• Jonathan Goldhill

EOS’ Traction or Gazelles’ Rockefeller Habits?

“If you want to teach people a new way of thinking, don't bother trying to teach them. Instead, give them a tool, the use of which will lead to new ways of thinking.” - R. Buckminster Fuller

EOS' Traction library and Scaling Up book

Which system is better for me?

Scaling Up and EOS are both operating systems to help entrepreneurs manage their companies’ daily operations better and support their growth.

Entrepreneurs of closely-held companies and owners of family businesses contact me because they are growing and need to manage their growth better. They want to improve their systems and business processes, which oftentimes are poorly defined or missing, improve their leadership and employ better people, drive more profitable sustainable growth and get financial management advice from an advisor with a track record of growing profits in businesses.

Some of these are growth companies; some are fast growth or scaleups. And many of them experience “growing pains.” Inadequate systems challenge those who have already grown a lot recently.

When they contact me it is typically because they are looking for guidance, help or just getting a new lease on life with their business. They come looking for someone to burn off the fog, get them excited again or remove the overwhelm. They may come wanting a system or framework and they leave with a set of tools of new ways of removing obstacles.

Sometimes they are contacting me because they have heard of EOS, Traction OR Gazelles and Scaling Up – both with methodologies/systems to make the growth more manageable. Certainly, it is easier to talk about their true situation if they have read one of these books referenced above, but it's not necessary.

“If you want to teach people a new way of thinking, don't bother trying to teach them. Instead, give them a tool, the use of which will lead to new ways of thinking.” - R. Buckminster Fuller

What is EOS? What is Gazelles’ Scaling Up?

EOS’s Traction and Gazelle’s Scaling Up are both educational and coaching companies systems based on the best practices for managing a growing business with 10-500 or more employees.

Gazelles recently rebranded as Scaling Up, are those fast-growth middle-market companies that create the vast majority of jobs in the U.S. The organization, founded by Verne Harnish, the founder of the global renown Entrepreneurs Organization (EO) and chair for 15 years of EO’s premiere CEO program the “Birthing of Giants” held at MIT. Following the release of his book Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm in 2002, entrepreneurs were asking him how to implement these Rockefeller Habits into their companies.

Verne Harnish and the team at Gazelles wrote the book Scaling Up: Why Some Companies Make It and The Rest Don’t in 2015. This book introduced the Four Decisions™ framework (explained below).

EOS, founded by Gino Wickman, an original member of the Detroit chapter of EO, founded EOS a handful of years later while attending Dan Sullivan’s Strategic Coach program. EOS, an acronym for Entrepreneurial Operating System®, is a model of six critical components in a business that must be managed and strengthened to be great, in any industry regardless of your company’s size.

Gino Wickman wrote Traction: Get a Grip on Your Business in 2007. And has since followed up with several other books: Get a Grip, How to Be a Great Boss, Rocket Fuel, and What the Heck is EOS? There are many commonalities between the two systems. While EOS is a derivative work; it has done a better job of making an operating system that is more accessible to the masses and the employees within companies implementing EOS.

Foundations of Both Systems

The foundations of both systems share similar philosophies and approaches and target entrepreneurs with the same needs. Both certify their coaches in their methodology.

While EOS is more straightforward with its 20 business growth tools, it is robust enough to handle a mid-size, e.g., $50M company, steady growth company, but it firmly believes in staying “purely EOS” and keeps to its 20 tools. EOS consultants are called Implementers and stay rigidly to their growth tools ecosystem. They are a closed-architecture system (e.g., Apple) and do not add tools, thought leaders, or other approaches to their application. But, they have a handful of easy-to-read e-books, books, and pamphlets designed for the leaders and another for the managers only.

Scaling Up is more complex, geared toward the hyper-growth startup, fast-growth small to large middle-market company. It offers a much broader set of tools, is more inclusive of other thought leaders and is an open architecture system (e.g., Google). Verne’s two books are filled with hundreds of case studies and company examples to engage the reader. Its consultants are called Scaling Up Coaches who frequently introduce other thought leaders' materials and content into the consulting engagement. But, this system has no readers digest for the managers like the EOS Traction system has.

EOS Six Components

In the EOS world, there are six components of any business which must be managed and strengthened to survive and thrive. The six key elements are:

Vision. Improving this component means getting everyone in the organization 100% on the same page with where you’re going and how you’re going to get there.

