0:00 Hello everyone, hope you all doing well. Today I am going to provide you a cultural book called traction. Hope you will like it. Don't forget to subscribe to my channel and let's get started. Introduction asterisk humor me for a moment and mentally detach yourself from your day-to-day details. Forget all your pre-existing beliefs about how to run your organization. Now imagine a bird's eye view of your business and look down on it from above. What do you see? You're reading this book because you want your organization to be solid and well-run. You've already achieved a certain degree of success and now you're ready for the next level. However, with this challenge comes a new set of obstacles. Sheer will and brute force are no longer enough to survive. The question you're facing now is a new one.
0:47 How can you elevate yourself to a position of true leadership? What if I told you that by reading this book and applying its core principles, you could eliminate all of your business related frustrations? That you could have great employees at all levels who share your vision, communicate with each other, solve their own problems, and demonstrate accountability. That your organization could not only run seamlessly, but also have the potential to scale up as large as you see fit. I am telling you that and you can. Believe it or not, you already have everything you need to make those changes. Put this system to work and you will accomplish all of the above. Just as businesses across many different industries have been doing for years, this book is not another silver bullet management book or flavor of the strategy. It contains no
1:35 theory. It's based on real world experience, practical wisdom, and timeless truths. More importantly, it works. Through hands-on experience, I have developed a practical but thorough method to help strengthen and re-energize your business. If you're like most entrepreneurs, you're probably experiencing one or more of five common frustrations. One, lack of control. You don't have enough control over your time, the market, or your company. Instead of controlling the business, the business is controlling you. Two people, you're frustrated with your employees, customers, vendors, or partners. They don't seem to listen, understand you, or follow through with their actions. You're not all on the same page. Three, profit. Simply put, there's not enough
2:21 of it. Four, the ceiling. Your growth has stopped. No matter what you do, you can't seem to break through and get to the next level. You feel overwhelmed and unsure of what to do next. Five, nothing's working. You've tried various strategies and quick fix remedies. None have worked for long and as a result your staff has become numb to new initiatives. You're spinning your wheels and you need traction to move again. Granted, a small minority of entrepreneurs and business owners do not suffer from these frustrations. They run their businesses using core disciplines that arrange the many moving parts of their organization into a welloiled machine. Some of these owners are naturals who don't even realize they're doing anything special. Most of us
3:08 though aren't so lucky. What I teach business leaders is simple but not simplistic. I help them melt away the five common frustrations by implementing the same basic tools that those successful organizations employ. As a result, business leaders come out feeling more in control, happier, and less stressed. Their organizations are more profitable, more focused, and staffed by great employees. You are not your business. Your business is an entity in and end of itself. Yes, you created it, but in order to find success, you have to turn it into a self- sustaining organism. Reaching the next level requires more than just a product or service or a simple determination to succeed. You need skills, tools, and a system to optimize
3:54 your people, processes, execution, management, and communication. You need strong guiding principles that will work for your company day in and day out. This book contains all the tools and components that make up the entrepreneurial operating system EOS. EOS is a holistic self-sustaining system that addresses the six aspects of your business. Master the individual elements of EOS and you'll be able to integrate them into a powerful framework that will help you gain traction and realize the vision you've always had for your company. This operating system didn't hit me like a lightning bolt. I've been refining it in the real world for over 20 years. It came through countless real world hands-on experiences, one lesson
4:39 at a time. My journey has been a quest to understand what makes great entrepreneurs and businesses so successful. Through turning around and then selling my own family's business, my involvement in the entrepreneurs organization, and learning from my many amazing mentors, I've been blessed with many experiences, challenges, and lessons. In the last 11 years alone, I've completed more than 1,300 full-day sessions with the leadership teams of over 120 entrepreneurial organizations. That adds up to over 10,000 hours of Hansen planning, teaching, coaching, facilitating, and solving leadership problems. EOS is the culmination of all that hard work. My typical client is an entrepreneurial small to midsize organization to million to $50 million
5:27 in revenue with 10 to 250 employees. Growth oriented, willing to change, and willing to be vulnerable as in being open-minded, willing to admit weaknesses, and willing to face reality. If that describes you, you're starting with everything you need. You will not have to master an endless stream of new techniques. Instead, you'll learn what successful organizations do to run a frustration-free business and gain renewed energy, focus, and excitement for your business. Join me on this journey to better control your business and bust through the ceiling to have better balance, better results, more fun, and more profitability. At this very moment, people who follow the EOS process are out there running very successful businesses. On average,
6:14 my clients businesses grow revenue by 18% per year. In addition, unlike many theoretical authors, I too am out there somewhere working with a leadership team hands-on and applying, testing, and proving these tools. I am an entrepreneur like you and have been since I was 21 years old. This is not management theory. EOS is working every day. Be careful what you wish for with this system. You'll get it. After EOS, you'll make quicker decisions to change people, strategy, systems, and processes where necessary. It will help you reduce needless complexity, identify and remove distractions, identify and troubleshoot any problems, and keep you and your people engaged and focused on a single vision. The six key components of the
7:01 entrepreneurial operating system EOS go right to the roots of the six most important aspects of your business and strengthen them eliminating all of your symptomatic issues by solving the real ones. EOS is a method even a way of life that will help you crystallize your vision and build a strong organization by first understanding and then implementing what you learn. You will be able to accurately monitor the pulse of your company and know how it's really doing. At some point on this journey, you're likely to say, as every client does, "Hey, this stuff is simple." That's because it is. If you're looking for the next fashionable MBA methodology, this isn't it. EOS consists of timeless, practical, universal principles that have been tested in almost every kind of organization.
