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The Connected Enterprise

PODCAST

Organizational Checkup with Admentus: Identifying Business Challenges and the Technology Cure with Entrepreneurial Operating Systems (EOS)

Posted by Vision33 on Sep 30, 2020 12:00:00 PM

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Full Transcript

Carl Lewis:

Welcome to the Connected Enterprise podcast. I’m Carl Lewis, your host from Vision33, and my guest is Jeff Chastain. Jeff is the founder of Admentus and a practitioner of EOS, the Entrepreneurial Operating System. Jeff, welcome to the podcast.

Jeff Chastain:

It's an honor to be here, Carl.

Carl Lewis:

Please tell us about yourself, your background, Admentus, and especially EOS.

Jeff Chastain:

My background is in technology. I’ve had my own consulting firm for 15 years, but I started as a virtual fractional CTO. As I worked with companies, I kept running into issues. For example, they wanted a new CRM system. But they didn't understand, didn’t have a sales process, and didn’t have workflows figured out. Adding a CRM compounded the problem, and they didn't get value out of it. A colleague introduced me to EOS, and I fell in love with its process/system nature.

Jeff Chastain:

EOS is a set of real-world, practical tools and timeless business concepts designed and aligned to synchronize all business pieces. It's a simplistic, lightweight approach that uses the 80/20 approach that resonates with companies. It lays in the foundation, so when you add technology or other tools, they have a better impact.

Carl Lewis:

Yes. Entrepreneurs may come from sales, accounting, or wherever, but they're not necessarily great managers. They have a good idea, they work hard, they're diligent, and they expect everybody else to be so everything will flow together. But it doesn’t work like that.

Jeff Chastain:

Unfortunately, no.

Jeff Chastain:

I run into many people who’ve gotten to that point. They've had a great idea. They've hopefully found sales and the marketplace that’s going to buy it. They've started a core team. But they can't get beyond that phase. They can't answer, "How do we turn this into a real business? How do we scale?" And they ask, "How can we solve this with technology?" But you need a foundation before you can use technology and productivity tools – otherwise, you're throwing money away.

Carl Lewis:

It seems like many businesses invest in technology but don't get the return they wanted. They never consider they might be the problem. An ex-boss said, "The first thing you have to do to solve a problem is get yourself out of the way." And that's difficult. So, how do you help these guys get out of their own way?

Jeff Chastain:

One of the key processes with EOS is something we call IDS. It’s identifying issues. Because business owners – or really, all of us – try to solve symptoms. Say we have a symptom of sales not producing enough. We ask, “Why is it not producing?” We decide we need a new CRM to make them more productive. But that's not necessarily the root issue. So, we use IDS. It's a simple concept, but it forces the owner or leadership team to dig in, identify the cause, and solve it.

Jeff Chastain:

Maybe we need a sales process so all salespeople have the same messaging and can be more productive at getting the right people, instead of doing their own thing because the organization has no shared core vision. EOS helps align the business. It starts with, "What’s your business vision? Where are you going? How are you getting there? What's your long-term goal?"

Jeff Chastain:

Then we drive that down into the organization with accountability, discipline, and getting everybody on the same page, so they’re working together and pulling in the same direction. Versus tug of war, with everybody pulling opposite directions. You’ll get nowhere. You’ll never get traction. And that's what EOS does.

Carl Lewis:

I've been in meetings where it's the first time the CEO and their leadership team have been together. They're talking about goals, and you realize this is the first time they’ve heard this from each other. And they’re rarely on the same page. Helping them is huge. As a consulting firm, it's easier to work with that company than the one that doesn't know where it's going or how to get there. Do you think an operationally well-run company receives more benefit from technology than one that's not so well run?

Jeff Chastain:

It helps, yes. I always go back to the CRM system example because it's easy. When you choose your CRM and Salesforce or HubSpot (or whatever), and you're trying to set up workflows to say, "We're going from stage A to B to C in our lead funnel." But if you haven’t defined that, you don't know what your lead funnel is.

Jeff Chastain:

Or, if everyone's doing it slightly differently or you can’t identify your process, you're never going to get the benefit out of that system. You don’t have to follow the same funnel as everyone else – you need everyone in your organization to follow the same process for sales, marketing, operations, etc. And when you have those processes working, and everyone understands, adding technology as a productivity enhancement will have so much more benefit.

Carl Lewis:

Yes. Otherwise, you’re trying to apply the tool to a single process, rather than everybody's pet peeve.

Jeff Chastain:

Oh, yeah.

Carl Lewis:

Does something like the pandemic have a greater effect on a poorly organized/structured company?

Jeff Chastain:

It has a significant impact. Often, whether it's the pandemic, something industry-specific, or something else, some companies' high profit margins cover up a lot of stuff. They don't focus on the rough edges because they have so much money coming in. When the profit margins drop, the issues get magnified.

