Business Operating Systems Compared; EOS and Great Game of Business (#277)

On this episode of the "Maximize Business Value Podcast," our Certified Mastery Partner host, Dave Casey, and Panelists, Amy Morin & David Brown, discuss why having a Business Operating System matters for your eventual exit. Listen in as Dave Casey, Amy Morin, and David Brown break down the mechanics of EOS vs. The Great Game of Business. 

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Podcast Chapters
00:00 — Introduction
01:50 — What Is a Business Operating System?
03:49 — Overcoming the Chaos of "Ready, Fire, Aim" Leadership
05:37 — EOS vs. The Great Game of Business (GGOB)
08:50 — Open-Book Management and Transparency
14:50 — Accountability, Scorecards, and Metrics
21:52 — Rolling Out a New System
30:44 — EOS Level 10 Meetings vs. Weekly Huddles
39:40 — Choosing the Right System
45:24 — Outro

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Learn More about Dave Casey
Dave Casey is an engaged business leader with an eye for cybersecurity, non-profits, and business transformation. Dave previously founded and led an IT managed services company, brought it through a successful exit, and today helps companies craft cybersecurity strategies.

Learn More about Amy Morin
Amy Morin is an accomplished entrepreneur and Business Growth Coach who brings exceptional value to your network. She has an impressive background as a Certified EOS Implementer®, Outgrow Sales Advisor, and Certified Exit Planning Advisor®.

Learn More about David Brown:
David Brown is a seasoned business leader, consultant, and growth strategist with over 30 years of experience leading, scaling, and turning around small to mid-market companies. 

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Transcript

Tom Bronson (0s): Welcome to the Maximize Business Value Podcast, brought to you by Mastery Partners, where our mission is to equip business owners like you to maximize your business value and achieve the exit of your dreams, whatever that means to you. With insights gained from over a hundred business transactions, we share real world strategies, lessons, and expert advice to help you build long term sustainable value in your business.


Each episode is hosted by one of our Mastery certified partners, their seasoned experts who've helped countless business owners navigate the complexities of growth, scaling, and building value. They bring firsthand experience, actionable insights, and a passion for helping you build a business that thrives. So, let's dive in.


Dave Casey (60s): Well, hello, this is Dave Casey, and I'm one of the partners here at Mastery Partners and doing something we haven't done before, and I've joined by two of our other partners, Amy Morin and, and David Brown. So, welcome guys.


Amy Morin (1m 13s): Thank you.


Dave Casey (1m 14s): Yeah. Yeah. So this'll be a fun little exercise, I think. So I'll have, I'll have you guys intro your yourselves in just a minute. But really the reason behind this, we, we get a lot of questions from our clients when we're doing what we call the Transition Readiness Analysis. We actually run the clients through a, a questionnaire and gather a kind of deep, deep information about their company. But even before that, we have a set of discovery questions. We, when we engage with a client, just to see if it's gonna be a big, a good fit between Mastery Partners and, and their company.


And one of the questions we ask is, are you using any type of business operating system? And many times they get kind of a blank stare and they say, well, we got QuickBooks. Is that, does that count? Or they'll go, well, we use an, you know, ERP system, or something like along those lines. But that's new, not what we're really talking about. So we're talking about the concept of a business operating system. It's a structured way to essentially run your business. So Amy, I'll start with you and just, you know, I know you've got a little bit of background being owning multiple different businesses over the years, and did you always use a business operating system?


Amy Morin (2m 24s): You know, we, I'm, I'm the perfect example of getting run over by your businesses when you don't use an operating system, and therefore you just couldn't wait to get rid of them.


Dave Casey (2m 35s): Oh, wow. Wow. Oh,


Amy Morin (2m 37s): Yeah. Yeah. But I became an US implementer because I started doing some work with a construction company after selling my other, my construction company and selling our fly fishing resort. I was working at doing some consulting with a company that was running on e os. So I gotta see the difference between what it looked like to run a business without an operating system and a business with an operating system. And it was like night and day. Wow. And so I wrapped up my consulting gig with them and became an EOS implementer.


Dave Casey (3m 8s): Great. So just, I know most of the people viewing this will probably know what EOS is, but what does that stand for and what does, what does that mean?


Amy Morin (3m 16s): Yeah, so EOS stands for the Entrepreneurial Operating System, and it's based on the book Traction that Gino Wickman wrote, and Gino developed EOS and it's a way, a structured way of running your company. And then I'm sure I'll save the rest for the, when we get into the discussion.


Dave Casey (3m 36s): Sounds great. Sounds great. So, David, I, I know you're coming at this a little from a little bit different angle, but you might share your experience in, in running a company and with and without a structured operating system, so


David Brown (3m 49s): Yeah, absolutely. So I'm, I'm the son of an entrepreneur, and that entrepreneur grew a, a pretty good size successful business with completely ready firing. And then I ran his business for him, which means I was downstream from the chaos he created. Oh, wow. In fact, my, you're a good someone once describe that. You know, I, I'm a firefighter and I love putting out fire, you know, fires, but I worked for an arsonist, and that's how it kind of felt when you're downstream from already fire aim.