7:48 What's dramatically new is the integration of these best practices into a complete system for organizing and operating your business that will endure for decades to come. I have tremendous respect for you, the entrepreneur. You take risks, you drive the economy, you keep your country at the forefront of innovation and you sacrifice everything to fulfill your dreams. As a result, you create most of the jobs and give other people the opportunities to live their dreams. My passion and purpose is to help you succeed. Now, let's begin this journey at the end by envisioning what your company could look like after implementing EOS. Before we begin, I'm proud to add this new final paragraph to the introduction of this expanded edition of Traction. With its success and five more years of real world
8:34 experiences under my belt, I've updated this book to include a new chapter intended to help you, the reader, implement these tools more purely. In many places, I've added clearly marked sidebars which include additional teachings and new discoveries made over the last 5 years, and I've added over 50 updates throughout the book. Please enjoy this second edition of Traction. And if at any time you get stuck, don't hesitate to reach out to us as we now have a complete online support platform to help the many thousands of leaders in our community at no cost. Chapter 1 asterisk the entrepreneurial operating system strengthening the six key components asterisk every great system is made up of a core group of basic components. The same applies to a business. The entrepreneurial operating
9:20 system EOS identifies six key components of any organization. In the words of an EOS client, I used to worrying about 100 different things. Once I learned there were six components to my business, and I focused on only those, those 100 different things I've been worrying about went away, EOS made running the business simpler. You're probably worrying needlessly about a hundred different things yourself. Let's try to remove you from some of those worries by taking a wide-angle view of your business and its components. Below are the six key components of any organization. Vision. Successful business owners not only have compelling visions for their organizations, but also know how to communicate those visions to the people around them. They get everyone in the organization seeing
10:06 the same clear image of where the business is going and how it's going to get there. It sounds easy, but it's not. Are your staff all rowing in the same direction? Chances are they're not. Some are rowing to the right, some are rowing to the left, and some probably aren't rowing at all. If you met individually with each of your employees and asked them what the company's vision was, you'd likely get a range of different answers. Asterisk, the more clearly everyone can see your vision, the likelier you are to achieve it. Focus everyone's energy toward one thing and amazing results will follow. In his book, Focus All Rise illustrates the point in this way. The sun provides the Earth with billions of kilowatts of energy. Yet, if you stand in it for an hour, the worst you will get is a little sunburn. On the other hand, a few watts
10:53 of energy focused in one direction is all a laser beam needs to cut through diamonds. In the vision component chapter, you will use a tool called the vision traction organizer VR2 to focus your people on one target and become like that laser beam. The tool simplifies strategic planning by distilling your vision into simple points that allow you to clearly define who you are as an organization, where you're going, and how you'll get there. It will help you define your sweet spot as in organization and keep you focused on the areas in which you excel most. It will also define your marketing strategy and crystallize your 10-year target, three-year picture, and one-year plan. In addition, you'll learn to effectively convey your vision to your staff and ensure that it's embraced by everyone.
11:39 People successful leaders surround themselves with great people. You can't build a great company without help. EOS cuts through buzzwords such as a players platinum 100enters and superstars to provide a practical understanding of the two essential ingredients of any great team. The right people in the right seats. Be truly honest with yourself. Are all of your people the right ones for their jobs? The reality is that some are probably hurting your cause more than helping. The people analyzer tool in chapter 4 will help identify the right people by teaching you how to determine who shares your core values. It will also teach you to simplify how you hire, fire, review, reward, and recognize people in your organization. This process will prompt you to step
12:25 back and look at your overall structure. You'll ask yourself hard questions about the way your business eyes organized. You'll also learn the power of the accountability chart as well as how to structure your company the right way while clearly defining the roles and responsibilities within your organization. Once you have the right structure in place, you'll be able to focus on putting the right people in the right seats. There will be no gray area when you incorporate the next tool, GWC, which addresses the three absolutes for any good hire. They must get it, want it, and have the capacity to do it. Once you incorporate GWC into the people analyzer, you'll have a working tool that determines which people are the right ones and which people are in the right seats. Data. The best leaders rely
13:11 on a handful of metrics to help manage their businesses. The data component frees you from the quite of managing personalities, egos, subjective issues, emotions, and intangibles by teaching you which metrics to focus on. My business mentor Sam Cup owns several companies totaling over $300 million in sales, including QEK Global Solutions, a worldwide fleet management company that he built into a $100 million business and then sold. He is one of the best businessmen I've ever met. I was blessed to have him take me under his wing at a young age and teach me everything he knew. Of all of that wisdom, the most useful thing he taught me was the power of managing my business through a scorecard. A scorecard is a weekly report containing five to 15 highlevel
13:59 numbers for the organization. In the data component chapter, you will learn to create and implement this powerful tool into your company. It will enable you to have a pulse of your business on a weekly basis, predict future developments, and quickly identify when things have fallen off the track. Because you're regularly reviewing the numbers, you'll be able to quickly spot and solve problems as they come up as opposed to reacting to bad numbers in a financial statement long after the fact. Asterisk a scorecard allows you to monitor your business no matter where you are. You won't have to suffer from the uneasy feeling of not quite knowing what's going on in your business. Nor will you have to waste time asking a halfozen people for the real story. The answers will be right at your fingertips. In addition to learning to
14:45 create and implement your scorecard, you will take your data management to the next level by learning to empower each person in your organization. Everyone will have a clear, meaningful, and manageable number that he or she is accountable for on a regular basis. Issues. issues are the obstacles that must be faced to execute your vision. Just as an individual's success is directly proportionate to his or her ability to solve any issues that arise, the same holds true for a company. One helpful byproduct of strengthening the first three EOS components is transparency. Execute them properly and you will have created an open organization where there is nowhere to hide. As a result, you will smoke out issues that have been holding you back. The good news is that in the history of