Jeff Chastain:

They say, “We're trying to be more efficient and productive during this pandemic because there’s less profit and fewer customers or we're doing a distributed workforce, etc. And the things that weren’t working well when we were sitting in a good economy are evident when we do things remotely." Things like that. It’s much more evident, whatever the scenario is, with a company that doesn't have its foundation put together right.

Carl Lewis:

It seems like you must be much more purposeful about things because you can't do them in real-time. You can't do what I call ‘management by walking around.’ When I'm trying to resolve anything in my office, I quickly run out of the 12x12 space. Many people are dealing with, "How do I do what I used to do differently and get a better result?"

Jeff Chastain:

Yeah.

Carl Lewis:

I used to work with an entrepreneur who said, "The reason I own my own company is because I'm completely unsuitable to work for anybody else." And he was dead serious. There was just no way. Whether it was their style, morals, processes, or whatever, he preferred his own. He had a different opinion about how everything should be done. Do you find that quality prevalent in entrepreneurial businesses?

Jeff Chastain:

I think that's the definition of an entrepreneur! That's why we got into business – because we know better. We know everything we need to know, and we want to build our own product, service, widget, etc. And taking guidance from someone else grates on our nerves. So yes, I think that's almost the definition of a true visionary, if not an entrepreneur overall.

Carl Lewis:

Once I'd figured out who I was in life, I’ve defined myself as more of a number two than a number one. I'm glad to be the most loyal person on the team and go where you want to go. But I made a few attempts to be an entrepreneur, and that’s not who I am.

Jeff Chastain:

Yes. It’s finding personality and place. At EOS, we make sure you have the right structure for your organization and the right people in each seat. And if you have a visionary also trying to handle daily operations, you end up with the business being the tail of the dog. Every 90 days they're flipping a different direction, dragging your team all over the place. Because that visionary always wants to try new ideas, new dreams, new stuff he heard on the radio or in a seminar.

Jeff Chastain:

And you need a number two to say, "Yes, I can deal with your constant ideas. But I can also keep our organization structured and on track to our vision without getting yanked around everywhere.” Everyone must wear the right hat. That’s what I run into at smaller companies – the visionary is trying to wear all the hats.

Jeff Chastain:

Then they get burned out because, “I have all these ideas and can't handle the meetings or daily stuff, and things used to move fast when I changed my mind, but now we're stuck in the mud." Determining your role and getting you in the right seat is imperative for long-term success.

Carl Lewis:

I would say maybe that fellow needs to start multiple businesses.

Jeff Chastain:

Yeah.

Carl Lewis:

Maybe the visions are so different they can't blend them well. I used to work with a guy who read a book every weekend. At the Monday staff meeting, he’d say, "This is what we're going to do from now on." But next Monday, it would change.

Jeff Chastain:

Oh yes.

Carl Lewis:

When I was one of his number twos – there’s usually more than one, in my experience – he’d say, "Is there anything I can do?" And I’d say, "Yeah, don't do that."

Jeff Chastain:

Good luck with that!

Carl Lewis:

He looked sideways at me, but he took my advice because I said, "Not all of us can handle that." I love that stuff, and my challenge is, "How do I make that happen for him?" But having a new idea every other week is like tipping other people’s tricycles over.

Jeff Chastain:

Definitely.

Carl Lewis:

Jeff, when you work with these companies, what challenges do you face when implementing EOS?

Jeff Chastain:

It’s helping the visionaries understand that ideas are great, but you can’t move forward without a long-term strategic plan. We’re not locked in; we can adjust. If a new market opportunity presents itself, we should jump on it, but you also can't jerk the organization around every other week because no one will be productive. It's getting those people to understand their role.

Jeff Chastain:

Which box do they fit into? What are their roles and responsibilities? Then, help them stay in their lane rather than trying to be everywhere. Especially when you're saying, "We're going to grow on scale" at that early stage in a four- or five-person company. Then explaining we’ll put in accountability, measurables, metrics, etc. so we know if Sally is doing her job because I can see her numbers. If her numbers are green, I don't need to micromanage her. Because if you're micromanaging, you're most likely driving your employees away.

Jeff Chastain:

And if you’re overexpanding yourself, you can’t grow and scale the business. So that's one of the biggest challenges: trying to help people in the early stages understand how to grow into a bigger company. Saying, "You have to let go and trust the process.” One of the biggest limiters to company growth is having the owner or leader unable to step back and take their hands off.

Jeff Chastain:

EOS provides that accountability and those metrics. You can have a dashboard that shows if your sales numbers and manufacturing quality defects are within acceptable ranges. If they are, you don't need to do anything. When you see a problem, discuss it, but don’t micromanage.

Carl Lewis:

One of the hardest things for an entrepreneur is going from that lifestyle business into a real corporate structure to scale. If that's what they want – sometimes business leaders don't want to go there.