So we did not, we ran a business for a long time without an operating system. We were big fans of Patrick Lencioni and implemented a lot of his philosophies, but I wouldn't call it a system until we found ourselves, you know, growing a business top line and struggling to match that with bottom line. Mm. And couldn't figure out exactly what was happening. That's when we came across The Great Game of Business originally, a book written by Jack Stack and kind of turned into, and, and it's a way to align incentives and motivations of employees and owners.


And so we adopted that in, in 2020, and it just did phenomenal things for our business. We were acquired, and then the acquiring private equity backed firm ended up implementing GGOB across the much larger organization. And I currently have two clients that I work with that both run on EOS, and their desire is to implement GGOB as a compliment to EOS. So I think today is not a EOS versus GGOB Monster Truck rally. It's, it's much more of a, they do different things.


Yeah. They accomplish different goals, but they can be complimentary in the right business.


Dave Casey (5m 28s): Oh, that's excellent. Yeah. So that's, that'll be a, that'll be a good take on it then, looking at it from that standpoint. So, great. So we'll start with the first area that I wanted to talk about, and that is organizational alignment. And, and both of you kind of, I think, expressed maybe a little frustration of if you're running a business without kind of an underlying structured business operating system, that this organ organizational alignment is a big challenge. So David, I'll start with you.


Did you see that before you implemented The Great Game of Business?


David Brown (6m 4s): Yeah, a hundred percent. I mean, I, I think, again, through some lencioni's books and philosophies, we had kinda strategic planning in place, but, but EOS does very, very well as cascade strategy down from 10 year to three year to one year to quarterly to what are we doing this week? And aligning those things that is, is phenomenal. And so I think EOS, from my perspective, and, and Amy's the expert, but it, it does a really good job of helping owners and, and leadership teams create vision planning, accountability, and execution discipline.


I think it's really good at those things. What GGOB does is, is it really teaches an entire organization how a business makes money. Oh. And then it aligns ownership and everybody in the organization on the information needed. Like, how is the business doing? There's a tremendous amount of financial transparency in a business run on GGOB. And then there are storytelling around why is a business making money or not making money so that it's educating people every week on how the business is doing.


And then generally, it's tied to something called a game share, which a lot of times is tied to EBITDA or profit sharing. And so if the owners are interested in building enterprise value, what GGOB does is align employees rewards with owners' rewards, so they're all rowing in the same direction. So I feel like EOS organizationally does a really good job of creating structure in lots of areas. The economic alignment, I think is where GGOB leans in as a compliment to EOLs.


Dave Casey (7m 36s): Okay. That's pretty cool. So Amy, as far as organizational alignment, what are, what is the, what are the tenets of EOS around that?


Amy Morin (7m 44s): Yeah, so we start out with organizational alignment. It's really around aligning around the vision of the organization first, right? It's really the, the, the vision for where you're going is where we make the decision, right? So without vision, you have no decision, no test of what, how we're gonna make decisions or where we're gonna go, right? So we end up with organizational alignment around that. We also end up with organizational alignment using the accountability chart. So there are lots of tools in EOSI, you know, I come from the construction background, and so a carpenter goes to work with a toolbox full of tools.


And EOS is that for a business, right? It's, it's about harnessing human energy around the organization to all row in the same direction. And I completely agree with David, it's not one or at all, because they really do two different things. It is one, and if you feel like you need that, right? Yeah. Yeah. And can, I'd love to talk to David A. Little bit about, we also in EOS encourage open, honest, transparent organizations, right?


And that transparency should have a financial element to it. So let's just say, for example, you know, your one year goal, right? When you share that for organizational alignment at your state of the company meeting, that should include a revenue and a profit number. However, I often find small business owners are very reluctant to share that there's, they're reluctant to share financial information. So I'd love to know from David, how do you, what's the workaround for that?


David Brown (9m 33s): Hmm. Well, I think generally small business owners can be reluctant to share financial information. And, and the question becomes, is it dangerous? Right? Yeah. Is it going to undermine, you know, my leadership, my authority, my ability, my freedom to do with, with economics, what I, what I desire? So I, I do think, you know, one of our struggles that we had when we first read the book, we love the concept, but the idea of financial transparency of, of literally open book management kind of scares us.


Yeah. And then we went to a great game of business conference. We started talking with other business owners and found out, I mean, it's not everybody knows what everybody makes, that, that's not what they mean by financial transparency, but it is radical. And so largely, you know, you create a scorecard, a score, a scorecard, a scoreboard, and that is a rolled up p and l so to speak. So there might be 10 to 15 revenue lines, 10 to 15 expense lines. You've got the budget column showing what the month is supposed to look like, and then every week you're gonna meet everybody in the company, and you're going to forecast for the month based on the first week you're gonna come back a week later, you have one week of actual, you have three week of potential, and you're gonna forecast the month in week two, week three, and week four, so that everybody in the company is seeing revenue expenses, ebitda, they know exactly how the business is doing.