People. Surrounding yourself with great people, top to bottom because you can’t achieve a great vision without a great team.

Data. Cutting through all the feelings, personalities, opinions, and egos and boiling your organization down to a handful of real numbers that give you an absolute pulse on where things are.

With the Vision, People, and Data Components secure, you start to create a lucid, transparent, open and honest organization where everything becomes more visible, and you start to “smoke out all the issues.”

Issues. Strengthening this component means becoming great at solving problems throughout the organization – setting them up, knocking them down, and making them go away forever.

Process. The secret ingredient in your organization processes, which means “systemizing” your business by identifying and documenting the core processes that define the way to run your business. You'll need to get everyone on the same page with what the essential procedural steps are, and then get everyone to follow them to create consistency and scalability in your organization.

Traction®. It is bringing discipline and accountability into the organization – becoming great at execution – taking the vision down to the ground and making it real.

Scaling Up’s Rockefeller Habits and Four Decisions

In the Scaling Up world, there are the four decisions every entrepreneur needs to get right of to scale their business: People, Execution, Strategy, and Cash. Get these decisions right, and you’ll have success.

People Decisions. You know you have people issues when you are not enjoying running your company due to a problem with one or more employees, customers, or suppliers. Getting the right people in the right seats doing the right things right is the first order of business. To have success in this methodology, you must have a strong team that engages in constructive conflict and can say you would enthusiastically rehire them all.

Strategy Decisions. The right strategy is indicated by top-line growth as a marketing strategy is very often the company strategy as well. If you have the right USP (unique selling proposition), competitive advantage, brand promise, or “hedgehog” as Jim Collins called it, then you know you have the right strategy. It's essential that is concisely articulated and understood by everyone in the business. Gazelles 7 Strata of Strategy is their cornerstone tool for identifying and driving the strategy in the market.

Gazelles Scaling Up Tools

Execution Decisions. Execution is about getting three disciplines correct: Priority, Data/Metrics, and Meeting Rhythms. To execute well with a minimum of drama, you need clarity about the goals, measurable data from financials, customers, and employees to evaluate how we’re doing, and a regular rhythm of daily, weekly, monthly, and quarterly meetings to synchronize the team around strategic thinking and execution planning.

Cash Decisions. Understanding that growth companies “suck up cash,” entrepreneurs find ways to accelerate the cash’s movement through a business using their Cash Acceleration Strategies tool. The Power of One tool shows which of the 7 levers (variables) drive most cash flow. Finally, removing the distortions to build a foundation for better growth and wealth through fair market compensation of owners, tax provision set-asides, debt management harvesting profits for dividend and bonus payments, and establishing a core capital target to build a cash bugger.

Choosing between EOS and Gazelles

The advantages of EOS are clear. Their tools are easy to use, simple enough, but not too simple, and their books and publications make it easy to push down into the rank and file of the organization. The disadvantages are that if you use a certified implementor, they are limited to using only EOS tools as that is one of their core values: EOS pure.

The advantages of Gazelles Scaling Up are clear. Their tools are also easy to use and simple enough, but not too simple. Gazelles is a more robust system for the larger, middle-market company. There are many more tools, including those to help with the Cash and Strategy decisions. Scaling Up is an open architecture system meaning Scaling Up Coaches can introduce tools and methodologies from other people. Since it is essentially crowdsourced by the thought leaders inside and outside our community if attribution is given for the intellectual property of the thought leaders, introducing it to clients is encouraged.

My Philosophy and Approach

As a business and executive coach to entrepreneurs and owners, my philosophy is to give clients what they need when they need it. My job is to deliver the best tools from the best system for that client at that time. I have clients who have started with Rockefeller Habits tools and migrated to EOS. And, I have clients who use some tools from each of these systems. And, I have clients who benefit from using other tools from other systems. My role as their coach is to open up possibilities, hold them accountable to their stated goals and deliver an experience and transform their company from what it is when we first met to what they want it to be in the future. The tools are just tools, which change their way of thinking.

Interested in Learning More?

Trying to choose a coach or coaching system that works? Interested in learning more about how our coaching works?

Schedule a call with me here: https://calendly.com/jon-goldhill/intro-call/




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Scaling Up Coach | Coach for Business Growth | Entrepreneurs Looking For Advice