The Scalability Code

Growing With EOS: Managing Big Personalities & Building Strong Teams, with Damon Neth

• Matt Haney • Season 1 • Episode 1

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Discover how visionary leadership and strategic planning can transform your business in our enlightening pilot episode with Damon Neth. Join host Matt Haney as he delves into the journey of an expert EOS implementer who's reshaped companies from small enterprises to major corporations. In this episode, you'll hear:

  • Damon Neth's transition from working with large corporations to empowering small businesses 
  • The strategic importance of an accountability chart for organizational success 
  • Insights into measuring business success and evolving your scorecard details 
  • Techniques for managing big personalities while ensuring strategic alignment 
  • How Damon's experiences have shaped his approach to leadership and scalability

Connect with Damon: https://www.linkedin.com/in/damonneth/

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Welcome to The Scalability Code, the podcast that helps you get out of the sh*t show and start growing your business. A few times each month, you'll hear stories and commentary from visionary entrepreneurs, EOS implementers, and fractional COOs about how they've taken businesses to Level 10. And now for your host, Matt Haney.

Matt Haney:

All right. Tell me about yourself, Damon. Give me a little backstory on who you are.

Damon:

Hi, I'm Damon Neth. I'm an expert EOS implementer who's delivered over 500 sessions of traction or the entrepreneurial operating system to executive teams and companies that are running on EOS.

Matt Haney:

Love it. And where are you based and where does some of your customers live? And give me a little backstory, like on just kind of, is there a particular niche of clients you tend to work with?

Damon:

I'm based in Austin, Texas, and I work with companies of all stripes, everything from field service organization and blue collar organizations all the way up to high end professional services or tech or financial services companies. That's one of the great things about EOS is it works for any type of company that really wants to grow. to create transparency throughout the organization, set a clear vision that everybody can get behind and establish traction in the form of discipline and accountability to really achieve that vision.

Matt Haney:

So you came, you and I know each other going back from, from several years, but a little backstory, I know you worked in tech on your own business, you know, have been involved in the Austin entrepreneur community for a long time. Tell me how you ended up getting to where you are as an implementer and also your, your backstory as an interim exec.

Damon:

Yeah. So, you know, I've really had three chapters to my career. I worked as an interim exec from mid nineties up through the mid two thousands. And that was a really exciting part of my career because that's where I was working with these huge household name companies like. Cablevision or Kmart Sears or Dunkin Donuts to drive transformation and change really from the technology seat. So tearing the guts out of their enterprise technology, replacing it with new and shiny systems and then helping those organizations reinvent operations and reorganize themselves to take advantage of those huge changes. So I love doing that work and that really showed me the power of corporations and of having unlimited resources. But what I didn't really care for were a lot of the things you hear from others big company, politics, sub agendas, you know, just a lot of people that I felt weren't all pulling in the same direction and my work was so critical and so, dependent on the success of everybody pulling in the same direction that ultimately I decided I wanted to control more of my own future and I became a small business entrepreneur. Yeah. My wife Stacy and I have owned and operated five companies, acquired a bunch of others and divested some. And what I learned along that road was that it's not as easy to get things done when you don't have unlimited talent and resources and money at your disposal. So that really taught me the other side of the business world about bootstrapping, having to, you know, create everything with your own hands and get it done with your own team. And I thought along the way, man, wouldn't it be great if I could bring these two worlds together, you know, helping more small and mid tier companies the way I used to help and work with big companies. And that's why about 10 years ago, I started my current firm CXO Service Co, which is focused on helping organizations change and transform, basically getting healthy. That's where I discovered EOS, the Entrepreneurial Operating System, and the book Traction as a way of running a better business. And that's my mission now, is helping as many companies as possible get healthy and strong with EOS.

Matt Haney:

So you said, I think over 500 sessions, right?

Damon:

Yeah, yeah, I'm not

Matt Haney:

So tell me what that

Damon:

sure on the current number. But yeah, I passed the 500 mark earlier this year.

Matt Haney:

and that means you've spent in a room virtual or in person 500 different strategy sessions. Planning sessions, development sessions, working with small business owners and visionary leaders to, to structure their business. Is that right?

Damon:

That's exactly right. Yeah, I work with the executive teams of these organizations. You know, even small companies have a leadership team, and that's who I work with so that they can help set vision and get traction in motion. And that's exactly the way we work in full day sessions where we're setting strategy, diving deeply to work on the business rather than being consumed by working in the business, which is, of course, how most of us live our lives.