And then after you close the books two weeks into the following month, you're gonna take 10 minutes, you're gonna come back and you're gonna reconcile actual against final forecast. And you're gonna try to, to, to where were there differences, right? If somebody missed something by $300, it doesn't matter. Yeah. But if a forecast was missed by 30%, the answer is why? It's not, it's not a blame, it's, it's, nobody's the enemy. It's what is the story behind the forecast, either good or bad, the actual in, in forecast being different. And as they tell those stories Yeah. People understand how a business makes money.


Yeah. And then they begin to understand the business beyond just their job. And, and, and that's what it does, is it aligns everybody around the business making money.


Amy Morin (11m 37s): Well, and I would say, sorry Dave, I, I would say, right, it aligns people around the value of the seat that they sit in. And that's what we do in EEO too, right? In our accountability chart, you see what you are accountable for, and that accountability is the value of what you deliver in the seat that you sit in and the impact that it has in the organization. And what I hear you saying, David, is that you add a financial element to it, right? In your scorecard. So


David Brown (12m 7s): E exactly. Because the two part, yeah, the two clients that I have on the OSI mean, that, you're right, they have a 10 year or three year, a one year, they share those goals, and it does have revenue, and it does have ebitda, but they don't run transparent books throughout the month or throughout the quarter, or throughout the year. So maybe a quarterly town hall, they give an update. Yeah. But it's not a level of a seeing Exactly. Not only did we make or not make money, but where was that impact that they created that result and why. Yeah.


Dave Casey (12m 37s): Yeah. That's,


David Brown (12m 38s): And it's that unearthing of why that is so revelationary in, in the business.


Dave Casey (12m 42s): See, I think that's the, the trepidation that I've seen. I, I certainly had it when I was running my business of, if you're too transparent, let's say things are going great, we're at, we're ahead of all of our numbers. You're, you're transparent with that and, and you're celebrating, Hey, we're, we're, we're killing it. Right? Well, as soon as you say we're killing it, it's, it's, it's just like in the back of your mind, everybody's gonna be in my office now asking for a raise because we're killing it. Right? Or on the other side, let's say that we're struggling, we haven't made our number for this month or this quarter for whatever reason.


Could be internal, could be external, could, but for whatever reason, now there's people's doubt. You know, geez, do I wanna work here? What if this company's struggling? What if it goes outta business? Or what if it gets bought out? Or, you know, what if something bad happens? So there's always that, that trepidation that people have that they'll invent. But,


David Brown (13m 36s): But I think Dave, you know, the reason they're in your office asking for a raise is they don't have an outlet to do well when the company does well.


Dave Casey (13m 43s): Yeah.


David Brown (13m 44s): The idea of GGOB is that they've got a profit share so that they will automatically get a distribution as a result of the company doing well. So the business is gonna give them a raise. They don't have to come finagle me to give them a raise. And, and, and that ideally is the magic. Now it works both ways. 'cause if the business is not doing well, they know that they're not going to get that. Hopefully they feel informed and empowered to try to do something about it. But, but you know, obviously it can work against you.


Dave Casey (14m 13s): Yeah, yeah. Yeah. We, we definitely, we shifted from annual bonuses to quarterly bonuses for that reason that people could see real, you know, sometimes you get into a se a season where, you know, you know, first quarter's gonna be strong and third quarter's gonna be weak, so, and everybody's on pins and needles get to the end of the year to see if we're gonna get a bonus. Well, they can secure that bonus first quarter, then we'll attack second quarter, then we'll attack third quarter. So, yeah, I can see. So we had a level of transparency, but nothing close to what gay great KA does.


But, but, and that kind of brings us into to item number two, really, which is accountability and metrics and, and how do you hold people accountable? What metrics do you look at and do people actually buy in and accept that? And I know with EOS, we run EOS at Mastery Partners, well Mastery Group, all three companies, there's varying levels of buy-in, I think in terms of, of acceptance stuff. But what is, what has been your experience, Amy, with, with accountability and metrics?


With, with EOS?


Amy Morin (15m 22s): Yeah. So accountability is actually an outcome of great leadership and great management. Right? And you as a leader and a manager, actually really need to be both. You need to have, you know, there's time for leading, which is all about the vision, right? Yep. And managing is all about communicating. How are we going to achieve that vision? And that's really where the accountability comes in. People are not gonna be led to someplace where they actually don't know where they're going. Right? Nobody's gonna be accountable for anything if we don't know what, what the clarity is around that.


So in eos, it does start with that accountability chart that I mentioned earlier, right? So then you know exactly what you're accountable for. But it, it really is the value. There's an exchange of resources in an organization, right? I'm gonna pay you in exchange for you bringing value to the company. And I'm gonna clearly define what that value is in the accountability chart. We use it as a workforce planning tool too.


