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Mar 8, 2024

Leveraging a Business Operating System Throughout Your Organization

Founder's Framework Podcast Copy 100% C7 The benefits of adopting and intentionally running on a BOS (business operating system) are far more powerful the more it is utilized across the organization. It allows for better alignment from top to bottom. Join us as we discuss why it works, what we've learned, and where people often go wrong. The benefits of adopting and intentionally running on a BOS (business operating system) are far more powerful the more it is utilized across the organization. It allows for better alignment from top to bottom. Join us as we discuss why it works, what we've learned, and where people often go wrong. Turn on screen reader support To enable screen reader support, press ⌘+Option+Z To learn about keyboard shortcuts, press ⌘slash

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Mark Abbott (00:00:03 -> 00:10:16)

<silence> Today we're gonna talk about cascading your business operating system down, right? Um, and so, you know, first thing is, I think whenever you're talking about cascading it down, you, you gotta talk about why in the heck people even, uh, enter into upgrading the operating system because it's not an easy thing to do, right? It takes typically, you know, somewhere between 15 and 24 months, and that's a long time for people. Um, everybody loves to just get stuff done quickly, but the reality is, is that, um, it just, it takes time for people to, uh, basically understand the concepts and the tools and the disciplines associated with the system. It takes, uh, time for people to master these concepts and tools and disciplines, because you don't want to teach them to sort of the next level down of the organization until you've got your arms around mastery. And then after that, you know, the next layer masters it and then rolls it down further. So, you know, typically most organizations, especially SMBs, they have department leaders, and then the departments have a bunch of team leaders, and then each of the team leaders has a bunch of individual contributors who report to them. So you got these three layers that you gotta roll the thing down toward. Um, but you know, what people need to recognize is they're, is they're upgrading their operating system because they're frustrated, right? As we've talked about before, um, you know, no one wants to build a company they end up sort of not liking, right? Um, uh, you, you, you know, ultimately what you want to build is a company they just genuinely love. And, uh, and I would love for founders, CEOs to build companies they'd love forever, which just means that they, they really do care about the long-term best interest of the organization, the people, all of the ideal stakeholders, the employees, the, the customers, their vendors, strategic partners, of course the shareholders. Um, and so it's just a, it's, there's a reason they enter into it. They're in entering into the upgrade because they're getting frustrated with things. Because the reality is, is there's a lot of things that happen within a company, right? There's, there's goals and there's recruiting and there's people issues, there's processes, there's metrics you need to measure. And it could be all a bit overwhelming, uh, you know, as Gino Wickman of EOS would say, there are 136 issues, but if you sort of organize things into various competencies, you can make it much simpler. EOS has the six key components, you know, at 90 we talk about the nine core competencies, but, but becoming strong across those things, and so that you can start to minimize the unnecessary people issues. You can really make sure everybody's on the same page with regard to who you are, where you going, what matters, um, and things like that. And so the reality is that whole exercise, that whole effort around upgrading your operating system, it has to start with, first of all, it has to start with the founder slash ceo. They've gotta believe this is a thing that's worth spending a lot of time on with the rest of their senior leadership team. And if they're bought into the need, uh, to upgrade the operating system, and then you get the whole senior leadership team involved. And, and really what they get do in the phase first phase is just get all on the same page in terms of what matters. Uh, like, you know, who are our ideal customers? You know, why do we exist? How do we make the world a better place? We call that the purpose passion, just cause um, you know, what are the core values? What are the behaviors that are really important for us to feel like we're working with people we love working with? And so, um, so you get the sort of what we call the vision stuff, uh, all agreed to. And then you start setting plans, right? So they got the vision, then you got strategy, and then you got tactics. And so vision, um, is vision strategy is plans, right? And then, um, and then ultimately you get to the tactics. So the plans are, you know, where do you want to be in 10 years? Where do you want to be in three years? What's it look like so that you can get everybody excited about the journey from here to there? Where are we gonna be in one short year? And then what are we gonna do the next 90 days to sort of turn our one year plans into reality, turn our three year picture into reality and turn our big hairy, audacious goals 10 years from now into reality? And so you get everybody on the same page in terms of that stuff. Um, and then you also, you know, then start saying, well, how do we make this happen? Getting to tactics, it's, well, we need to have weekly meetings. We need to have quarterly planning sessions, we need to have annual planning sessions. And so you start working on what I call these core concepts, tools, and disciplines, um, at the senior leadership team