Matt Haney:

It's exactly right. You and I both see it every day. It's a little overwhelming to say the word 500 or the number 500 out loud. For me, I can only imagine what it's like for you sitting there on the other side of the table going, man, 500 days, but that's a, that's quite an accomplishment. And I feel privileged. I've sat in sessions with you. You and I have worked together on a couple of different clients and. I've always enjoyed your tact and approach to, to engaging with with the variety of the, the, the clients that you work with. So tell me people ask about EOS me all the time. I, it's funny. I was on a fishing trip with some friends, a dentist, a guy comes up. He's like, Oh, I'm. We're using this operating system. It's like this visionary. So you're using EOS? He goes, yeah. So we, it's like it, once you're involved in it, it tends to come up over and over. So an example of, of the smallest company and an example of the biggest company you've worked with, give me, give me some, just whatever comes to mind.

Damon:

Yeah, so it's great. You know, my very first client, as luck would have it, was also my very smallest leadership team of one an entrepreneur who had uh, who had an existing business. It was up. It was operating. It was healthy. It was just very small. And he knew that he wanted to scale that business. There was huge market opportunities ahead of him and ahead of the company. And so we basically set out of the course they were gonna follow using E. O. S. So rather than you know, kind of meeting with the leadership team setting strategy about the founder set strategy built out the future of the organization from a structural perspective and things like that. And then he was able to go forward, confidently hire, put people in those seats, pursue that vision, knowing what it was going to take to get there. And, you know, a large size. I mean, gosh, you know, what? EOS is designed for companies typically between 10 and 250 employees. But my largest client was over a thousand employees. And that just goes to show you that, you know, you can get great results. If you really want to drive an entrepreneurial type of company, you know, where the spirit is with the employees, empowering them trying to get out of people's way and make things better, you know, as companies grow, a lot of times we layer in all this bureaucracy and policy and stuff That kind of drains the life out of the organization and removes power from the individuals.

Matt Haney:

Yep. So let's jump into a couple different topics. I wrote down some things here that, that are common and I'm going to list them off because I know your brain is going to think about some of these things and anything else that comes up. Let's let's, so I put accountability chart on here measurement of success, leadership training and development. Managing big personalities, hiring and leveling up because kind of with that leadership development, but a few of those topics, I want to try to find some, some conversations around, because those are the things that I see and deal with every day. I know that's the stuff that you're coaching and all of your sessions and working with. So. Let's jump into accountability chart and talk a little bit about the relevancy of it and the uniqueness of it. And as it relates to EOS, but also just having a hierarchy and a structure. So give me give me your, your overview of the accountability chart as you see it and, and some opportunities or challenges or struggles or benefits you've seen, you know, you know, rolling it out as many times as you have.

Damon:

Sure. Yeah, well, you know, the accountability chart is not only a functional breakdown of an organization, who does what and who reports to whom but it's also a roadmap, right? To, to those same things, right? So that we can go to people, we can divide and separate jobs and really let people hyper focus. Focus on being great in one area. And that's the interesting thing about entrepreneurial companies is especially at small stage, we all kind of swarm and we operate almost like a tribe to solve problems and make progress. Well, once we hit a certain stage, we've really got to start dividing and separating so that people can have clarity on what success looks like. They can have success in those jobs because they're not trying to do a million different things and they can become much, much stronger by really hyper focusing on those disciplines.

Matt Haney:

I want to interject because I think literally I'm dealing with that this week with a client, their mechanical, electrical, mechanical plumbing and, and, and sheet metal company in Austin, they've got a fabrication shop, 20, 000 square foot shop, It's like the quintessential accountability chart opportunity when the manager of the shop who was is in his 60s, very successful, has done very well, but struggles to give responsibility. He pulled me aside this week and said, Hey, I don't wanna do this forever. I'm ready to, to ready to differentiate and, and build out some roles and responsibilities. And it was like, my heart warmed up because it's like, that's exactly what you want to hear. You want someone to say, I understand the need and the value of splitting apart some of the roles and responsibilities. And he tends to think. You know, in the blue collar world, it's everyone's labor. I'm like, no, no, all these guys have different skills. So we literally pulled everyone into the conference room. These guys have their welding jackets on and they're, you know, they took their hard hats off and set them on the table. And we literally, we started breaking out roles and responsibilities for each one of them, down to like, who's responsible for doing the tool count every week. That may sound, but now, now somebody else doesn't have to think about it. Cause the tool count is handled every Thursday at 10 o'clock. By the guy on the list because it is part of his roles and responsibilities. So it's interesting that you said that and I'm going through that this week.

