As is widely acknowledged, the functionality and progress of computer software rely on the backing of an operating system. A computer operating system (OS) offers a crucial array of services and features to oversee and regulate hardware resources, streamline software execution, and facilitate user engagement.
Similarly, the functioning of a business requires assistance from a dedicated system. This article aims to present the Entrepreneurial Operating System (EOS) and delve into its six fundamental aspects, shedding light on how it contributes to the efficiency of business operations.
What is the Entrepreneurial Operating System in business?
Entrepreneurial Operating System is a comprehensive set of business management tools and processes designed to help entrepreneurs and business leaders achieve their vision, strengthen their organization, and drive overall success.
The Entrepreneurial Operating System originates from the book Traction: Get a Grip On Your Business written by Gino Wickman. Gino Wickman, an American author and entrepreneur, who took over his family business at 25 and turned around the company that was struggling and in debt. When he was 40, he sold out his company and began working at assist other entrepreneurs to realize their visions. In addition, he also opened a community for entrepreneurs to solve their business problems, and it has successfully helped over 400 companies in the world.
There are 6 key elements mentioned in the book: vision, people, data, issue, process and traction. These points will be futher discussed in the next section.
6 key elements of the Entrepreneurial Operating System
It is crucial to recognize that each of these six key elements is vital for a thriving operational model. These aspects serve as the primary factors that convincingly advocate for entrepreneurs to embrace the Entrepreneurial Operating System. Now, let's delve into a detailed analysis of each of these elements.
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Vision
Ensure complete comprehension within your organization regarding your destination and the roadmap to reach it. The critical inquiry should be whether your business possesses a substantial (or significantly transformative) vision and if your team is in sync with that vision. There is a tool in the Entrepreneurial Operating System to help you clarify the company’s vision.
Vision/Traction Organizer（V/TO）: a one-page document that documents the organization's vision, core values, target market, and ten-year goals. It helps align the leadership team and the entire organization toward a shared vision.
The V/TO model is divided into two parts: The first part is the vision description, including five points: core values, core focus, 10 years of goals, marketing strategy and 3 years of success picture; The second part is traction goals, which include three main points: one year plan, quarterly priorities and a list of issues.
The role of the V/TO model is to give the business a clear direction and action plan, as well as a way to solve the problem. Based on the V/TO model, entrepreneurs only need to focus on the following eight questions when communicating and communicating their vision across the enterprise, including:
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What are the core values of the company?
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What are the core objectives of the company?
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What is the market position of the company?
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What are 10-year goals of the company?
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What is the marketing strategy of the company?
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What is the three-year plan of the company?
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What is one-year plan of the company?
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What are quarterly priorities of the company?
By discussing these issues, companies can formulate a clear, concise, and engaging vision that everyone can understand and support. In order to facilitate your further study and use, I put the canvas of the V/TO model into the manuscript for your reference.
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People
This involves being in the company of exceptional individuals at every level, as realizing an exceptional vision is unattainable without an outstanding team. As a result, it is essential to regularly assess and contemplate whether the individuals in your team are the right fit and whether they occupy suitable positions.
According to Netflix's chief people officer, "90% of management problems can be solved by hiring."
Every position should be filled by the right person, and the right person in the right position can do the most good. How to judge if someone is a good match for a particular job? Here I will introduce you an EOS tool named People Analyzer. It eliminates subjective evaluation of people and show you who is the best fit for the company from multiple dimensions.
People analyzer can be used to assess whether employees in an organization are aligned with the company's core values and job requirements, often judging employee performance based on GWC criteria:
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G : whether employees understand their duties (Get it)
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W : whether the employee likes his job (Want it)
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C : whether the employee is capable of doing his or her job (Capacity to do it)
In essence, the People Analyzer within the EOS framework serves the dual purpose of evaluating employees' alignment with the organization's core values and embodying its culture and philosophy. Additionally, it aids business leaders in discerning the optimal fit for employees within the organization, identifying those deserving of promotions or adjustments, and recognizing individuals who may not align well with the organization.
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Data
This entails removing emotions, individual sentiments, opinions, and egos, simplifying your organization to a few objective metrics that offer a clear indication of the present condition.
As for this point, Wickman suggested to collect enough data. With more evidence, the entreprise will be better to monitor the real-time situation and make the suitable decision accordingly. In the Entrepreneurial Operating System, there is a Scorecard which is a tool for tracking and visualizing key performance indicators (KPIs) that are critical to an organization's success.
Specifically, the data component of EOS includes the following five aspects:
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Data objectives: Define specific, measurable, and achievable data outcomes that the organization wants to achieve, such as increasing revenue, reducing costs, and improving customer satisfaction.