level. And then at some point, people are gonna be wondering what the heck you're doing. And, um, I think that's partially why they EOS calls a book. What the heck is EOS? They're gonna, like, what are you guys doing? What are you meeting on? What are you talking about? And so, at some point, you have to let the rest of the organization know that you're upgrading your operating system. Some organizations, some leaders are, you know, they'll, they'll go into it thinking, well, I think this makes sense, but they're not a hundred percent committed. So those, you know, guys and gals aren't gonna wanna talk about what's going on yet. They're gonna wanna make sure that they're comfortable with the, with, with the journey they're embarking on. And that's fine, right? My preference is early on, you just let people know you're, you're looking at upgrading your operating system. You're gonna be having meetings all day meetings with your direct reports. Um, you know, you can say, we're looking at this thing called, you know, EOS, the entrepreneurial operating system. Or they're looking at nine DOS, or they're looking at Pinnacle or Empire or one of these other BSS that are out there and, um, scaling up E-Myth, right? There's lots of them. Um, and uh, just say, Hey, we're, we're looking into this because we think it'll help us grow better. We think it'll help us be more focused, um, at all levels. It'll make help us align better. And if we're focused and aligned, then we actually are all doing work that we genuinely enjoy doing. We will all be thriving. And so that's a much better place than we are right now 'cause we're struggling a little bit here and there. And, and so just let people know that's going on. And then once you get through the sort of the first phase, which is agreeing on the vision stuff, agreeing on the plan stuff, agreeing on the structure of the organization, um, uh, and agreeing on sort of the definition of things that are kind of important, like what are the core processes that we as a company need to be really good at. Once you've gone through that phase one, you can then share what you've agreed to with, with, with, uh, with the, with the rest of the organization. That's what I always encourage. Um, and so that's a formal meeting. And you know, you, it's called rolling out. I think ES calls it rolling out as an example. And you share your vision, you share your core values, you share your ideal clients, you share your unique value proposition. So everybody understands sort of what's important in terms of what you're selling to your customers, because you kind of, whatever you tell 'em, you're selling 'em, you kind of wanna deliver on that. And so, so you roll it out and then, um, and then you let 'em know. And then what happens is you start to take some of these concepts and tools and disciplines, like the weekly meeting, the quarterly planning session, the annual planning session, and you roll that down to the next level. So department leaders now will roll that down to their, to their team leaders, uh, within the departments. Um, and that could mean that they all now have a one year plan for a department plus the 90 day rocks. They're all doing weekly meetings, uh, depending upon the nature of the, of the, of the organization. Um, and each of the departments, they may be doing weekly one-on-one meetings. Um, I'm a huge believer in weekly one-on-ones. I like staying connected with my people. And I, and I know our team loves staying connected with their people, our department leaders. Um, so, you know, and, and then you roll down KPIs. And so now you have company scorecards, a department scorecard, um, and then you have a team, uh, uh, you roll down to eventually getting a team scorecard. So there's a, this process of just sort of cascading down the concepts, tools, and disciplines throughout the organization. And, um, and it just takes time. Um, and, you know, one of the questions that people ask me is, well, you know, what happens if you don't roll it down? Well, if you don't roll it down, then all of a sudden, you know, you're speaking one language at the senior leadership level, but people are speaking a different language at the department's levels and, and, and, and different language at the, at the, at the team level. People are, think certain things are more important than other things. And so ultimately, I I, I'm really surprised that most people, and I say this statistically speaking, you know, we know it because of we got 10,000 plus companies running on 90. I'm surprised that most organizations don't cascade the upgrade all the way down. Um, they don't get KPIs all the way down to every single seat. They don't have quarterly conversations taking place with every single person. They don't have weekly meetings taking place with every single, uh, for every single team. And, and the reality is, is that that just makes it more difficult for everybody to feel like they're on the same page back to focus aligned and thriving. Um, so I'm not quite sure why people don't cascade, you know, the BOS upgrade all the way down. Um, you know, I've thought a lot about it. We should probably do some research on it, but I think sometimes people are concerned that it's going to expose some weaknesses. Maybe, um, it could be a process weakness, it could be some people issues. Um, maybe someone doesn't want to talk about the fact that, you know, uh, someone they really, really like is just not competent, or they're, they're not a good core value fit, or they don't, they're really not committed to doing their job particularly well. Um, uh, you know, it's, it, it, I think sometimes it's just, you know, they've done it at their level and it's sort of like, okay, we're done. Rather than, Hey, let's take it to the next level and then take it to the, to the, you know, to all edges of the organization. But, um, it's weird.