15:30 business, there has only ever been a handful of different kinds of issues. The same ones come up over and over again. In time, you will become an expert at identifying them and knocking them down. To the degree you can identify them, discuss them honestly in a healthy environment and learn to eradicate them. You will achieve your vision. Regardless of how long you've been plagued by your problems, the issues component represents a huge opportunity. In the bustle of day-to-day operations, most companies don't invest the time required to adequately solve their issues. The irony is that by taking the time to address a problem, you will save two to 10 times that amount of time in the future. In the issues component chapter, you will learn how to use the issues list at all levels in your organization, allowing you to
16:16 compartmentalize and prioritize all issues. In addition, you'll benefit by creating an open and honest culture where people feel safe to speak the truth and voice their concerns. You will then use the issue solving track to eradicate these issues. This powerful tool is an efficient way to identify, discuss, and solve your organizational issues in a lasting and meaningful way. By the end of the issues component chapter, you and your staff should understand how to identify various issues, create and manage an issues list, and master the issues solving track, taking you one step closer to building a problem-solving work environment. Process your processes are your way of doing business. Successful organizations see their way clearly and
17:02 constantly refine it. Due to lack of knowledge, this secret ingredient in business is the most neglected of the six key components. Most entrepreneurs don't understand how powerful process can be. But when you apply it correctly, it works like magic, resulting in simplicity scalability efficiency and profitability. You will not get your company to the next level by keeping your processes in your head and winging it as you go. Ask yourself, have you documented the way you want everything done in your organization? Do your people know what processes they are following and why? Are they all executing the required procedures uniformly? Are they skipping steps? By deciding what the process is and training everyone to follow it, you will enhance your troubleshooting abilities, reduce your errors, improve efficiency,
17:49 and increase your bottom line. In the process component chapter, we will identify, address, and document each of your core processes using the three-step process documenter. This tool will help you crystallize your business model by capturing the blueprint for the machine you aspire to build in a single document. From there, you will learn how to get your staff to understand the value of these processes and begin to follow them. By the end of the journey, your processes will be clearly identified documented understood and followed by everyone in your organization. Traction in the end, the most successful business leaders are the ones with traction. They execute well, and they know how to bring focus, accountability, and discipline to their organization.
18:34 Due to fear, and lack of discipline, the traction component is typically most organizations weakest link. The inability to make a business vision a reality is epidemic. Consider it a new take on an old quote. Vision without traction is merely hallucination. All over the world, business consultants frequently conduct multipleday strategic planning sessions and charge tens of thousands of dollars for teaching what is theoretically great material. The downside is that after making you feel warm and fuzzy about your direction, these same consultants rarely teach how to bring your vision down to the ground and make it work in the real world. How would you rate the accountability throughout your organization on a scale of 1 to 10? Most new clients that start the EOS process rate their
19:20 accountability somewhere around four. Gaining traction requires disciplines. First, everyone in the organization should have rocks which are clear 90-day priorities designed to keep them focused on what is most important. The second discipline requires implementing what is called a meeting pulse at all levels in the organization which will keep everyone focused, aligned, and in communication. In the traction component chapter, you will first learn how to set rocks so that everyone will know what they are accountable for in the coming 90 days. Next, you'll learn how to implement a meeting pulse. While most people feel that meetings are a waste of time, they are necessary and useful tools. As part of the component, you'll learn how to make meetings enjoyable,
20:05 productive, and worthwhile. The level 10 meeting agenda is a tool that will help you get to the core of what makes for great meetings, namely conflict and resolution. By the end of chapter 8, everyone in your organization should know how to establish and achieve their rocks. They'll also be engaging in effective, productive meetings using the tried and true level 10 meeting agenda. Now that we know what the six key components are, we need to assess where your company is right now. The organizational checkup at the end of this chapter will tell you exactly where you are on this path. You can also fill out the questionnaire online at www.eosworldwide.com/checkup. Several of the terms won't be clear to you yet, but in a short time, you'll know exactly what they mean. Fill out
20:52 the questionnaire and use the attached key to get your results. You'll be coming back to this checkup on a routine basis. The goal is to make progress every 90 days. Each time you fill out the checkup, your overall percentage should increase. It's unreasonable to think that you'll jump from 20% to 80% overnight, but you will make steady progress. In summary, successful businesses operate with a crystal clear vision that is shared by everyone. They have the right people in the right seats. They have a pulse on their operations by watching and managing a handful of numbers on a weekly basis. They identify and solve issues promptly in an open and honest environment. They document their processes and ensure that they are followed by everyone. They
21:39 establish priorities for each employee and ensure that a high level of trust, communication, and accountability exists on each team. The six key components together make up the EOS model, most organizations operate below 50%. If they succeed, it's in spite of themselves. Although it's nearly impossible to reach 100% in every component, achieving over 80% will turn your company into a welloiled machine. All the things you've been worrying about will simply fall into place and the common frustrations that have been plaguing you will go away. Now that the big picture is clear, let's begin the journey. But before we dive head first into the nuts and bolts of the first component, you'll have to free yourself from the bad habits and
22:25 unhealthy practices that are holding you back. This is called letting go of the vine. Organizational checkup for each statement below. Rank your business on a scale of one to five where one is weak and five is strong. One, we have a clear vision in writing that has been properly communicated and is shared by everyone. Two, our core values are clear and we are hiring, reviewing, rewarding and firing around them. Three, our core business is clear and our systems and processes reflect that. Four, our 10-year target is clear and has been communicated to everyone. Five, our target market is clear and our sales and marketing efforts are focused on it. Six, our differentiators are clear and