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Data metrics: Select key data points that reflect the progress and results of data goals, such as sales, profit margins, conversion rates, etc.
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Data dashboard: Design a concise, clear, real-time data presentation way, so that the organization's leaders and employees can keep abreast of data status and trends, and find problems and opportunities.
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Data analysis: Use data tools and methods to dig and interpret data in depth, find out the reasons, impacts and predictions behind the data, and provide basis and suggestions for decision-making.
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Data actions: Develop and implement action plans based on the results of data analysis to improve performance, solve problems or seize opportunities, while continuously monitoring and evaluating the effectiveness of actions.
Below is a template of the EOS Scorecard for your reference.
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Issues
"Successful companies solve problems, they don't let them drag on." In the course of business operations, a diverse range of challenges is inevitable. Failure to promptly address and resolve these challenges will lead to their accumulation over time. As an entrepreneur, it's crucial to consistently assess whether you are effectively tackling the challenges your business faces. More importantly, having a systematic approach to problem-solving and improving the organization's operational efficiency is imperative.
The IDS Problem Solving component of EOS is a collection of techniques and tools that assist businesses in recognizing, debating, and resolving a range of business issues in order to increase productivity and effectiveness. One key idea in the EOS issue component is IDS, the acronym stands for identity-discus-solve.
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Process
This represents the key element in your organization. It involves
The author offered the advice on this point to build solution-oriented processes and environments. For this aspect, there is a set of process tools to help entrepreneurs.
3-step process documenter helps organizations systematically document their processes, ensuring clarity, consistency, and the ability to identify areas for optimization. It generally involves the following steps:
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Identification of processes: Understand and identify the key processes within the organization or project. Determine the sequence of steps involved in each process.
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Documentation of processes: Document each identified process with detailed information. Include key steps, inputs, outputs, roles/responsibilities, and any relevant information.
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Review and improvement: Regularly review the documented processes to ensure accuracy and relevance. Seek opportunities for improvement and efficiency in each process.
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Traction
This entails instilling discipline and accountability within the organization, mastering the art of execution, and translating the vision into tangible reality. It requires periodic reflection: are you establishing precise and specific objectives for your team? Are you consistently monitoring and assessing your progress?
This point reqires you to combine the other 5 elements and achieve your goals. It is supported by many tools from the Entrepreneurial Operating System, including Level 10 Meeting™, Quarterly Meeting™, Annual Meeting™, Scorecard.
Level 10 Meeting™
Most individuals would rate their existing meetings around 4 or 5 on a scale of 1 to 10, and sometimes even that rating might be generous. However, in a Level 10 Meeting, participants concentrate on the most crucial topics to identify issues before they escalate into more significant problems. Achieving this level of effectiveness doesn't happen effortlessly, as indicated by the prevalence of unproductive meetings. To reach this level, companies implementing the Entrepreneurial Operating System utilize the standardized L10 agenda.
The L10 agenda is as below.
Reasons to embrace the Entrepreneurial Operating System on business
In conclusion, let me summarize the primary advantages offered by the Entrepreneurial Operating System :
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Enhanced clarity: EOS provides a clear and concise framework that helps businesses articulate their vision and align their team with common objectives.
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Improved traction: The system emphasizes accountability and ensures that everyone in the organization is working towards achieving the company's goals, leading to increased traction and progress.
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Increased team health: By focusing on strengthening the six key components of a business, EOS aims to improve overall team health, fostering a more cohesive and high-performing work environment.
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Effective problem-solving: EOS encourages a systematic approach to identifying and solving issues, making problem-solving an integral part of the organizational culture.
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Facilitated communication: The EOS model includes tools and processes like Level 10 Meetings™ that facilitate open and effective communication, ensuring that everyone is on the same page.
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Streamlined processes: Implementing EOS involves documenting and streamlining core processes, leading to increased efficiency and scalability within the organization.
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Disciplined execution: EOS brings discipline and accountability into the organization, focusing on turning vision into reality through clear goal-setting and regular progress evaluations.
Embracing the Entrepreneurial Operating System can have a transformative impact on businesses, helping them navigate challenges and achieve sustained growth.
Businesses that have applied the Entrepreneurial Operating System process have seen an average increase in operating revenue of 18% per year. The practical principles included in EOS have been tested in various enterprises. So it is a comprehensive, self-sustaining system approach that addresses six aspects of business operations. By mastering the methods of each part of EOS and combining them into an effective architecture, you can accelerate your growth and achieve your company's vision.
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