So it starts there, then it gets tracked weekly with your scorecard metrics, right? So everybody in the company has at least one scorecard metric that they're accountable to. And we track that every single week at the L 10. In addition to that, anybody in the company who has rocks also, there's some metrics that tied, tied to that.


Dave Casey (16m 52s): And rocks are a a 90 day goal, right?


Amy Morin (16m 55s): They are 90 day initiatives, yes. 90 day initiatives that are getting you to your one year. So an EOS, we basically eat the elephant one week at a time, one quarter at a time, one year at a time. When you're looking at your long range, you know, goal, your five to 30 year goal, what Tim Collins refers to as a behead, right?


Dave Casey (17m 16s): Right. So, and you, David, you described a little bit on accountability and metrics within great game, but does, do you see that it varies from company to company of how transparent they are or how they're setting up metrics or, you know, the way things ultimately get accounted for?


David Brown (17m 36s): Yeah, I mean, certainly gain or companies have the liberty to choose a different critical number. So most businesses choose ebitda, but they don't have to. So you could have a different critical number that would drive a different level of transparency and accountability. What, what EOS does really, really well is what Amy explained, that, that from vision on down, it really drives long-term to short-term vision to what's most important. This quarter updates on those rocks every week to the quarter. And then those metrics. So GGOB really doesn't have a component that, that, that does that.


That's why I think they're so complimentary. Yeah. But there is a tremendous amount of financial accountability. So, you know, if you're a person in charge of one of those revenue lines and you're reporting actual to forecast in front of the entire company every week, there is a tremendous amount of accountability that you should forecast accurately. And if you miss your mark, you're gonna be telling the entire company why you missed your mark. And that's why you're here


Dave Casey (18m 34s): Is that you


David Brown (18m 35s): Can't back. Yeah. Well, and, and then you're back the next week. So there really is no being sick. It's a buy-in. You know, that, that we're all accountable to one another. If we want good things to happen for the business and for us individually, we have to succeed. I'm accountable and I contribute to that success individually, into the, to the corporate good. And so they, they have to, to buy in on that. Now, we had our, our scoreboard that had, you know, financial metrics. We also had, I'd say eight to 10 metrics that were just key to the business. And so we happened to run a consulting business. And so things like utilization and bill rate deals created from a sales perspective, pipeline value were things we reported on every week so that we created visibility to the business.


So there was some accountability, but it's not done in, in like the organized fashion that that e os is.


Dave Casey (19m 24s): Hmm. So it's more, it's more a guide, maybe a set of guidelines. And each company kind of implements it a little bit differently from that state.


David Brown (19m 32s): It it, it's a measure against a target, but it doesn't necessarily inherently tie to 10 year, three year, one year quarter and, and metrics. And that's where I think EOS does such a, such a phenomenal job.


Dave Casey (19m 44s): Yeah. You got a good perspective having done both, I guess. And you know, that,


David Brown (19m 48s): And, and I love both. I mean, if I were with a company running on GGOB, they probably have problems that EOS would, would solve. Yeah. Even if they're running GGOB well, or vice versa. Yeah,


Dave Casey (19m 57s): Yeah. Definitely. So,


Amy Morin (19m 59s): So would you fee, do you feel like David, that GGOB is classified as an operating system? Or is it, it's all like, it's a, it's a way of getting deeper on the financial side, right? Because I,


David Brown (20m 13s): That's a good question. I I don't think I would classify it right. As an operating system. I think I would classify it as a way of aligning employee and ownership interest Yeah. To a common goal. Yeah. And, and there's a tremendous amount of education that goes along with, with doing that. But it, but I, I wouldn't call it, I think what, where GGLB fit into our company was a, an alignment around incentives and rewards. Yeah. And then ultimately an accountability to how we're doing on that.


But we used a lot of the Lencioni components around our strategic planning, around our, you know, critical issues for the, for the quarter and that sort of thing. Sure.


Amy Morin (20m 54s): So it sounds like if you are gonna run an esop, GGOB would be definitely complementary to E os, right? And which you're gonna create ownership in the rest of the organization or in the organization where you have this employee stock ownership and you've taught people exactly the financial inner workings of the company and how to meet financial targets. I mean, that's invaluable.


David Brown (21m 18s): Sure. Yeah. A lot of ESOPs, I mean, within the GGOB community, there are a lot of ESOPs because there is a natural, but even owners that don't necessarily want to share their equity and struggle with, well, I don't wanna give away equity, but I want people to be motivated to help us grow enterprise value. GGOB can be a way to get everybody rowing in that direction and get rewarded in incremental sense. We're growing enterprise value so that when the owner actually sells the business, obviously there's an exp exponential exit there that they would benefit from that, that employees without equity would not.


So,


Dave Casey (21m 52s): So that comes, kind of goes into how do you introduce an operating system to a company that's not running on anything to start with? And that struggle with this, we also, I belong to a nonprofit that uses EOS. And so we started with the board, you know, we started educating the board on what EOS was, how it worked, you know, the whole structure, the whole thing. Then we kind of moved it out to the committee chairs.