23:10 all of our sales and marketing efforts communicate them. Seven, we have a proven process for doing business with our customers. It has been named and visually illustrated and everyone is adhering to it. Eight, all of the people in our organization are the right people. Nine, our accountability chart, organizational chart of roles and responsibilities is clear, complete, and constantly updated. 10, everyone is in the right seat. 11. Our leadership team is open and honest and demonstrates a high level of trust. 12. Everyone has rocks and is focused on them three to seven priorities per quarter. 13. Everyone is engaged in regular weekly meetings. 14. All meetings are on the
23:56 same day and at the same time each week have the same printed agenda, start on time and end on time. 15. All teams clearly identify, discuss, and solve key issues for the greater good and long-term. 16. Our systems and processes are documented, simplified, and followed by all. 17. We have a system for receiving regular customer and employee feedback, and we know their level of satisfaction. 18. A scorecard for weekly metrics and measurables is in place. 19. Everyone in the organization has a number. 20. We have a budget and are monitoring it regularly, i.e. monthly or quarterly. Total number of each ranking. Multiply by the number above. Add all
24:42 five numbers to determine the percentage score that reflects the current state of your company. Percent. Scoring results. If your score falls between 20 and 34%, please read on. This book will change your life. 35 and 49% you are normal. But would you prefer normal or great? 50 and 64% you are above average, but there is still room for improvement. Asterisk 65 and 79% you are well above average. 80 and 100% this is where most EOS clients end up. This is your goal. Chapter 2 asterisk. Letting go of the vine asterisk. An entrepreneur slips and falls off the edge of a cliff. On his way down, he manages to grab onto the end of a vine. He's hanging there 1,000
25:29 ft from the top and 1,000 ft from the bottom. His situation seems hopeless, so he looks up to the clouds and decides for the first time to pray. "Is anybody up there?" he asks. After a long silence, a deep voice bellows down from the clouds. "Do you believe?" Yes, replies. The entrepreneur then let go of the vine, says the voice. The entrepreneur pauses for a second, looks up again, and finally responds. Is there anybody else up there? Most business owners are unable to reach the next level because they are simply not ready to let go of the vine. You might know the feeling. You want to see your business grow, but at the same time, you're frustrated, tired, and unwilling to take on any more risk. The truth is that before you can grow, you'll need to
26:16 take a leap of faith. But don't worry, you won't have to act until you are comfortable and clear on all of the EOS tools. Here's a textbook example of the man. Hanging from the vine, he'd only started the EOS process because his head of sales and marketing had begged him to. At the time, this man had his hands in every aspect of the business. His makeshift leadership team was a sham because he pulled all the strings. On top of that, he was logging 80 work hours a week and was overworked to the point that he'd actually started to nod off during meetings. He was a zombie. But once in an uncharacteristic moment of vulnerability, he admitted to me in confidence that he didn't want to live that way any longer. He put his faith in the EOS process and into years he
27:02 managed to elevate himself to a true leader for an organization that had a solid leadership team in place. Now he spends more time with his family. He's decidedly less stressed and he's generating more profit than ever. If you're not happy with the current state of your company, you have three choices. You can live with it, leave it, or change. If if the first two are not an option, it's time to admit that you don't want to live this way any longer. Change is scary. You're not alone in feeling anxious about jeopardizing what you already have. But despite these worries, it's time for a shift in thinking. You need to change from believing that you are your company and letting it become its own entity. With the right vision, structure, and people in place, your company can evolve and
27:48 realize its full potential. To be truly ready for this change, you must be willing to embrace the following for fundamental beliefs. One, you must build and maintain a true leadership team. Two, hitting the ceiling is inevitable. Three, you can only run your business on one operating system. Four, you must be open-minded, growth oriented, and vulnerable. Building a true leadership team. Would you prefer a dictatorship or a true leadership team approach to running your business? Both leadership methods can work. So, you have to decide. The philosophy of this book advocates a healthy leadership team approach where you build a team of people that define the company's vision with you. These leaders all have clear accountabilities and must be able to
28:34 take initiative over their respective departments. You must also all remain open and honest about all issues and be willing to fight for what is best for the company as a whole. Dictatorships not only are exhausting but also prelude future growth. It's simple math. One person can only make so many decisions and solve so many problems. You cannot build an enduring successful organization that lives beyond you if your organization is designed to crumble the minute you step aside. Until now, you probably been holding all the pieces together on your own. But once your organization reaches a certain size, you won't be able to lead that way. If you want to grow, it's not possible to maintain a hand in sales, service, accounting, complaints, and follow up on
29:20 a regular basis. This means that it's time to let others take control of those areas and that you have to decide who you want to do so. Each of your departmental heads should be better than you in his or her respective position. Of course, you will need to give them clear expectations and instill a system for effective communication and accountability. Once you have the right people in the right seats, let them run with it. Your job right now is to select these people wisely. if they don't already work in your organization, you'll have to find them elsewhere. Best-selling author and highly sought-after speaker Patrick Lynchon summarizes this very point in his book, Obsessions of an Extraordinary Executive. The four disciplines at the heart of making any organization worldclass, his first rule of building a
30:07 healthy organization. Build and maintain a cohesive leadership team. Once your team is in place, each member needs to agree that the problems in the organization are also his or her responsibility. Once you take responsibility for a problem, you can help to solve it. Don't worry if you don't know how to solve a particular problem just yet. That will all be covered by the issues track in chapter 6. The next leap of faith you have to take is this. As goes the leadership team, so goes the company. Your leadership team must present a united front to the rest of your organization. In a nuclear family, when the child doesn't like the answer from mom, he or she might go to dad. In your company, there can be only one answer, and your leadership team needs to parent everyone to greatness. Asterisk hitting the
30:53 ceiling is inevitable. Organizations usually expand in spurts by smashing through a series of ceilings. Reaching the natural limits of your existing resources is a byproduct of growth and a company continually needs to adjust its existing state if it hopes to expand through the next ceiling. You and your leadership team need to understand this because you will hit the ceiling on three different levels as an organization, departmentally, and as individuals. In all of these instances, growth is your only option. If you're not growing, be it internally or externally, you're dying. Most companies strive for external growth. But internal growth also leads to future greatness. In fact, most companies need to start with a focus on internal growth before