Cole Abbott (00:10:16 -> 00:10:30)

Yeah. I mean, definitely some people are resistant to change on that in terms of running things a new way and tracking things. And, you know, some people on a KPI end may feel like that's an invasion of privacy almost on certain things. Yeah, it's

Mark Abbott (00:10:30 -> 00:10:31)

Weird, right? But

Cole Abbott (00:10:31 -> 00:11:08)

It's mostly like a post-rationalization about why they are uncomfortable with something new on that. And like you said, it could be a bunch of different reasons, but, um, you know, it's, it's up to the leaders to sort of figure out exactly what, where the value's coming from in terms of keeping everybody aligned from top to bottom. Because if you start to, you know, isolate your BOS and everything on top end, the further and further you get away from that, the more discontinuity there is. And, and that's just gonna create basically an echo chamber up top and on the bottom with, you know, right. Middle, middle level sort of with different serving as a different

Mark Abbott (00:11:08 -> 00:11:13)

Noise or communication or whatever you want to say, right? Yeah. In terms of that echo chamber. Yeah.

Cole Abbott (00:11:13 -> 00:11:55)

You sort of have like an airlock in the middle of, you know, nothing's really going through there. Yeah. And, uh, obviously I start at the top and we, it gradually grow as, as everyone masters, you know, from the top down to bottom. Yeah. And, uh, once you get everybody in that, that circle of understanding and eventually mastery, that's, that's where you really start to shine, and that's where you get full accountability and, you know, really make everybody strong. Because once you adopt these things, it's great for the whole company, but it is, it is difficult. You are entering into something that's sort of unknown, something that's kind of uncomfortable, and, uh, you just gotta steep, keep with it, get those, you know, get those repetitions in and, and make it work. Yeah.

Mark Abbott (00:11:55 -> 00:13:35)

I, it's interesting if you think about it, I think that like the, the, the scorecard and the KPIs, you know, I hear about this all the time, right? Um, you know, Like you said earlier, you know, KPIs, for some people it feels like, well, why are they, you know, why do I have three to five KPIs and, um, um, you know, don't they trust me to do my job? And, and my perspective is, uh, no, the goal here is to make sure we're all on the same page in terms of like, what's important, right? Whether it's a quality thing or a quantity thing, or it's following a process thinking, you know, about individual contributors, right? At that level, uh, following a process and then, you know, showing up and, and, and doing good work, right? How do, how does, how does, how do we know that that's all going on? Because if we know everything's good and going well, right? There's no need for micromanaging, and no one likes to micromanage, right? Managers don't like to micromanage. Um, you know, team members don't want to be micromanaged. And so it's like, you know, we've talked about before, explicit coherent resin. Let's get explicit about what's really important. Let's talk about the 3, 4, 5, uh, KPIs that matter for your particular seat. Let's agree on targets that help us know whether there's an issue, not targets that are like goal oriented and, and, you know, and like they're hard to reach and they're stretched KPIs or whatever. It's not about, you know, sort of, uh, managing for performance. It's about managing to make sure that everything's okay. And, and, and if there are issues for us to be on the same page, yeah. There's probably an issue going on here, so let's talk about it.

