The Entrepreneurial Operating System (EOS) is a set of simple concepts and practical tools used by more than 142,000 companies around the world to clarify, simplify, and achieve their business vision. EOS focuses on the senior leadership team, and not just the founder. I sat down with Scott Morin, owner and lead consultant of Bytown Ventures to talk about how the EOS system can benefit your business.
Scott is a seasoned Ottawa local. He’s spent 25+ years in the tech sector, in sales. While not a founder, as a senior executive, Scott started implementing EOS, a system that's detailed in a book called “Traction: Get a grip on your Business” by Gino Wickman. It all began about four years ago, when Scott sat in on an EOS call with a client that he was advising. He found that the meeting had a strong execution component and structure and so began digging into the system a little bit, he says. He discovered that there was nobody here in Ottawa implementing this specific methodology and so began his journey.
The main pain point that EOS is focused on - frustration
One clear focus area within the EOS system is ensuring that the organization is not completely reliant on the founding entrepreneur for their business, their execution, and for their profit. This is what defines the multiples you’ll get when it's time to sell the organization. EOS focusses on entrepreneur frustration as a key pain point that needs to be solved. Often entrepreneurs are frustrated because they've hit a ceiling. Perhaps their revenues or profits are flat. Perhaps they are frustrated by the lack of control on their time or their talent. Maybe employees are not all running cohesively in the same direction. This frustration is key indicator within EOS.
The thinking began with Dr Larry Greiner
Scott talks us through of the origins of the EOS system. It comes from a book, as do most good things! “There was an article written back in the 70s where Dr Larry Greiner talked about ‘evolution versus revolution’. Organizations never grow in a straight line. Every single organization that Dr Greiner looked at when he did this study had an element of growth. And then the organization would hit a ceiling. They will literally stop growing from a revenue perspective, or an EBITA perspective. And what he found was that if they did not break through the ceiling, if they stayed flat, about 60 to 75% of those organizations, within a three to five year period, were either out of business or they were acquired for pennies on the dollar. Some of those organizations even evolve into lifestyle companies. (A lifestyle company is basically an organization that produces very stable profits for the founder, and they're very comfortable with that.)”
Fun and Frank advice from Scott Morin
“Just be vulnerable. Be vulnerable with your people. If you're vulnerable with them, they will be vulnerable with you. There's this element of trust based vulnerability that grows out of that. And if you have trust based vulnerability within your organization, you can actually have something that we call good conflict. You actually want conflict within an organization as long as it's professional. When I talk about conflict, I'm talking about two different opinions mashing together so that the best decision gets made for the organization, as opposed to people just acquiescing to the person that's higher up the chain, or is a little bit more forceful.”
If you enjoy the audio medium, you’ll find a lot more in the podcast episode here. Have a listen!
https://iamamillionairesonowwhat.libsyn.com/ep235-how-the-entrepreneurial-operating-system-works-with-scott-morin
This EOS mini series is sponsored by “Elevated Conversations” with me, Colleen O'Connell Campbell, a roundtable mastermind for co-founders and business owners who want a cash rich exit in the next five to 10 years.
If you’re in Ottawa, you may be interested to hear that I'm reintroducing “Elevated Conversations” which originated in 2018 where I brought together smart investors and business owners to talk about interesting topics in technology and finance that are disrupting our world. With COVID and the end of dinner parties, we moved to virtual roundtables and now I’m bringing back masterminds in person. Let me know via LinkedIn or email if you’re interested. The date is between the last week of October and the first week of November in 2022.