31:39 they can even think about external growth. The paradox is that they will actually grow faster externally in the long run if they are focused internally from the outset. Shear wealth strategies SWS exemplifies this point. Founded by Robert Shear in 1971, SWS built a solid organization with a great reputation. After being joined by his son Mark and his son-in-law Jason Zimmerman, Shakar decided to aggressively grow the company. Unfortunately, their internal operations were already at capacity, chaotic, and in need of reorganizing before the company could hope to expand. With a powerhouse sales team, a strong culture, and great product offerings, their only barrier was operations capacity. They had hoped to get
32:24 operations open for business within a few months. To meet this extremely aggressive timeline, they needed to change their corporate structure, reassess their staff, and make their processes consistent. Through hard work, focus, and determination, they eventually achieved this goal. They clarified their vision, set up the right structure, put great people in place, and streamlined their processes. After a little more than a year, their reorganization was finally open for business. That may seem like a large-time investment, but it couldn't have happened any faster, and the results now speak for themselves thanks to their very talented team. They have grown an average of 50% per year for the last 3 years. In the long run, they have
33:10 grown faster than if they had started aggressively, selling and forced the new business into an operational structure that couldn't handle the increased sales. The entire structure might have imploded, causing them to upset and lose valuable customers. Instead, the patience and hard work they put in paid off. If your organization needs an internal transformation first, be honest with yourself and spend the next one or two years growing internally and honing your business model so it can support external revenue growth. But regardless of whether you grow inside or out, you're going to hit the ceiling. While there are a lot of differing statistics out there on the subject, they all point to the same conclusion. Many organizations fail because they're unable to survive these growing pains. On its official website, the US Small
33:58 Business Administration reports that roughly 50% of small businesses fail within the first 5 years in a study published by the monthly labor review in 2005. Economist Amy Enelp states that 56% of businesses die within the first four years. And in his book, The EMTH and the E-Myth Revisited, author Michael Gerber paints an even scarier picture, saying that 80% of businesses fail in their first five years, and 80% of those remaining will fail somewhere between years. Minus 1 through 10. The good news is that you can survive hitting the ceiling by choosing a leadership team that possesses five core leadership abilities. Above all else, your leaders need to be able to simplify, delegate, predict, systemize, and structure. To the degree that you and your team apply
34:44 these five abilities, you will grow to the next level. Let's take a look at them one by one. Simplify the acronym KISS. Keep it simple. Stupid is your mantra here. Simplifying your organization is key. This entails streamlining the rules you operate under as well as how they're communicated. The same goes for your processes, systems, messages, and vision. Most organizations are too complex when they begin. Use models visuals acronyms and checklists to simplify processes and procedures because as your organization grows, it will get more complex. Henry David Thoro got to the core of the issue in Walden. But Ralph Waldo Emerson later did him one better. asterisk simplify simplify. Henry David Thorough one
35:30 simplify would have sufficed. Ralph Waldo Emerson Dan Sullivan the creator of the strategic coach program makes the point as follows. No further progress and growth is possible for an organization until a new state of simplicity is created. With its many tools, the entire EOS process is designed to help you create that new state of simplicity. It's a common thread you'll see over and over again throughout this book. Less is more. Delegate your ability to break through the ceiling. also depends on your ability to delegate. Be prepared to delegate and elevate to your true God-given skill set. You'll have to delegate some of your responsibilities and elevate yourself to operate at your highest and best use. It's not practical for you to remain chef, head waiter, and
36:16 dishwasher as your company grows. By hanging on to all the tiny details, you're actually constricting the company's growth. When you experience that personal growth, the company will grow under you. This is exactly what is meant by letting go of the vine. When you let go, however, you need to make sure you're letting go of the right duties. The responsibilities that you delegate to other people have to be tasks that you have outgrown. These include things such as opening mail, writing proposals, approving invoices, and handling customer complaints. Sometimes we're afraid to pass off jobs that aren't much fun for others, but at a certain point, you'll have to. The beauty of this transition is that there are people who have the skills and enthusiasm to do these jobs. Not only
37:03 will you need to learn how to delegate and elevate, but the people around you will as well. Just as you need to figure out how to build an extension of yourself, your team can also extend the company by building teams under them. Thus ensuring the company's continued growth. Asterisk predict asterisk prediction in business is done on two basic levels. Long-term and short-term. Long-term prediction. Publicly held companies predict earnings. When they later announce their actual earnings, either they hit the prediction or they don't. If they hit it, their stock continues to climb. If they miss, their stock simply drops. In a small to midsize privately held organization, you don't have the luxury of missing your prediction. If you do, it may put you out of business. Long-term predicting is the forecast of everything 90 days and
37:49 beyond. To do so, your leadership team has to know where the organization is going and how you expect to get there. You do this by starting with the far future and working your way back. What is your 10-year target? What is your three-year picture, your one-year plan? What do you have to accomplish in the next 90 days in order to be on track? At first, this task may seem daunting. So, let's take a little pressure off. No one has a crystal ball. No one can know what will happen tomorrow with certainty. Long-term predicting is not really about foretelling what will happen. It's making a decision about what you will do tomorrow based on what you know today. Put another way, your leadership team has to climb the tree more often than others. I liken long-term prediction to
38:36 a team of short-sighted people cutting a road through a jungle. They may be the most productive team that's ever cut a road, or they may be twice as productive as any other team before them. However, if there's no leader there to climb a tree and tell them where the road is going, they might very well be cutting a zigzag. Get good at taking the long view. As leaders, you'll need to stop working in the business 100% of the time. And as Michael Gerber, author of the EMT and the E-Myth Revisited puts it, work on the business every so often instead. This discipline will get you to where you want to go faster. Short-term prediction. While the long-term view addresses business needs 90 days and beyond, short-term focuses on the immediate future. These are really the issues that will arise on a daily or
39:22 weekly basis, and your ability to solve them will affect the long-term greater good of the organization. As a leader in an organization, you're probably hit with at least half a dozen problems a day.