Cole Abbott (00:13:35 -> 00:14:06)

Yeah. And that's indicator, right? Yeah. <laugh>, that's the reason, that's the word we use. Yeah. Uh, because it's just giving us sort of concrete and, uh, consistent insights on certain things and, you know, you could handle those really well and make them really well thought out. Or it's just something that, you know, just lets you know, Hey, this is going on. But, you know, there's different levels to that, but it, it is sort of just the simple way of making sure that everyone's on the same page and speaking the same language. Yeah. 'cause that matters.

Mark Abbott (00:14:06 -> 00:16:25)

Yeah. And then, and then, you know, if you're company head, you, you know, you have, let's say 15 plus or minus KPIs, and if everything's green, right, it's easy, like to go on vacation, it's easy to, to not micromanage. It's easy to let people run and do things their way because, you know, we're all extraordinarily unique. The way I'm gonna wanna solve a problem is gonna be a bit different than the way you're gonna wanna solve a problem. And so don't, don't tell someone how to do their work. Just tell 'em what's, get on same page in terms of what's important, and then let them go do that thing to the best of their ability. And, um, and, you know, ultimately you want that right. Basic approach to getting work done to be throughout the company. And then, you know, if you don't cascade this stuff down, then you know, then you're also, it's weird because, you know, how do you stay connected so that people know that you're there, you're supporting them, you see their performance, you see how they're doing, you can express appreciation for it. Um, and, you know, I, for the life of me, I don't understand how people can't do quarterly conversations, right? And just talk about how we're doing, how am I doing, how are you doing in terms of, you know, exhibiting our core values? How are you doing in terms of your roles and responsibilities, right? Uh, re recognizing the accomplishments you've had over the quarter, talking about the things that you're working on developmentally. And then how am I doing as, you know, as a leader? And, and, and, and how am I doing as, as, as a coach and helping you develop? I mean, to not have those conversations on a quarterly basis seems like, um, it's just weird. I I, I, I don't see how in today's day and age, um, you cannot just check in every quarter and say, how are things are going? And, and, and, and you cannot, and, and you avoid having a conversation around where do you want to be in a year or two years, or three years, or five years, and how can I help you, um, you know, focus a line and, and, and, and, and thrive. And so, um, and you can't do that without cascading, you know, the, the, the system down. And, but, you know, that's me. I've kind of, you know, believe in this thing. So what do you think about all that?

Cole Abbott (00:16:26 -> 00:17:35)

I mean, I think quarterly conversations in, you know, the essence of that is hugely important that you have a regular interval to have those conversations about how I'm feeling, uh, about leadership. I'm feeling as a, you know, an employee and as a person, and sort of asking for constructive feedback and, and on both ends, right? Because 'cause it goes both ways. Yeah. And you as a leader, especially, you don't wanna get in a position where something weird is happening that you're not aware of down below, right? Is that you don't want that to just come up, you know, and just be a, a flood of chaos at the wrong time, right? That, that's just, no one enjoys that. So it's, it's, and, and having it structured in a way where it is, we're gonna have very honest and forward conversation right now. And that's cool. And, you know, you have a whole structure around it so everyone knows exactly what to expect going into it. Right? There's no surprise, there's no gotchas. It's very structured. Everything's there. Yeah. And obviously, in order to do that, it has to be cascaded. So the, the rest of the system has to be in place that, so that you can leverage that ability, which is hugely important. Yeah.

