Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
but on a daily basis we didn’t know if we were winning or losing,” says Darrin Carlson, the owner and Integrator of local metal casting company Prospect Foundry. “We were exceedingly busy, but all our activity didn’t necessarily move us toward a common goal.”
If your company suffers from the curse of getting many things “mostly” done, that just makes you normal. Without a system and structure in place to explicitly combat that behavior, the vast majority of people – and consequently the vast majority of companies – operate exactly this way.
The Entrepreneurial Operating System (EOS) is a system many Twin Cities companies are using, and in part one of this series, in the February/March issue of Upsize, I outlined the Vision component. This article addresses the Traction component.
The EOS practice of setting Rocks is designed to combat this natural human tendency. In doing so, a leadership team is forced to narrow the list of “nice to have” initiatives down to the handful that are truly critical.
“As an owner, I always think I’m a good communicator, but in reality I’m just not. I internalize a lot of things and don’t always share as much as I should,” Carlson says.
“The process of setting Rocks is a good opportunity for me to have the right conversations with my leadership team about priorities. If EOS didn’t force us to have these debates, those very necessary conversations probably wouldn’t happen.”
If you downloaded the Vision/Traction Organizer (V/TO) referenced in the previous article (you can find it at www.eosworldwide.com/vto), you’ll notice that the seventh of the eight sections is Rocks. You’ll also notice that it allows for a maximum of seven Rocks to fit in the template.
Each quarter, your company should be focused on a handful of priorities – three to seven, to be exact, and hopefully closer to three – because in EOS less is always more. So how do you come up with these small handful of critical priorities? It’s simple, but it’s not easy. Here’s what you do.
First, each of your leaders creates a list of everything that needs to get done in the next 90 days (you can do this yourself if your company is too small to have any other leaders). Take each of these items and list them on a whiteboard.
Second, go through an exercise we call keep, kill or combine. Starting at the top of the list, evaluate each item to see whether or not it is a candidate for inclusion in the list of the top three to seven critical items that will become your Rocks.
If it is a candidate, circle it to “keep” it. If it is not, cross it out to “kill” it. If it is inherently connected to another item on the list, “combine” it by connecting those to items with an arrow. Err on the side of keeping; if anyone thinks it should be kept, keep it.
Third, start at the top and do keep, kill or combine again. This second round is where the debates start. These debates are much easier if you already have a V/TO, because then your leadership team has a common vision. However, even if you have not created your V/TO, the debate is still very beneficial.
Do as many cycles of keep, kill or combine as necessary to reduce your list to three to seven items. Now decide and list which person on your leadership team is the best person to own each of these items. The final list becomes your Company Rocks.
Fourth, each person creates his or her own Individual Rocks – the top three to seven things that they must execute this quarter to keep the company on track. If that leader owns one or more Company Rocks, they go first on his or her list before additional Individual Rocks are added.
Two warnings:
First, if you’re normal, you’ll overestimate what you as a company can get done in 90 days. Remember that your “day job” typically takes at least 75 percent of your time, so try to be realistic.
Second, be aware that setting and executing Rocks will expose both departments and people who aren’t pulling their weight.
That being said, the benefits of setting and focusing on Rocks greatly outweigh the standard methods of execution that most companies attempt. Carlson says, “The Rocks process builds trust and confidence in the organization, even if you don’t do it perfectly.
Employees don’t expect perfection, and even if they don’t like the company’s current situation, Rocks help them understand what is being done to move the company forward.
“Everything is exposed, everything is coming out, and there’s nowhere to hide,” he adds. “Your best people will love it, and your worst people will quickly stand out.”
Now that your V/TO is complete, you’ve shared it with your employees, and you’ve established your Company Rocks and Individual Rocks to focus your efforts, how do you ensure your team is holding one another accountable to executing those Rocks?
The Healthy component of EOS is all about creating functional and cohesive teams that excel at supporting one another and holding each other accountable. The tool we’ll be focusing on for this component is the Level 10 Meeting, which will be covered in the next edition of Upsize.