We have probably 10 or 12 committees within the, within the nonprofit. So the committee chairs then were kind of included in, and then it was the third layer, which I don't think we've, we've actually reached yet, is getting every member of the organization familiar with, with what we're doing with EOS and why it's important for them. Now, as a nonprofit, you, you're not really, I mean, you're just asking people to volunteer to do things. You're not really paying anybody, you're not enforcing anything really. But it's, you're encouraging.


And it's a servant leadership nonprofit. So people that join our servant leaders by, by nature, I think, where they don't last very long. And so, but it has been a struggle kind of moving from the board, understanding this is how level 10 is gonna run from our, the way our old board meeting is ran. And then then getting the committee chairs to say, you know, this is the way your committee should run, as opposed to the regular committee meetings that you've been doing for years. So that's taken quite a bit of time.


And I think with, with great game, David, how, how did you guys introduce it to the company? Did it start at the senior management and work its way down, or?


David Brown (23m 34s): Yeah, good question. So one of, there were guess five owners within the business. And one of the owners happened to read the book. And after reading the book, he came to our leadership team and said, I, I think you guys should read the book. We all read the book, and we were equal parts intrigued and skeptical. And it just happened to be, as we were kind of having the conversation, we found out that the great game conference was happening in Dallas within like 60 days. Yeah. So we thought, well, there's no excuse not to go. So three of the five of us went, we attended different sessions and fascinating because by the end of the first day, everybody came together, debriefed what they'd heard.


And we made the decision, we're gonna do this. We're just not sure how, we're not sure when, but it, but it was pretty convincing within an eight hour day that, that we really wanted to, we were excited not just for the benefit to the owners, but if we can teach everybody in our business, I think we probably had 60 employees at the time, consultants, technology consultants, they're good at their technology, they're good at a billable hour, they're good at problem solving, but they don't necessarily understand how a consulting business makes money. Could we supercharge people individually and their career if we help them understand how business works and how companies make money and what happens when you don't make money?


And, and, and that got us excited as well from a people development perspective. So within the great game system, you there, I guess the change management philosophy is there's kind of ownership buy-in, and then you create what's called a design team. And so you get participation from various, all levels of the organization with maybe somebody you know, at, at the very lowest level, like a, like a new employee, somebody in the mid to middle tier, somebody on the executive team, somebody in finance, and you bring that team together and they basically run the game for a period of about six to eight weeks in a microcosm.


And you get those people to help kind of figure it out. But then you also create, you know, you know, kind of evangelist, you know, once they kind of get inside, you know, they meet the wizard, then they get a little bit excited about it so that when you roll it out to the company arch, you can say, Hey, if you have questions, by the way, somebody from your team participated in the design team, ask them, see what their perspective was. And that kind of, and generally you wanna choose your design team from people that are influencers, whether they're negative Nancy's or positive pause, bring 'em all in.


Because if those people get convinced Yeah. Then they'll be the best sellers of, of the system.


Dave Casey (25m 59s): Amy, how have you seen EOS, you know, be engaged by the employees, you know, as opposed to just the senior management?


Amy Morin (26m 6s): Yeah. It starts with the senior management. So when we start an EOS implementation, we work with the executive leadership team first, right? And then that team basically comes to a level of mastery, what I call, and then during the rollout phase of EOS, as we're rolling out the EOS tools and the operating structure and the strategy and the execution plan to the rest of the organization, that's really being done by the leadership team. So various people on the leadership team.


So think about it this way, right? Every single business has at least some sort of visionary and integrator. Sometimes that's one, one seat. And sometimes that's two. And so what I really mean by that is somebody who's leading the organization, right? Super 30,000 foot level, hey, I see the organization going here or doing this, and then you've got the integrator or the person who's running a day-to-day operation, and sometimes that's like a COO or something like that. Then you've always have some sort of sales function or some sort of a marketing function, some sort of an operations function and some sort of a finance function, right?


And those functions are, the heads of those functions would be the people that I would meet with, right? Collectively for a day. And so it's the, the opportunity to train them, because you basically are training the trainers. So you train that leadership team level, and then they end up rolling out EEO s to the rest of the organization with support from an implementer such as me.


Dave Casey (27m 35s): And is it, I imagine, and I've seen it certainly with us and with, I've got several clients that are using EOS, there's varying levels of engagement by the employees. Some of them are like, man, I just wanna do my job. This, this looks like extra work. Or, you know, something. Yeah. They just not aren't getting the big picture maybe. And then even within management teams, I've seen where, you know, some people are really on board, other people are like, oh, I forgot to do that and, you know, I didn't do this this week, or whatever.


So it's, it, there is some, I'd say employee disengagement maybe, or, or a lack of engagement. And so I guess it's really falls on the leadership to cast that vision and just say, you know, here's the reason we're doing this. This is why we think it's positive for everyone, not just for us. You know? Yeah. And for everyone's future, everyone's career, everyone's, you know, day to day.