Mark Abbott (00:17:35 -> 00:19:39)

And, and you know, it's interesting too because, you know, when you think about when things get, when things go sideways or worse, right? When, when you sort of run into a, a crisis or, or, you know, uh, just there's a, you know, there's just like a bad moment all of a sudden. It's like, not only do you deal with a bad moment, but a lot of times now, all the other stuff that's boiling down below that no one's been talking about, like bubbles up. And so it's not just the moment you're dealing with now, you're dealing with the moment and all the moments you haven't dealt with. And this is why, you know, um, you know, I, I, I, I, I've, I've said this now since I think 1989, that I think annual reviews are just crazy. Um, because you're gonna wait a whole year to talk about how I did. We're gonna wait a whole year to talk about how we're doing. And the truth is that you won't remember anything from Q1 or Q2 or Q3. And the truth is that, you know, you're probably not even gonna remember a lot of the stuff from the most recent quarter. Right? And so, you know, and, and, and so to tell someone something, you know, a year after or nine months after something happened, and to bring that up and say, well, you know, because of that, and, you know, then you tie in, you know, I'm a huge, like, I'm not a big believer in, in sort of, you know, individual incentive programs, but then to tell someone that, you know, Hey, by the way, you're gonna get a, a crappy bonus or something like that because of something that happened nine months ago. It's just like, really, that's how we do things around here. And then of course, when those conversations are taking place, now we've got unwanted avoidable turnover because people are like, you know, heck with this. Like, I think there's better ways to build and work and be a part of something.

Cole Abbott (00:19:40 -> 00:20:12)

Yeah. So say how, how efficient are you trying to run, run the system and is you need to, you know, it's like our, our brains are up, operate up, updating the framework constantly, right? And it's, so it's, you know, there's obviously a spectrum there, you know, a year that's way too long, right? And then, you know, hopefully have, we have weekly meetings and you can sort of talk through the day-to-day stuff, but you don't need to go into the big picture there. And so, you know, 90 days is, is a decent balance between everything in terms of both your goals and also having those conversations, having those check-ins. Yeah.

Mark Abbott (00:20:12 -> 00:23:30)

And it aligns so well with, because, you know, if you could say, well, because one, one place you could go is not, have not run the company on 90 day, you know, sort of on a 90 day schedule, right? And, and you say, well, you know, we're just doing annual goals, maybe you're not doing any goals. Right? Um, but you know, that seems so, I don't know, you know, 1990s or eighties or seventies or something like that, I don't know. But, you know, I don't know how anybody can create an environment where everybody's marching together, focused, aligned, and thriving without checking in every 90 days, right? Without thinking about how did we just do over the last 90 days versus the goals we set for the 90 days. You know, how are we doing in terms of our KPIs, right? How are we, how are we standing back and saying our, how are our processes, right? Thinking about whether it's the six key components that EOS has or the nine core competencies that 90 OS has, right? Thinking through, alright, so how are we doing across the things that matter? And, um, and, you know, never doing it right is just, is is, I, I don't know how people, I, I just don't know how people could run it doing that once a year. I, it's just so, right. It's just, that's such a long period of time. So I, I don't know how you can't ultimately, if you really want to build a company that you enjoy running as opposed to start to feel like it's taking your life away, um, I don't know how you can march any longer than 90 days at a time, and I don't know how you can not talk about how we just did. Not only at the team level, but at the one-on-one level. So, you know, that's ultimately the power of the system is you cascade it all the way down so that everybody is, everybody has, you know, uh, uh, a 90 day conversation we call quarterly conversations are one-on-one. And they're talking about how things, how things are going and, uh, and they feel like they're making progress and, um, and they feel like they're heard and they feel like the company's being open with them about what's going on and what's important. And, um, anyway, so cascading down is, you know, fundamentally I think getting everybody on the same page in terms of the things that matters, having core concepts that everybody understands, having core tools that everybody's using the same tools, and of course having the core disciplines, weekly meetings, annual meetings, quarterly meetings, quarterly conversations, one-on-ones where appropriate, you know, ultimately other things in process-wise, like onboarding and things like that. Um, and obviously, you know, promotions and things like that. So that's the big idea. It's getting everybody on the same page so that ultimately, you know, the vast majority of everybody says, look, I know what I'm supposed to be focused on. I'm aligned. I'm good. I think the rest of the organization's aligned with what, what I'm doing. And I love this, right? I really genuinely love doing the work I'm doing. If you get that done throughout the company, then, you know, I think founder CEOs will have businesses, companies that they genuinely, you know, love. And I think that's a cool thing to strive for. Yeah.

