What the heck is EOS?
Nikita Kazakov
Nikita Kazakov
11 min read

Bottom Line — 7/10 — Read it if your organization is using EOS or if you’re building an organization. Otherwise you can skip it.

The company I’m working with started to use EOS (Entrepreneurial operating system) to manage vision, priorities and making sure everyone is clear about what the company is aiming to achieve.

I wouldn’t read it if my company wasn’t using EOS.

To it’s credit — The book is short at under 200 pages and is an easy read. It’s explains the EOS model well.

EOS Model consists of 6 elements.

EOS Model consists of 6 elements.

Takeaway

The book talks about the lack of organizational direction. I’ve experienced this before where I’ve built applications as a product manager and then the application was scrapped because not everyone was on board. Getting everyone’s buy-in is critical!

With a common direction, you avoid having your boss tell you one thing and a higher up asking you to do something else.

The book talks about the importance of actually living your core values. Most companies have core values but most of the time they are cute platitudes.

When a company actually reiterates core values on a weekly basis and tries to live them, that’s where magic happens. Let’s say you have a core value of truth, and you require your employees to tell what they did on each hour of the day, you’re not living that core value.

Don’t attempt to be EVERYTHING. If your core business is selling coffee, don’t create bakery so that you can sell croissants. Get them elsewhere. Focus on your core.

You can’t predict 10 years. You can’t really predict 5 years either. However, at least try to estimate how you’d like to look like 1 year from now.

Get your big goals (ROCKS) in place and list them for the next 90 days. Every 90 days, assess what you finished and add more rocks. This is critical or otherwise pebbles and sand will fill up your entire time.

Your organization should have a living organization chart. It should be easily editable because hierarchies change. However, hierarchy should be transparent. Many company don’t have this and workers have no idea how the company functions. You’ll less likely to give a damn if the company organization is a black box.

This book has gold nuggets on meetings. Most meetings are useless. The EOS structure is solid for meetings. Have a timer, discuss what you’ve been working on, and spend time bringing up ISSUES with a resolution.

The idea of quarterly conversations is also gold. I’ve worked at places where there wasn’t a system for reviews. It sucked because we’re humans, we want praise from time to time and we like to know how we could do better as well.

EOS suggests quarterly conversations, that are informal one on one chats with managers about how things are going. They aren’t full performance reviews. But if you have informal chats, then full performance reviews won’t be a surprise.

Selected Book Notes

A team of average people running their company on one operating system will out perform a team of high achievers each doing it their own way, every day of the week.

EOS is specifically designed for a 10 to 250 person entrepreneurial company that is open-minded and growth-oriented.

Have you ever been given direction from your manager only to be told something different by a leader from another department? If you answered yes, you’re not alone. It is caused by a lack of alignment within an organization.

Did you get the memo? (Film: Office Space)

Imagine all the people in your company as arrows. When people have different objectives, the arrows all point in different directions.

So, how does your organization solve issues? You might have just thought that they don’t. If so, you’re not alone. Many companies discuss issues . . . and discuss them . . . and then discuss them some more . . . but never solve them.

The 2 EOS tools used to strengthen the Traction Component are Rocks and the weekly Level 10 Meetings.

The EOS tool that helps your leadership team define, document, agree on, and share the company Vision is called the Vision/Traction Organizer or “V/TO.”

A famous business guru, Peter Drucker, is attributed with the saying, “Culture eats strategy for breakfast.” For a company to be great, it must first know who it is. Then focus on strategy.

What are your core values? List them out. (Don’t bullshit them as many of the companies out there do.)

What is your core focus? Where as Core Values define who you are as an organization, Core Focus defines what you are.

“Before EOS, we attempted to be everything to everyone, from paint for office furniture to paint for plastic toys in McDonald’s Happy Meals. Honestly, if it was a cur-rent customer who had a nonautomotive job or a really shiny opportunity, we tried it. After EOS, we were able to get to one Core Focus — automotive interior coatings for plastic. Shiny stuff is now just not even considered.”

Many companies waste thousands of dollars trying to be everything to everyone. They waste money with inconsistent marketing messages.

What is your 10 year target?

The 10-Year Target is your long-term, larger-than-life goal. It unites everyone around one common objective. Imagine a sailboat without a rudder. It just goes wherever the wind blows it.

What are your 3 Uniques? The 3 Uniques describe the 3 things that make you better than the competition and why your customers buy from your company.

What is your 3 year target?

The 3-Year Picture creates a vivid image of exactly what your company will look like, feel like, and be like in 3 years. Unfortunately, a lot of managers don’t share their picture of the future with employees. Why not? Most of the time, they don’t know it themselves — or at least haven’t written it down.

What is your 1 year target?

Pick out only 3 to 7 goals for your 1 year target. Why only 3 to 7 goals? Because fewer is better and less is more. When companies try to get too many things done, they lose focus and, as a result, accomplish very few of them.

Once your 1-Year Plan is clear, you’ll know exactly what you need to accomplish over the next 12 months to put you on a path to reach your 3-Year Picture and ultimately achieve your 10-Year Target.

What are your Rocks?

Rocks are the 3 to 7 most important objectives the company must get done in the next 90 days in order to achieve your 1-Year Plan.