47:30 Chapter 3 asterisk the vision component asterisk. Do they see what you are saying? asterisk. A few years ago, my dad made a humorous observation. People have a habit of firming up their convictions in conversation by asking the question, "Do you see what I'm saying?" On the surface, a question like that doesn't really make any sense. You really can't see what someone is saying. Later, it dawned on me that the expression made all the sense in the world. My dad is a visionary. He was my first mentor and he taught me how to lead, manage, communicate, and deal with people, whether it be one or 10,000. He is one of only 140 Hall of Fame members of the National Speakers Association. He also built the number one real estate sales training company from the ground
48:15 up and is a two-time finalist for the Ernst and Young Entrepreneur of the Year award. As he well knows, most entrepreneurs can clearly see their vision. Their problem is that they make the mistake of thinking that everyone else in the organization sees it too. In most cases, they don't. And as a result, leaders end up frustrated. Staff ends up confused and great visions are left unrealized. The process of gaining traction starts here. Clarify your vision and you will make better decisions about people, processes finances strategies and customers. Entrepreneurs must get their vision out of their heads and down onto paper. From there, they must share it with their organization so that everyone can see where the company is going and determine if they want to go there with
49:01 you. By getting everyone on the same page, you will find that problems get solved more quickly. In the five dysfunctions of a team, Patrick Lynchon credits a friend who built an organization from a startup to a billion dollars in revenue with the following observation. If you could get all the people in an organization rowing in the same direction, you could dominate any industry in any market against any competition at any time. A technology company that recently began the EOS process came to me after hitting the ceiling for two straight years. The biggest problem was that the leadership team couldn't put its finger on why. There ended up being many reasons, but the key factor was that the company had no central vision. It was providing three very different services to the
49:47 market. And because people had to change hats up to several times an hour to cater to different clients, the internal operations were needlessly complex. With EOS, the company made the decision to focus in one direction. In two sessions, the leadership team clearly defined their vision of who they really were, what they really wanted to do, and where they really wanted to go. In a very short time, they simplified the organization and freed up resources by shedding two of its services. This allowed people to focus and excel in one area with one type of client. Now, the company has clear goals and a laserous marketing strategy. Not surprisingly, it's once again beginning to grow as a result of these decisions. It recently had its best first quarter ever,
50:33 generating a 125% increase in revenue over the previous year's first quarter. The first step is letting go, because the vision you're about to clarify can't be about you. It has to define something bigger. You need to create a vision that points the way to a greater good. The sooner you do that, the sooner you will make better decisions that build an injuring company. To learn how to create a strong vision, you must first answer eight important questions. Asterisk answering the eight questions. Let's start by dispelling the myth that a company's vision has to be a 100 pages long. You might need that level of detail for financing. But rarely is it necessary to build a great company. By simply answering eight questions, you and your leadership team should be able to clearly state your vision and ultimately enable everyone in the
51:20 organization to see where you want to go. The first tool in EOS is the Vision Attraction Organizer V2. Not only is the VO to designed to get your vision out of your head and onto paper, it will help you answer these eight questions, it's meant to help you create a clear picture of where the company is going and how it will get there. Most importantly, it does so simply by boiling your vision down to only two pages. An example of Avia to appears on the next page and an electronic version of the V2 can be downloaded free at www.eosworldwide.com/bto. I first learned the power of simplicity and planning from my previous business partner Ed Escobar along with my dad Ed and I used to co-own and run a real
52:06 estate sales training company. Once Ed told me about the time prior to my joining the organization when he had presented a quite lengthy business plan to my dad. After the first look, my dad said, "Can you condense it to 10 pages?" A little frustrated, Ed replied, "Sure." After some work, he came back with a 10-page business plan. My dad liked it, but wondered aloud. Could you condense it to two? A little more perturbed, Ed complied once again. After some more work, the two-page business plan was created. When my dad's request to condense it to one-page profit impossible, the idea of a two-page business plan was born. That simplistic business plan was the catalyst for the creation of the number one real estate sales training company in North America.