Cole Abbott (00:23:30 -> 00:23:40)

It's a essential part in playing the long game. It's making sure that, you know, all of that is unified throughout. So yeah.

Mark Abbott (00:23:41 -> 00:23:42)

Anything else we should talk about in cascading?

Cole Abbott (00:23:43 -> 00:23:48)

Uh, I don't know. I think, I think we hit a lot.

Mark Abbott (00:23:48 -> 00:26:04)

Yeah. The, the only thing that we didn't talk about is, um, is, is using a cloud-based, right. Integrated system as opposed to, you know, sort of paper-based. And the, the beauty I think of upgrading your operating system and then doing it, you know, sort of in a cloud-based system is now everything's, you know, everything's very, uh, everything's very explicit. We all know we can go to it, we can see what the core values are, we can see what, uh, roles and responsibilities are the structure, right? We can see the processes, we can see the KPIs, right? We can take a look at how we've been doing in meetings. We have a system for accountability in terms of to-dos. We have a system that makes it easier for us to only meet formally and, and avoid ad hoc meetings, which are a sign of a, a poorly run company. And because that's all in the cloud, right? Everybody has access to it. It's a system of record, it's a system of agreement. And, um, and the tools when they're integrated really, really well, there's no redundancy of, of effort. So, you know, your, your quarterly conversation tool literally pulls information from the accountability chart or the org chart, right? It pulls information, the core values from the, from the, um, uh, from the vision document. It pulls the, to do performance history from the meetings tool. It pulls the rocks, um, from, you know, from the planning tool, the, the goals tool. Um, and then it pulls the best practices that you have around what it means to be a, a great leader at our company or a great coach at our company. And so it just gives you this system, um, for ensuring that everybody's having the same conversations, that the information is there once, um, and you can access it when you need to access it without having multiple, um, you know, the same information in multiple places. 'cause then inevitably you got bad information somewhere. And so, you know, once again, I think everybody should have a BOS, they should upgrade it. Uh, they should cascade it all the way down and then they should take advantage of the technology that exists today. 'cause it makes it, you know, I know you don't like it when I say it, but it makes upgrading the BOS what,

Cole Abbott (00:26:05 -> 00:26:05)

Almost easy,

Mark Abbott (00:26:06 -> 00:26:07)

Almost easy <laugh>.

Cole Abbott (00:26:08 -> 00:26:42)

But I, yeah, I think having the cloud-based system in terms of, or that we talked about earlier in cascading, you have an issue of, right. You wanna basically remove all those barriers. Yeah. Because if you are doing it, you know, paper-based Yeah. Cascading is <laugh> seems very not enjoyable. Yeah. And so being able to, you know, bring people into a system that's already established well thought out and, you know, give them time to explore and sort of figure it out, um, you know, at, at their own pace is huge, right? Because if you don't have that accessibility, it, it, there's just no way that you're gonna

Mark Abbott (00:26:42 -> 00:27:30)

Be able to do that consistently and, and not have that just be someone's job, right. To just cascade it. And the cool thing about a, you know, a system like 90 is not just as, are all the tools and concepts and disciplines there, but all the training around why are core values important, right? Why are goals important? Right? Why are KPIs important? Why are weekly meetings, what's a well run weekly meeting look like? Right? It's just like, if you wanna learn why we do all the things that we we're doing, you can do that on your own. You can obviously ask your team leader, but it just makes the whole learning and, uh, mastery, uh, process so much easier, right? Yeah. As we say, we simplify the hard work of building a great organization.