Damon:

Well, you know, also the interesting thing is, you know, as, as you start to grow these companies and things like that, a lot of times we have our own, you know, what I would call mind trash around these things. And we think if we put in formal structure or define jobs formally, you know, we'll get a rebellion or people won't want to work here. They feel like they're being micromanaged or something. And the reality is when you do this exercise, you create accountability chart overwhelmingly. I hear, wow, we are so happy that we've now done this and understand what our jobs are and aren't you know, it's so, so critical for an organization that's growing and scaling.

Matt Haney:

Now I don't have to think about that because I know this person has it and I know that that's their job and it was mine and they did it and now this or that.

Damon:

One of the opportunities that companies miss is doing this exercise, thinking about the company going forward as compared to just trying to document the work people do today. You know, the reason I love EOS is because it guides companies through a strategic planning and thinking process gently, right, where we don't have to upset the whole company or rethink the whole thing. But you take this one tool as an example, accountability chart, and you say, well, What does this company need versus what do we do? Completely different question.

Matt Haney:

Very, very, very interesting. And, and I, I think you hit on something that, that speaks to me. And I find myself dealing with this daily on, in, in kind of my own head trashes. I get so focused in what we're doing today, doing today. Cause the problems of today are the problems that, that you solve, right? But as you're saying, the problems of the day are today, but we have to look. We have to build that accountability chart for the next six months. And then at times I think, look at, look at what it could be for the next year and a half. I don't go much further than that because it's, it's too hard to go that far. But getting, you know, getting people to think about seats and needs today versus seats and needs tomorrow proverbial tomorrow is a huge challenge because as you said, we're all focused on in the business naturally.

Damon:

Yeah. And so important to like you said to kind of think no more than 18 months out. It's not like you can't do that work, but like you said, it's tough sometimes to imagine. But even if you do it well, what are you going to do with this team? Today. Right? So you now know where you're going in two years, but I mean, you still, like you said, have problems, challenges, goals for today that you've gotta pursue. That's really what we want the organization to be aligned around and that, and that's what separates you know, how, how serious I think companies are about EOS, you know, I'll encounter folks like you mentioned you are on a fishing trip and someone said they use e os. One of my first questions is, do you have an accountability chart? And many companies that say they run on E. O. S. Don't really fully implement all the tools. And so when companies tell me that they don't have one, I know for sure they're not really running on E. O. S. Because you just can't. It's the basis for accountability for performance review for key job metrics, all these different things that come from a great organizational structure. And a lot of people just think it's more like documenting what we do, and it's not valuable versus embracing it as strategic tool that it is. Mhm.

matt-haney_2_02-06-2025_192447:

You are listening to the Scalability Code. I'm your host, Matt Haney, founder of Sinclair Ventures, and we help visionary entrepreneurs like you get out of the shit show and focus on growing your business. We offer fractional COO and leadership coaching services that free up that brain of yours to focus on what's next. Learn more about us at SinclairVentures. com. Now back to it.

Matt Haney:

Let's switch gears a little bit and talk about measuring success because I do have a selfish need here. I've got you on here. I'm going to get your, get your wisdom while we're here.

Damon:

Put me to work.

Matt Haney:

yeah, I have a client right now who does a very nice job of measuring, has a great scorecard EOS scorecard. I'll let you talk about it in a second, but I'd love to get your thoughts. Me, I'm not, I'm, I'm, I'm definitely more of a low D than a high D on the, on the Culture Index, meaning my detail measurement of success, I do, and I know it, but I'm not as detail and linear focused as, as other, you know, integrators are. I've got a company that, that we see six or eight metrics that are just, you know, Maintaining the same, same, the same every week. They're, they're green, right? They're, they're doing well, but we're measuring something that's not changing. So give me a little backstory on scorecard and then try to touch that topic around, you know, consistency, you know, to consistency and measurement. Okay.

Damon:

look at a scorecard and a scorecard that's all green could be a sign of strength or a sign of weakness. It really depends on how the organization has viewed that. You know, for example, like many of my strong clients have scorecards that they measure weekly that are, primarily green. They've set good plans. They decided on these metrics that back up progress to these bigger goals, and they're crushing it. And that's great. However, a lot of times companies will have a green scorecard, and they're just not really feeling like they're successful. You know, it's much more spotty or feels like much more of a heavy lift. to get the results that they're looking for. And so I think that's the opportunity to say, well, if we're, if our scorecard says we're crushing it, but we don't feel that, then what is amiss here? And a lot of times that's what you're talking about is what are the next generation of key metrics or measurables or KPIs that we should be looking at to drive the business to the next level of performance.