Amy Morin (28m 34s): So, you know, so that's where leading and managing gets really strong, right? You've got to have a strong leadership and a strong management team in personality and behavior in order to do that. Right? Going back to Lencioni's work.


Dave Casey (28m 49s): Yeah.


Amy Morin (28m 49s): You've got to have strong leaders and strong managers, or nothing happens in an organization. You have no vision, you have no strategy, you have no execution.


Dave Casey (28m 57s): Yep.


Amy Morin (28m 58s): So the, one of the ways the people component is so strong in EOS is because it's really the right people sitting in the right seats that help you get where you wanna go, where you wanna take your company. You know, Jim Collins refers to it as everybody in the boat rowing in the same direction. He is doing a fly fishing resort. Yeah. And So if you are floating down the river and you know you wanna be floating, you want everybody to be floating in the same direction. Right. You don't wanna be like a salmon spawning up the river when everybody's going down Right.


In the boat. And so


Dave Casey (29m 33s): Yeah. Casting will become an issue.


Amy Morin (29m 36s): Exactly. Exactly. So is is it easy to get everyone aligned, David? No. I mean, there are people who do not wanna be held accountable, right? Let's just be honest. If you say the word accountability, people are like two, two camps, right? Yes. I'm, I'm excited that we're finally holding a people accountable. So I'm not the only person actually doing my job in this company. While everybody else is, you know, getting away with stuff, so to speak. Or you have the other camp where people think, there's no way I wanna be held accountable.


I don't wanna know, I don't want people to know what I'm doing. Right? And so, who do you really want in your organization? You know, I wanna,


David Brown (30m 16s): And I would say neither system's gonna work if owners aren't willing to be accountable as well. Right. Totally agree. 'cause sometimes owners want everybody to be accountable, except that. Yep. Yeah. And, and both EOS and great game are gonna require a, a level of accountability at an ownership level. You gotta lean into that because speed of the boss, speed of the crew. If you expect everybody else to run these systems well and you operate outside of them, they won't. Correct.


Amy Morin (30m 42s): Yeah. Yeah. Completely agree.


Dave Casey (30m 44s): So the last area I wanted to touch on was, and we've talked about these kind of, I won't say in generalities, but kind of a big picture, look at 'em, the actual process and documentation on how do you roll this out and what is, what is a daily, weekly, monthly cadence look like? So Amy, I'll start with you with, with, what is it, what's the process of of EOS and, and what is, what, what's kind of documentation backs that up.


Amy Morin (31m 14s): Yeah. So are you asking process of rolling out EEO s to the rest of the organization or


Dave Casey (31m 19s): What's No, once it's up and going. So the, the concept of a level 10 meeting and what that means and, and you know, what rocks are and issues and all that kind of stuff to dos.


Amy Morin (31m 29s): So at, I'm gonna start from the very high level and I'm gonna work my way down if that's okay. Okay. So once the vision is cast, you know, you've answered the questions of what are our core values, what's our core focus? You know, what's our long range target and so on, right? Who are our clients? What's our marketing strategy? Once that whole thing is cast, the next question there is your three year picture, right? So once a year you align as a leadership team and make sure that you're still all seeing the same thing, including what do we need to update on this three year picture from that three year picture?


We now set our one year plan, right? So we know what our company's gonna look like when we have that increase in revenue. When we've tripled revenue in the next three years, we've tripled EBITDA or we, you know, we are tracking profits are, are increasing. We've had this picture of how many people we have and how many offices and so on, right? Then we create our one year plan based on then we create 90 day initiative in the exit planning world. We execute every single 90 days in call.


Those, they're initiative help us get to the one year plan weekly. We check in on how are we tracking against those rocks? How are we tracking against our scorecard, our metrics that are driving to where we wanna go in our, in our scorecard. The thing I think that might separate EOS from any other system out there is that we use a lot of activity based indicators in our, in our scorecard.


So there are some lagging, everybody always wants to know how much cash they have in their account, but it primarily leading indicators, which allows companies to pivot quickly when they're not making them. So for instance, if we've got a revenue of, let's just call it $3 million every single month, and I know that we need X number of sales calls in order to actually drive that from data, from historical data, if we're not making those sales calls, you can bet your bottom dollar. We're not gonna meet that $3 million revenue goal. And so we want to be tracking those sales calls or proposals written or whatever it happens to be, the activities to make sure that we're gonna meet that revenue goal.


So all that gets looked at every single week in that L 10 meeting. And so L 10 meetings, it stands for level 10. So on a scale of one to 10, are we having a meeting that's awesome. Is it informative? Is it deficient? Is it giving us the information we need? And more importantly, is it helping us identify the issues that are holding us back this week? You know, what do we need to solve this week so we can keep executing, right? It's the potholes in the road, so to speak.


We are doing that at the leadership team level, but also at department levels covering the same information. Just not for the same length of time. But more importantly, we wanna be knocking down the obstacles every single week all throughout the organization because who knows what's going on better in the organization, but the frontline, right? Yep.


