part of your business rhythm.

Getting to the point of being EOS? pure is a no small task. It takes a ton of training for your people, and I am less familiar with success stories in very large and mature organizations who have moved past their earlier chapters and may have a matrix structure in place. Consensus building can be very challenging when you start getting bigger. If you do not have the right visionary and integrator, it all falls apart quickly. If you can't get commitment throughout the enterprise and if you do not have the communication infrastructure in place to connect with all employees, it can also lose steam fast. It requires stamina to be done properly, and if you are a classically trained human resources professional you have to be comfortable leaving a lot of your personal toolkit checked at the door.

Given some of these realities, I think a lot of organizations end up cherry picking what they like about the system and never get to 100% adoption. Figuring out how to marry some of your core and more complicated processes in an EOS? compliant way can be an undertaking. Finer points aside, the over-arching 6 components are an excellent guidepost to follow when starting and growing a business. You may have your own methods of achieving each, but setting your vision and hiring around your values, having the right team, knowing your numbers, surfacing and dealing with issues, and having tightly defined processes will always be a winning formula for scaling your business What has worked for you or your company under each component? If you have worked with EOS? what did or did not work well? Reach out through my website if you are interested in learning more about our approach to talent or subscribe to our newsletter.