The other day I came across something amazing. It solved a problem that had thought long and hard about. At the time I spoke to everyone I knew but there was no answer. The problem is over 15 years old now. And only recently have I found a solution for it – EOS. To explain…
High speed company growth
In 1996, I founded and grew Gordano from just me to seven people within a year. It was an amazing time. I took my idea, wrote a prototype in a week and then the first sellable version took another month or so. The first sale was to Falmouth College in the UK (everyone remembers their first sale). Six months after starting I stopped coding the product and was working on the back-end sales systems. I worked hard to support my work colleagues – the Murder Mystery weekend in Exeter is one that went down in company history (but that’s another story).
For my product, NTMail (the name chosen because you only had 8 characters allowed in a filename at that time and the extra two spaces meant we could include a version number), the Value Proposition was simple. Back then, Microsoft had just released Windows NT 3.1 and it didn’t really do Internet. At time Microsoft didn’t think the Internet would take off, it was something that academics used. So, if you wanted to send email on Windows then there was only one solution. Mine.
I ran a community of mail experts (via email of course, this was before Facebook and Google) which was world renowned. Anyone who did anything with email was in my community. Often questions were answered before my team or I could answer them. We knew our stuff: we found memory chip problems and network card failures before our customers did.
The company quickly reached twenty people and hovered around that level reaching 25 at its height. But we couldn’t break through that barrier. Getting beyond 25 just didn’t happen. I had set up a lot of systems and processes as the company grew (we had over 30 modules to train new staff) and the company had a “heart beat” but somehow, we’d reached a “glass ceiling”. Why? What was stopping us growing?
Why did we reach a Glass Ceiling?
The answer, which I knew, was that I had the wrong people with me. I was leading the company pretty much on my own. The board of Directors and Managers were not performing effectively. This is illustrated by the fact that when I sold the company to them, the list of new product ideas was two years long. When I spoke to them two years later I discovered they’d pretty much finished the list. Which is great, but they had added very few original ideas and innovation!
If the managers and directors don’t’ fit, how could I change it? Or was the problem bigger?
On reflection the problem was bigger but, having come across the Entrepreneurial Operating System (EOS), I can explain it very, very simply.
People were in the wrong seats. And that included me!
Moving forward with EOS
To explain. EOS is a series of management models that have been incredibly well packaged and make a coherent system to run a company. I’d discovered many of the tools myself on the way but not taken them to this level. One of the most revealing tools Accountability Chart. This introduces the concept of “seats”. Define the seats that the company needs to work effectively before putting people in them. This overcomes the problem of personal criticism if the current person does not fit the seat. That person can make a decision to step up to the requirements of the seat or do something else.
In fact, large organisations with HR departments are recognising the important of seat first, person second according to Linda Holbeche’s research reported in “Influencing Organizational Effectiveness: A Critical Take on the HR Contribution”, 2017, ISBN 978-0-415-74008-1 : “The common mantra was: ‘business first, people second’. .. .. Alignment with business strategy was considered crucial”. And a small company cannot break through that 20/30 people glass ceiling without this concept.
So, what are the seats?
Broadly there are five important seats within a company:
- Sales/Marketing. The group that is customer facing, understands the customers’ world and how to communicate with them effectively. Salespeople may handle accounts individually and be on the road or office based. Once the customer has agreed to buy the product, they are smoothly handed over to the next role.
- Development/Fulfillment/Operations. This group is the “make-it-so” group for the company. They deliver on the sales and marketing promises for the customers and manage any issues that may arise. This group may include the Research and Development part of the company which is involved in creating new products or new ways to implement old product.
- Finance. Collect the money from happy customers and pay all the suppliers – both of materials and labour. Finance will also predict the future income of the company.
- Integrator. This person is responsible for making the above three roles work together effectively. When there are disagreements it is the integrator who takes input from the team and “make’s it so” for the company. This role is often given the title “Chief Executive Officer”.
- Visionary. The leading light of the company – the torch bearer. The visionary will see how the future is changing by looking outside the company, listening to customers and speaking to the R&D people. Clearly these is a tension between the Visionary and Integrator and I’m not sure what the current parlance is for the “Visionary”, Chairman doesn’t fit.
To be clear; this does not mean that there will always be five seats at the top management level of the company. The roles and responsibilities can split across more seats but above seven seats leads to additional problems. Research has demonstrated that as decision making groups exceed seven they tend to break into sub-groups and become sub-optimal (a subject for a different blog). Once the seats have been defined we can find people to fill them. Of course, only one person can sit in each seat (although a person may sit in more than one seat).
So, I said I’d explain where I was with Gordano.
Using this model, I was holding two roles: Integrator and Visionary. The optimum role for me is Visionary (probably comes from being dyslexic but that’s another story). Of course, I could do the Integrator role (and had been for nine years) but that was not my optimum role. Further, the people I had in the other seats were wrong (every single one of them). I knew everyone was in the wrong seat but lacked the knowledge to be able to articulate it in such a succinct, non-threatening and simple way.
As an Accountability Chart it looks something like this:
Had I come across the EOS Accountability Chart at this point I would have understood how to approach changing the structure of the company in a non-threatening way to those already there. It would have been a win-win for everyone since those currently in the seats would see what is required of them in that role and decide to step up or step away.
The One Thing that everyone knows about growth is that companies need to change when they reach 25 people. The EOS Accountability Chart is one of many powerful tools within EOS which facilitates this change. Call me to discuss how it could help you break the glass ceiling.
In face, the EOS Accountability Chart is just one tool I often use in exploratory meetings with clients so that they can see the power of EOS. You learn more about it from Julia Langkraehr in her article “Your business: Structure First, People Second” and watch a 5 minutes video on YouTube: Developing a Company Accountability Chart.
EOS has another twenty or so tools like this which make a massive impact on businesses to install and implement them. If you want to discover more about the other twenty tools give me a call or drop me an email.
And here’s a brain teaser – what role does Captain Kirk have in Star Trek? What about Scotty the engineer?