Matt Haney:

Right. So question around like, you know, I see this measurement on the scorecard and it's green and I say to myself and to the team, what are we doing with this metric? I mean, we know we've measured I give cash as an example, cash in the bank fluctuates. 5 percent week to week APAR is very solid. Okay. That's great to measure. I always like to know how much cash we have. Our APAR is all based on cycles. This particular client has a government contracts. They get paid on the first of the, you know, whatever the payment cycle is. But, but there's other ones like

Damon:

Doesn't sound powerful or informative.

Matt Haney:

I mean, it's good to see it's on the scorecard. I don't feel like it's wasting anyone's time. It's good information, but you know, that one, I think it's kind of an anomaly because people always like to know where cash is, especially as an executive team. You want to know where the overall health of the business is. So then, okay, that's a value. Let's show everyone on the executive team where the cash position is, because that gives everyone reassurance that everyone's paychecks clearing and that we're making money. Great. But productivity in the field is an example. This client measures they're a contractor that met, that is doing, you know, progress work billing, basically, you know, 5, 10, 50, whatever. So, their metrics on, on productivity or, or, you know, throughput, whatever you want to say, you know, they're, they're 5 percent off, they're 10 percent over every week. So that number's red. Right? But it's 10%. And they're like, well, it is what it is. The project is what it is. We're dealing with humans and tools and labor and schedules. So I'm trying to think of another way to measure this productivity in the field that's meaningful and impactful and not demoralizing. Any suggestions?

Damon:

I think you've hit on a really big topic here, which is that, you know, a lot, our scorecards need to be actionable and what we discover over time is a lot of our scorecards are just interesting. The things that we think are going to compel us to action. We don't take action on. We look at, we shrug our shoulders. We have all these facial expressions, but at the end of the day, we're not compelled to take action. So, you know, I would ask the team, like, what is the value of looking at this, right? If we're never going to do anything about it. And you know, once you attain strength in a given area, like you were mentioning cash position and nobody cares to look at it anymore, that's a great time to just delegate it to a seat, right? Your responsibility in the accountability chart box for your seat is to maintain, you know, Whatever cash position,

Matt Haney:

So don't

Damon:

that we don't have to look at it. We know we've got accountability around it. Yep

Matt Haney:

Yeah, we got it. That's interesting. I didn't even think about that. It's just saying, hey, this is now on your day to day roles and responsibilities. If something comes up, add it to the issues list. We can talk about it. But otherwise, we're assuming this is your role and responsibility. And there's no news is good news.

Damon:

yeah, and maybe it moves down to a department scorecard or an individual scorecard or something like that but yeah, you know what you're talking about here is like we keep missing to me that sounds like like a commitment issue one way or another I don't know if we are not committed to hitting the goal or if the goal itself is not good Like a lot of my teams will say hey, you know Last year, we were 5 million company next year. We're going to be a 10 million company. And so if they put 10 million on their scorecard and break that down into weekly goals, they're going to miss for most of the year until they hit that. That's just not really, nobody feels compelled to take action because they're not expecting that number to be there. So that's where I'm always asking, is this the right goal? Like, are we committed to achieving this? If not, then we've got to talk about what are the barriers from getting there. Sometimes we just set an unrealistic goal, and that's why nobody cares about it.

Matt Haney:

That's interesting and I want to dig one step further there. How often do you, in that scenario, we've got a goal that the team doesn't believe in. It was maybe set as they were self implementing. You know, it's been there, but it's also pretty arbitrary. Like what, what do you, what do you suggest in terms of how frequently to look at changing a goal or changing a scorecard metric, is that a quarterly? Or does it feel like we're just changing all the time?