52:53 This led Ed to create a simplified business planning tool known as the life business management plan. It was the first tool I ever used for business planning. asterisk that notion was eventually helped along by Vern Harish, author of Mastering the Rockefeller habits, highly sought-after growth guru, founder of the young entrepreneurs organization, now the entrepreneurs organization and a regular contributor to fortune small business. Harish introduced me to his one-page strategic plan. Additional inspiration for the V2 in his book, The One-Page Business Plan, Jim Hin also deflates several popular myths. Two of which are that business plans must be long to be good and that they take six months, a significant amount of the owners and key staff members time and expensive consultants
53:38 to create. As Horn understood, neither of these things is true. The simplified approach to strategic planning is generally the best approach. What is vision? It's clearly defining who and what your organization is, where it's going, and how it's going to get there. It should be simple to articulate your vision because it's probably already in your head. Unfortunately, if there are five people on your leadership team, there may be five different variations of the company vision. The goal is to get you all on the same page to the degree everyone on the team can answer the following eight questions and absolutely agree you will have a clear vision. By answering the following eight questions and filling out the V2, we will clarify exactly what your vision is. Let's get started. The eight
54:24 questions are as follows. One, what are your core values? Two, what is your core focus? Three, what is your 10-year target? Four, what is your marketing strategy? Five, what is your three-year picture? Six, what is your one-year plan? Seven, what are your quarterly Roxy8? What are your issues? Please note that it's recommended that you try to answer all eight questions in a full one or today off-site session. What are your core values? What are core values? They are a small set of vital and timeless guiding principles for your company. A good rule of thumb is to limit them to somewhere between three and seven. As always, less is more. These core values define your culture and who you truly are as people. When they are clear,
55:11 you'll find they attract like-minded people to your organization. You will also find that when they are applied in your organization, they will weed out the people that don't fit. Once they're defined, you must hire, fire, review, reward, and recognize people based on these core values. This is how to build a thriving culture around them. Unfortunately, most organizations have not defined their core values, and the resultant lack of clarity hinders their growth. When your people don't embrace your core values, their actions hurt your cause more than help it. By not defining what your values are, you have no way of knowing who believes in them and who doesn't. When image 1 started the EOS process, the leadership team learned early on that we would be spending a few hours determining image 1's core values. Company co-owner Rob
55:59 Duba argued that they must solve issues first. We prepared a list of issues and there are a ton. He said we should do this core value thing after we solve those. In reply, I asked him to take a leap of faith and told him that if he didn't like the way our core value search was going after an hour, we could move on to the list of issues. After the process was over, Rob changed his tune. I didn't just like the way it was going. I loved it, he recalls. I've been sold ever since. I tell that story to all New Image One team members. And when I speak to groups about EOS, defining core values changed our company, the way we do business, and the way we select our people. Much has already been written on the power of identifying core values and instilling them in an organization. In
56:46 the course of writing built to last, Jim Collins and Jerry Iporas spent six years researching organizations that have endured through recessions and depressions for decades. One of their key findings was that in every case, these companies define their core values in the very early stages and built a culture of people around them. Despite that, the perceived value of core values has diminished as of late. After all the hype in the 1990s, they are now frequently regarded as cliched and tired. This, ironically, is what makes them more vital than ever. In this book, they are the first step to forming your vision. One important thing to understand is that core values already exist within your organization. They've just been lost in the day-to-day chaos.
57:33 Your task is merely a matter of rediscovering what they are and instilling them as the rules you play by. The following is the exact process all EOS clients follow for discovering their core values. First, schedule time with your leadership team. I recommend a minimum of 2 hours, preferably away from the office as strategic thinking is always best done off premises. In that meeting, you proceed as follows. Step one, have each member list three people who, if you could clone them, would lead you to market domination. These three names should preferably come from inside the organization. Once each person has his or her three, post all of the names on a white board for everyone to see. Step to go over the names and list the characteristics that those people
58:20 embody. What are the qualities they exemplify? What do they do that puts them on the list? Start with a long list so that you can see all the possibilities to help your thought process. Here is a list of real world core values. Unequivocal excellence. Continually strives for perfection, wins, does the right thing. Compassion, honesty, and integrity. Hungry for achievement. Is enthusiastic, energetic, tenacious, and competitive. Encourages individual ability and creativity. Maintains accountability. Services the customer above all else. Works hard, is never satisfied, is interested in continuous self-improvement. Helps first. Exhibits professionalism. Encourages individual initiative. Growthoriented asterisk. Treats everyone with respect. provides opportunity based on merit. No one is entitled to
59:06 anything. Has creativity, dreams, and imagination. Has personal integrity. Isn't cynical. Exhibits modesty and humility alongside confidence. Practices fanatical attention to consistency and detail. Is committed. Understands the value of reputation. Is fun. Is fair. Encourages teamwork. Step three. Your organization's core values are somewhere in that long list you've just created. Now narrow it down. In your first edit, circle which ones are truly important. Draw a line through the ones that are not and combine those that are similar. Remember, the rule of thumb is between three and seven. After the first round, you should have the list down to somewhere between five and 15. Step for here is where you're going to make some tough decisions. Through group
59:52 discussion and debate, decide which values really belong and are truly core. Remember your goal is to get your list down to between three and seven. Here are some examples of EOS clients real world core values. McKinley can do Gumby service results. Adroid Shector Wealth Strategies clients needs first always a complete wow experience. A special place to be cutting edge knowledge. We are the experts. Zup fresh soup company actionoriented can do attitude no jerks open and honest passion for the brand. Gumby trademark and copyright notice and copyright Prima Vision Inc. and Premma Toy Co. Randall Industries collaboration. Enthusiastic, energetic, tenacious and hardworking. Honesty and integrity, humility, pride in work. Ability to adapt just professional
1:00:39 ground services. We do whatever it takes in every situation. We have fun. We are passionate about our work. We have integrity in all that we do. Don't run out and tell everyone immediately after you've established your core values. Instead, let them simmer for 30 days and then meet one last time as a team to sign off once and for all on the final list asterisk. The next step in the process is to communicate these core values to the rest of the organization. It's time to create your presentation speech. People won't necessarily understand what you mean if you merely state each core value. That's why each one needs to be backed up with stories, analogies, and creative illustrations to drive home its importance. When writing your core value speech, make sure you word each core value with the same