Why 90 days? In most cases, companies start the year with good intentions, but then life gets in the way. People start getting distracted by competitors’ actions, unplanned emergencies, and day-to-day distractions.

Another benefit of Rocks is that they create a 90-Day World for your organization that addresses an important aspect of human nature — human beings tend to lose focus, get off track, and fray about 90 days into any project.

All organizations have issues. The problem is that, in many companies, no one admits them, or when they do, everyone just talks about them but does nothing.

Accountability Charts

Picture an organization with 35 people where roles and responsibilities are unclear. No one is quite sure who is accountable for what.

Why? Because no one knows who’s responsible for what, and no one is held accountable for any-thing. One person described their company in this state: “There were too many cooks in the kitchen.”

As an example, you miss a customer deadline, and everyone starts pointing fingers, because there were so many people involved in hitting the deadline. If everyone is accountable, then no one is.

If you haven’t seen your company’s Accountability Chart yet, your leadership team should be sharing it with you soon.

Before EOS, there was a lot of ‘go talk to this person’ or confusion about who to talk to. After EOS, everyone now knows who to talk to about problems they may have instead of going to several different people and wasting time. Communica-tion flows openly between departments.

We talked about company rocks but now it’s time to talk about your rocks— the most important things that you must get done in the next 90 days.

The term “Rocks” comes from a simple science experiment made popular by Dr. Stephen R. Covey in his book First Things First.

The jar represents all the time you have in a day. The rocks represent the most important things you must get done, the pebbles represent your day-to-day responsibilities, and the sand represents all the interruptions during the day. The point is, if you don’t prioritize your Rocks — and work on the most important things first — you will not get them done.

Each individual employee should have 1–3 Rocks every 90 days.

Another thing about Rocks is that they need to be SMART.

  • Specific (simple, sensible, significant).
  • Measurable (meaningful, motivating).
  • Achievable (agreed, attainable).
  • Relevant (reasonable, realistic and resourced, results-based).
  • Time bound (time-based, time limited, time/cost limited, timely, time-sensitive).

While Rocks are set every 90 days, you will check in with the team during your weekly meetings.

On the subject of measuring, you should also realize that the minimum standard for a team’s Rock completion is 80%. Expecting 100% Rock completion is perfectionist thinking and dangerous. Why? Perfectionist thinking can lead to teams feeling defeated or being chastised by perfectionist leaders.

On Meetings:

You’ve been in them. Meetings that go on and on . . . people talking just so they can hear their own voice.

It’s what you do in meetings that’s a waste of time. If all you do is talk endlessly without solving issues, then yes, you’re wasting your time.

The line in the picture below represents the activity to get that stuff done. People delay acting until the last minute.

People tend to procrastinate

People tend to get stuff done at the last second. Parkinson’s law so to speak. That’s why we have multiple weekly meetings so we could spike that productivity.

We recommend a weekly meeting pulse. That way you get a spike of activity 52 times per year.

There are four things to solve during meetings: Making sure everything is on track, keeping people connected, hold each other accountable, and solve issues.

These meetings are called Level 10 Meetings or “L10” for short. They are rated at the end. If the rating is less than a 10, you have to give a reason.

During this meeting, you will be creating an Issues List. This is the place where you put all the unresolved issues.

The meeting must always take place on the same day and at the same time each week. It also must start and end on time.

Measurables are either on track or off track — you either hit the goal for the week or you didn’t. If a Measurable is off track or if anyone on the team has a question, it gets dropped down to the Issues List. Don’t discuss anything in detail until you get to the actual issues.

Let’s say you have a question about a team member’s Rock. He says it is on track, but you don’t agree or perhaps are a little uncertain. You say “Drop it down to the issues list” and that’s it.

To-Dos are typically 7-day action items. The goal is that your team collectively completes 90% of them each week before your next L10.

IDS (Identify, Discuss, Solve). Here, you are going to spend 60 minutes solving issues.

Our objective is to solve the most important issues well, not to solve all the issues on your list. The goal is to solve them once and for all — so they never come back.

Beware of the tangents that exist in most unproductive meetings. Speak out if a tangent does happen. Ask “Hey, are we going on a tangent here?”

Imagine —  You’re not sure if you’re winning or losing, and the frustrated coach tells you, “Just play harder.”

That is how a lot of companies operate. No one knows what the targets are or how they are doing in terms of achieving those targets — they don’t know if they are winning or losing. They are just working hard.

A Scorecard contains a handful of numbers that tell you how your company or department is doing.

Great organizations are built by having the Right People in the Right Seats — 100% across the organization.

Imagine being able to sit down with your manager every 90 days and have a real, open, and honest discussion about how you are doing — about what’s working and what’s not. Most employees we’ve talked with would love more feedback and opportunities to discuss how they’re doing with their manager.

The Quarterly Conversation is just that, a con-versation. It is not a formal performance review.

The Quarterly Conversation is an informal, face-to-face, one-on-one meeting for you both to talk about what’s working and what’s not. It takes about 60 minutes.

Don’t forget to mention

  • What makes my job more difficult?
  • What processes and procedures are broken?
  • Have I identified the root cause of any issues I’m having?
  • What could I have done differently in the last quarter? (careful with this one…)