Damon:

Well, there are times that it makes sense to change or update scorecards, right? So when we meet quarterly and we set a new number for the quarter and we want to have visibility and line of sight to that. That's we do it annually when we just change all of our goals. We want to make sure that we have good scorecard. But beyond that, I think it comes down to again the team's actions around. If I see misses and nobody wants to dig into the issue or nobody has anything to say about it, then my question is, is this valuable, right? Should we be measuring this? Do we have the right goal? Are we measuring it correctly? Right? Some data is so choppy that if you just look at a straight number and say, you know, we want a hundred thousand dollars in the bank each week. Well, I mean, if we're 105 and 95 and all this, the data is very choppy and the team just gets used to it not being. Hitting the goal and they say, Oh, next week, it'll be high because it always is. So that's where a rolling average or something like that might make sense. There's also exception indicators like you know, maybe we want to measure overall quality, but where it's really actionable to us is, Hey, how many customers actually Reported a quality score of three or less last week. Like, that's what we really care about. We could have 9. 7 overall, but if we have five customers that say we really screwed up last week, that's probably the more actionable thing.

Matt Haney:

Yeah. Let's focus on the challenge, not the success and the success is great. But like those five customers, especially when you're. Maybe surveying you know, 15, 20 customers a week. If, if five or six of those are unhappy, then yeah, we've got a big red flag. Got about four minutes left. I want to, I want to hit on one more thing because I've leaned on you about this previously. Managing big personalities. I think you do a very good job, Damon, of, of counseling me and others on how to handle relationships and big personalities. Who claim they want to move to the middle and claim they want to do better, but then they revert back to their old ways. Give me, just give me a nugget around, you know, ways to take big visionary personalities to, to action and, and, you know, get them moving forward. That's

Damon:

as a consultant, you as an interim executive, you know, we're there to make a visionary's will reality a lot of times, right? I mean, there's a problem. There's something that's wrong. They're going to hire a hired gun and a player like Matt to come in and solve it. But then a lot of times you see this dysfunction where you don't feel empowered or you don't feel aligned, or you feel like maybe there's something that you don't understand that everybody else does. And so, and I saw this a lot early in my career. I was a young person, literally, you know, at a seat in the C suite of these huge organizations. at their will, right? They engaged me as a consultant to be there. So, you know, how do you manage these powerful personalities when you don't have direct authority? And so that's where, you know, I always develop some some things to keep myself safe in these dangerous environments. One is just kind of. Developing the ability to manage up. That's really what we're talking about. Because when you manage up, you don't have authority. So you have to use influence. And, you know, so for me, it's always important when I'm bringing controversial topics to discussion with powerful people that I'm sticking to the facts, right? That I'm not presenting opinion or emotion around things because I could just be seeing the world wrong. But if I can bring a fact like, you know, Okay. Didn't you say that you wanted this outcome X, Y, and Z? Yes, I did. And so I try to point to facts, you know, cause they may say, Oh no, I'm not. Or whatever. So then it's like, well, you know, you pulled the budget from this project or you change the priorities on these things, or do you understand that? This thing had a knock on impact to that. So I'm always trying to come from a place of facts and reason so that I could have the real discussion with this person as compared to getting trapped in an argument about someone's feelings or emotions around those things. And I think it's always important also to acknowledge that we probably all want the same things, right? We might be going about the differently. But like you brought me into help. You have this executive team that you said on a mission. You said these are important goals. Yet we're not all acting in a way that's gonna get us there. And I feel like, you know, that's the whole notion of speaking truth to power. You know that, frankly, when I work as an interim executive or even as an E. O. S. Implementer with my pay grade comes taking bullets for the team. You know, sometimes I have to say the thing no one else will because it needs to be said. And frankly, I have less at risk. I'm, I'll be leaving this company someday. I'm not an employee. People who are on the executive team are going to feel a little bit differently about it.

Matt Haney:

Man, you said it well. And I talked about this in a previous, you know, story I said is that my relationship as an interim with the person who's, who's brought me in is is one that is so unique and different and just unfathomable how much you know, candor, respect, appreciation, gratitude, but also, you know, the constructive criticism we can give because our goal is to be brought in to do that, knowing that, you know, we, we can't we, we, we, we get fired, we get fired. We brought in and do the hard things.

Damon:

So Matt, one of the reasons I love working with you is because in a lot of regards, you see the world the same as I do. You're very much a straight shooter, taking problems down to the ground, creating actions working with and through people rather than around them or being, you know, kind of like a dictator which many people think is leadership. So, you know, I've always appreciated you for your leadership style, your management ability And ultimately, you know, just getting things done, which is you know, I think undervalued in this world sometimes.

Matt Haney:

Very well said, Go run. Thank you, Damon. I appreciate you.

Damon:

All right.

Thank you for listening to The Scalability Code. If you made it this far, please follow the show on Apple, Spotify, YouTube, or wherever you get your podcasts. Let's get out of the sh*t show together. We'll see you next time on The Scalability Code.