1:01:24 pattern or tense. For example, two always or we always make sure to bullet point three to five supporting examples under each. This will give you a rough guide of how the speech should be laid out. From there, you can improvise. Below is an example of an actual outline for a core value speech. Team oriented approach. You can get what you want by helping others get what they want. It's all about service. How can we serve our customers and fellow employees? Strive to always act for the greater good of the organization, not our self-interest. We should view ourselves as playmakers. A good assist is often more satisfying than getting the goal in sports and at work. In sports, team play overcomes raw talent if that talent is not playing
1:02:10 together. This applies equally in the work environment. We are a team and presently a very good one. Let's together aspire and work to become great. Commitment to excellence, as the saying goes, we only get one chance to make a first impression. Let's make it a good one, the written word. It should be clear, concise, and directly to the point. My dad is fond of saying, "If I had more time, I would have written a shorter letter." His point is this, let every word tell. Use wei versus I. Using we signifies you are a representative of an organization larger than yourself. The use of I canote ego. Be professional when the situation calls for it. And likewise, feel free to be casual in the
1:02:55 right circumstances. Use your emotional intelligence here. However, when in doubt, are on the side of professionalism and conservatism. Reputation outweighs profit every time. Problem- solving approach. What do we do? Well, solve problems. How do we solve problems? Well, get the facts. State the issues correctly and succinctly ask the right questions. Engage in unrestricted but efficient debate. Listen carefully to all arguments based on relevant facts and persuasive argument. Decide next. Course of action. Assign responsibility for next steps. Promptly execute on agreed upon course of action. Follow up on progress at next meeting. Sometimes a decision is made by not making a decision. Sometimes a wrong decision produces a better outcome than no decision at all. Velocity of decision-m
1:03:42 is often as important as the quality of the decision. Other times, protracted contemplation is warranted in order to get the right outcome. This is an art, not a science. Experience counts here. Cander, open and honest communication should be our goal. We can all pursue improvement. If we are constructively apprised of our strengths and shortcomings, be clear and honest yet sensitive and supportive. Avoid talking down to others. Seek to communicate with proper balance of confidence and humility. When a decision is made that is not in line with your recommendation, simply move on. Don't take it personally. It does not reflect negatively on the value of your input. Fairness demand results. Have a sense of equity. What is a just result under the
1:04:30 facts. It's okay to be tough when circumstances call for it, but do not take unfair advantage of your strength. Be compassionate if you're dealing with a ruthless or unethical opponent. Fight hard, but always within the rules of engagement. Don't fall into the trap of stooping to his or her level. Balance works smart. Do what is necessary to get the job done right. Valuable output is the greatest measure, not hours put in. Anyone can keep busy, but that does not equate to productivity. The story of the accountant who works until 11 p.m. during tax season but has ample time for golf. Family in the offseason months. An example of life in balance. Volunteer in the community. Always seek to give back. Involve your family. For more
1:05:16 inspiration. Here is a complete core value speech as it was delivered to the 51 employees at Wolf Group by the co-owner Stuart Wolf. We at Wolf Group are about to embark on our 10-year anniversary, one decade in business as Wolf Group asterisk. But actually, nothing is more important than the number 51. Yes, 51. That's the number of individuals, people. Yes, you that make up the Wolf Group team, the Wolf Group family. Here are a few more numbers. We could not have been in business for 10 years with four offices in three states as one team if it were not for each and every one of you. Each and every one of you adds something to define who we as Wolf Group are. We are one of the leaders in our industry. Yes, but we are so much more. Enough about numbers.
1:06:03 Let's use some words. Words such as integrity and honesty, hard work, serviceoriented dedicated teamwork. The words above describe us as wolf group. These words describe what makes us tick, what drives our passion, what is at our core. The heart of wolf group, the heart of us. These words describe a part of each and every one of you. Why do customers do business with Wolf Group? With a Scott asterisk, with a Tina, with a Bill, with a Lynn, with a Josh, with a Debbie, with a Hank, with a Barb, with a Shawn, with a Steve, with a Kelly, just to name a few, because these people I just mentioned, and all of you understand the importance of treating others with respect and being honest, sincere, and trustworthy. We know how important integrity and honesty are to a
1:06:50 relationship, any relationship, whether it be a business or personal one. Tie that in with a sincere interest in understanding the needs of our customers, listening to their needs, and being ready to assist when needed. To jump in and help out makes us serviceoriented. This is why when a customer like ABC Company calls and tells Tina that the new product is on their menu next week and the supplier is out of stock, Barb stops what she is doing and adds onto the supplier's order to take care of the increased demand for this product. And then again, when we find out that the supplier's order is on hold due to a credit issue and Debbie has to stop what she is doing to help get that deduction cleared so the order will ship on time, that shows that we are dedicated and
1:07:35 don't mind hard work. Then Shawn gets an urgent call from XYZ company on a Thursday afternoon saying, "We need you in a sales meeting first thing tomorrow morning with PDQ company." So Shawn calls Debbie in a panic to help him out and put together a custom flyer for the next morning that she completes and emails to Shawn at 1:00 a.m. that night that proves we thrive on teamwork. We respond with a yes, we can do it for you. We can make it happen. This is a team of serviceoriented individuals that are focused on their customer needs, work hard, and are ready to do whatever it takes. I can go on sharing more and more stories, but luckily for all of you, I will just name a few. One thing you will notice about these words is that they're virtues that we can't teach in a class or train you on. They are
1:08:21 part of what makes up each and every one of you. It's your core. These are your core values and it's what makes your heart go pitterpatter every day. Whether it is in your upbringing or in your genes, I am not really sure. But one thing is for sure, people with these virtues are the ones we want to be a part of our team, of our family. Continuing to be committed to finding the right people will be one of the keys to taking Wolf Group to the next level. Identifying what makes us tick is important because it lays the groundwork for who we are, where we are going, how we are going to get there, and when. We are on a path that will take us to places we have never been before and things we have not achieved before. We are on a path that will send us and drive us to wherever we want to go. It
1:09:08 is a very exciting time at Wolf Group. I am so glad that each and every one of you is a part of it. I am driven and dedicated to making the next 10 years at Wolf Group the best ever. I hope you will all join me for this ride. It's going to be fun. Here's to our next decade of blazing a new trail. This core value speech was a tipping point for Stu Wolf to catapult his company to four times its size. He delivered this speech five years ago. And since then, with clarity of his culture, he and his partner decided to part ways due to a
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