Jeff Chastain:

Definitely.

Carl Lewis:

They want to keep it under control and make all the decisions because they don't want it to get too big, whether that's from a fear of eventually not knowing what they’re doing or just not wanting a bigger job.

Jeff Chastain:

If they want to be a smaller boutique firm, more power to them. There's no issue with that. But if they want to grow into corporate … well, not corporate. When you use the word ‘corporate,’ entrepreneurs think ‘big box,’ rigid rules, and no fun. It's not collaborative.

Jeff Chastain:

You can grow. It's counterintuitive, but the more processes and structure you have, the more flexible you can be. Because you're not tracking down the little fires, and no one’s doing things their own way. Say, "This is how we're going to do business. This is how we'll work." And you can inject fun, flexibility, and agility by adding processes and foundation.

Carl Lewis:

Yes. During the pandemic, some companies that were doing well suddenly have four times the orders they had before – but they don't have the structure, supply chain, etc. to meet the need. Do you work with companies trying to figure out how to keep up with their growth?

Jeff Chastain:

That’s any time you have a situation like this, like in 2008 with the recession. Some companies will survive faster, better, stronger if they invest in it. So yes, we have those companies right now that are saying, "How can we get more efficient? How do we get more productive with our limited resources?" If they invest now, they can ramp up to be well-positioned when we come out the other side.

Jeff Chastain:

The situation doesn’t matter if they're asking, "How can we be more productive?"

Carl Lewis:

It could be a learning experience, so they’re prepared next time.

Jeff Chastain:

Exactly.

Carl Lewis:

How do they implement things that can scale without making their employees work double shifts? Do you have an example of a company that benefited from the EOS implementation and training?

Jeff Chastain:

One of the ones I'm working with now. It’s a small staffing agency. They had a stereotypical mindset: “We know we want to grow, but we're working 12, 13, 14 hours a day to keep the wheels rolling. We want to expand, but we don't know how." And they want to do something different technology-wise.

Jeff Chastain:

I said, "You don't know what your structure needs to be. You're worried about hiring people because you don't know they’ll do. It’s because you don't have a defined process. You’ve been flying by the seat of your pants. It’s critical to solve that issue first because hiring right now would be a waste of resources. New employees would flounder and then quit because they don’t want to be involved in a mess.”

Carl Lewis:

I remember starting an implementation project and asking the owner who the members of his leadership team were. He had to think about it!

Jeff Chastain:

That should be a quick answer.

Carl Lewis:

I knew we were in a little trouble. Jeff, how has the current situation affected your communication requirements? You have to be in touch with clients and coworkers. Have you had to change the things you normally use? What do you use instead?

Jeff Chastain:

It's been a dramatic change. As a coach, I normally sit in a room with the company leadership team. We walk them through the EOS journey and implementation process. I'm used to whiteboards on the walls, drawing out plans and accountability charts, etc. That's not happening now, and I'm not sure when it will happen again. It's been a complete shift to take that process online with virtual conferencing software and similar technology.

Jeff Chastain:

I've tried several things I don't understand the value of. Like PowerPoint webinars. Staring at a PowerPoint all day doesn't interest anyone. So, we’ve been playing with new tools/technologies, multiple camera setups, etc. I have a 75-inch touchscreen panel I can use to stream, and we use it like a whiteboard.

Jeff Chastain:

It's about leveraging technology. If we'd gone through this four or five years ago, I don't know how we would have done it. But we can get numerous benefits from these technologies, even if it’s not the same as being face to face.

Carl Lewis:

That sounds clever. I’ve taught classes, and I think, "How would I do that virtually?" I'm used to walking around to see what students are doing.

Jeff Chastain:

Oh yeah.

Carl Lewis:

I think, “What technology will let me do that without getting offline with everybody and online with just one person? How many laptops do I need to work with 12 students?” It’s a challenge.

Jeff Chastain:

I'm on a smaller scale, but I’ve been watching them move school online. There are a lot of resources, new technologies, and new companies pushing stuff that makes it easier. But it's been a learning curve. We've all sat through the webinar that drones on for an hour while staring at somebody's PowerPoint. That's boring. Especially since students are used to games with live action flying around. They're not going stare at a PowerPoint. How do you keep them engaged?

Carl Lewis:

My grandson can pause his game and go back 15 minutes later to pick up where he left off.

Jeff Chastain:

Definitely.

Carl Lewis:

But that doesn't work with humans.

Jeff Chastain:

No.

Carl Lewis:

I try to keep these to 20 or 30 minutes, so Jeff, I appreciate you being here. I enjoyed talking about the people who use technology and their challenges to build a good organization.

Jeff Chastain:

I appreciate it.

Carl Lewis:

Thank you, Jeff, and thank you to everyone else. And until next time, stay connected.

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