Dave Casey (34m 42s): And, and something pops up. The frontline knows it first. Yeah.


Amy Morin (34m 45s): Right, right. So that one weekly tool, that L 10 meeting tracks accountability, it gives it, it really enhances communication across the organization. We're troubleshooting by knocking down the issues every single week. We're making sure that we're actually gonna meet our one year, 'cause we're looking at rocks. So it really, in a short period of time, in a short 90 minutes, again, just at that leadership team level, you are getting a lot of information.


Dave Casey (35m 18s): Cool. So David, when you rolled out great game, you described a little bit how it, the tiers of how you, you did it and everything, but what does it look like on a weekly, or daily or weekly ma basis on, in terms of what the process is and, and how is it documented? Sure. So,


David Brown (35m 37s): You know, again, some of the, some of the design elements are you're choosing a critical number. Let's say it's ebitda, you're extrapolating from the budget scoreboard that has kind of your revenue and your expenses and your ebitda. You're designing a gain share, which is the percentage of profit sharing that everybody's going to participate in. Once all the design elements are in play. The, the core is a weekly huddle, and ours was almost exactly 27 minutes. I mean, when you run it for multiple years every week you get really good at it, right?


And, and part of that huddle is the opportunity to share a success story, to highlight an employee, to talk about a, a corporate award, a charitable contribution, whatever that might be. But the core of it is walking through that, that scoreboard, every revenue number is owned by somebody. They're going to communicate the forecast of that number for the month, and it's gonna flow through the next person, to the next person, to the next person. If the forecast from last week changed significantly, then the facilitator's job is to say, why?


Why is the forecast double what it was? Well, good things have happened. Whatever that story is is where people really learn what's happening in the business and how a business makes money. And so you'll walk through all the revenue, all the expenses, you'll update what EBITDA is projected to be, where that would put us on the gain share. Hey, we're at a level six budget would say we should be at a level four, everybody high five, but we've gotta hold it. And oh, by the way, we might be 27,000 hours of EBITDA away from level seven. So what can we do to push to that? And you'll do that every week.


And then on a quarterly basis, that's when, you know, bonuses are paid. They're typically a little bit back in loaded for the year. So you pay 10% after first quarter, 20% after second, 30% after 30, 40% after four, just to make sure, you know, you don't have a really strong first quarter and then, you know, pay too much in bonus. And then they have this concept called mini games. And So if you notice behaviors that need to change in the business, for example, if one aspect of forecasting is consistently wrong, because we don't have the ability to say estimate materials in a construction business or whatever, you might create a mini game.


You design it, it's say a three to five week with a particular team with a particular goal for improving a behavior. You create an incentive, you run that mini game, you try to improve that behavior, and then you move on. And so we would typically have one or two mini games, you know, going every quarter trying to improve a certain behavior in the business. But the huddle and, and the mini games are, are the primary mechanisms to, to play the game.


Dave Casey (38m 8s): And the huddles are, are they departmental? Are they, is there a big huddle for everybody or?


David Brown (38m 14s): Well, like I say this, generally they're, they're company wide. And so when we were running it with 60, 65 people, it was, unless you were with a client, it was 65 people on the huddle for 27 minutes. Now when we were acquired, and the company that acquired us was over 500 employees with multiple business units. So what they did is they had, they played the game in separate business units that rolled up to a corporate game. So three weeks a month they ran a business unit huddle that might have 150 people in it, but once a month it was all 500 people in the corporate huddle for 27 minutes rolling through at a corporate level, revenues, expenses, and ebitda.


Dave Casey (38m 53s): So not everyone would participate in a huddle meeting, then there would be Oh,


David Brown (38m 57s): Oh no, certainly not. Yeah, there's a generally people own the number Yeah. And the facilitator. And then you might have, you know, one or two other people, the CEO may wanna say something. And then you typically, if it's a large group, 500 folks, you might be running a q and a in a chat. If it's a smaller group of 50 people, then somebody could raise their hand on teams and you could call on 'em, they could ask a question. So there's just, you have to manage the audience.


Dave Casey (39m 20s): Yeah. Yeah. So there's a real structure there in terms of you don't have the, the Gabby person dominating the huddle. You know, if


David Brown (39m 28s): You down facilitators need


Dave Casey (39m 30s): How long it last you guys have,


David Brown (39m 31s): They need to be well chosen, they need to be enthusiastic. But a little bit of, you know, OCD


Dave Casey (39m 37s): To the point. Yeah. Yeah. That's fascinating. So what do you think would be, we've talked about exactly how these systems work and, and certainly the spectacular results that can come about as a result of that. And I think your, your, your company, David is a, a great example of that, but the, when we talk to business owners that are unfamiliar with the concept, how do we, how do we convince them that this is worth a look?


And Amy, I guess you do that every day, so


Amy Morin (40m 12s): Yeah, I was gonna, you know, I, I think it costs them nothing to have a 90 minute meeting with an EOS implementer, to be honest with you. Do those for free and so tire kick, right. Talk to an implementer and say, Hey, these are the issues that I'm having in my company. How do you think you can help? How would EEO s help this? Yeah,


Dave Casey (40m 35s): And I think there's, I know great game has a very strong community of companies that are running the game and that they help each other and will help somebody that's looking at it. We'll have a deep discussion with 'em, you know, before and after. Very,


David Brown (40m 51s): It's, yeah, it's a little bit, it's a strong community. And, and so once you be kind of, you know, play the game, you kind of get excited about the idea of others playing the game. So we visited, when we were contemplated playing the game, two or three companies invited us into their huddles, which means they were showing us their entire financials. They didn't care. I mean, at the end of the day, they were willing to show us kind of how it worked. I think going back to your question of if, if, if I'm talking to a business owner today, you know, I'm not trying to prescribe either EOS or GGOB, I just, right. What is your dream?


What are you trying to accomplish? Are you accomplishing it? If not, why not? Where's the pain? Yeah. And if the pain lends itself to either EOS or GGOB solving that, then that's where I take 'em. And if it doesn't, like they may operationally run the business very well. It, it just may not be an immediate need for that business, but I just, yeah. Where are you trying to go and are you getting there? And if not, why not that that's where I start.


Dave Casey (41m 44s): Yeah. And, and it seems like these, these two particular operating systems have longevity that companies that start adopting them will keep them for a period, a long period of time. I, I've got a friend who's been on EOS almost 10 years. Yeah, yeah. And it


Amy Morin (42m 2s): Becomes a culture, Dave. Yep.


Dave Casey (42m 3s): Wouldn't give it


Amy Morin (42m 4s): Up three 10,000 companies running on e os. Wow. I mean, it's proven system that works. Yep.


Dave Casey (42m 10s): And I think maybe that's the, the proof and, you know, to the, to the skeptic or the business owner and said, I'm not sure I want I that this is worth the time and money and energy that, that it looks like it's gonna take to do. I think the results is really what show that.


Amy Morin (42m 24s): Yeah. You know, d David made a similar point earlier that I'm gonna cap capture here again, which is they gotta be willing to change, though. Like, if you think what got you to where you are today is gonna take you to the future and grow your future company, it's probably not. Right. Right. There's that natural evolution and revolution of business that's been written about in several great business books, right? As our business evolves, what got us to where we are isn't gonna take us into the future.


Yeah. So if you are a business owner who is excited about growing your company, creating a saleable asset, creating enterprise value, leaving a legacy, whatever it happens to be, that is your desire for your future and freedom. You know, you have the opportunity to check out something that can help.


Dave Casey (43m 18s): Yeah, yeah, yeah. And even even companies that are wildly successful, I won't say despite themselves, but just because they got in the right place at the right time, and David and I know one that's close to us, that they fell into a construction related business that is just gone nuts. Yeah. And, and they're struggling with how do we, you know, how long can we do this? And, and, you know, it's almost the tiger is, is turning on them, you know, so it's like we're, we're, we're a victim of our success.


We, we got, we, we gotta figure out how to handle this. And I think that a business operating system is certainly a valid way to do that. So it's not always the one that's struggling saying, we're just never getting results. We thought we would. Sometimes it's, we we're very re we're very good, but we realize this is, this is a moment in time. We've gotta figure out how do we make this a permanent thing. Yeah. So very great. Well, super, this I think is a great, hopefully this be this podcast becomes a reference point when we're talking with clients and, and or anybody at Mastery is, is talking with a client that's struggling with, do I, do I do I investigate this and do this?


We're we're blessed that we've got many people within our organization that have a great familiarity with these operating systems, which is, which is very helpful, I think, and, and certainly a resource we can bring to bear. So I wanna thank you both for, for taking the time to do this. This is, this is incredible.


Amy Morin (44m 56s): Oh, you're very welcome.


Dave Casey (44m 57s): Yeah, absolutely. We look forward to our next Mastery Partners podcast, which should be coming up. I think we're gonna be on pretty much our weekly cadence with podcasts now, which is, which is awesome. So I imagine we'll see each other again in podcast land. So


Tom Bronson (45m 13s): Dave, appreciate you.


Dave Casey (45m 15s): All right, man. Thanks guys, and I appreciate you much. Have a great week.


Amy Morin (45m 18s): Yeah, thank you so much, David. It was great. See you Amy.


Dave Casey (45m 21s): Bye-bye.


Tom Bronson (45m 24s): Thanks for joining us for another episode of the Maximize Business Value Podcast. I hope today's conversation sparked new ideas on how you can continue driving value in your business. But remember, it's not just about listening, it's about taking massive action. Visit our website mastery partners.com for more resources. Grab a copy of any of the books in the Maximize Business Value series on Amazon or via the links below.


And don't hesitate to reach out if you want to know how to apply these concepts to your business. So until next time, I'm Tom Bronson reminding you to relentlessly execute while you Maximize Business Value.