7 key lessons from implementing the Entrepreneurial Operating System (EOS)

As Dialogue has grown to surpass $100M in annual recurring revenue, we’ve adopted various tools to build a solid and sustainable infrastructure for the business.  Over time, the management team has learned to drive greater clarity and focus regarding business priorities by navigating key trade-offs and setting fewer priorities.  In essence, the business has significantly matured as it has evolved through the journey of utilizing different managerial methodologies such as: Scaling Up, OKRs and the Entrepreneurial Operating System (EOS).  

When I arrived as a management consultant in September 2020, the organization lacked an overarching operational system and was leveraging Objectives and Key Results (OKRs) to guide quarterly and annual strategic planning.  After leading the corporate strategy process in Q4, I was invited to attend a two day offsite with the C-Suite (Endurance) team to reflect upon 2020 and establish key priorities for 2021.  Although our agenda included several significant topics, we spent 80% of the time engrossed in discussions regarding Q1 2021 and FY 2021 OKRs.  The end result from this exercise was:

• FY 2021: 3 objectives and 18 key results
• Q1 2021: 3 objectives and 16 key results

Given the 34 key results that were being prioritized for both Q1 and 2021, C-suite leaders engaged in various discussions across different functions after the offsite. Members of the Executive Management Team (Directors and above) had numerous debates to negotiate priorities and continually modify the KRs.  In the run up to announcing the OKRs companywide in early 2021, the team was modifying the language of the KRs until minutes before they were announced.  The process consumed significant leadership bandwidth and was broken from end-to-end.  

We struggled with similar challenges for a few more quarters before hiring a fabulous OKR consultant and former Google executive, Magdalena Pire Schmidt , from How-To-OKR, to support us with reimagining our OKR process.  OKRs are a framework that defines and tracks all the objectives associated with a task and their outcomes.  They generally supplement an operating system and serve as a stand-alone goal management strategy.  With Magdalena’s support, we rolled out a four phase approach over the course of a month which involved: (1) preparing for the quarter (2) writing (3) aligning and (4) transitioning.  While our process for delivering OKRs was improving, we were still lacking a holistic approach to guide our core operating system.  

In October 2021, we made a decision to adopt the Entrepreneurial Operating System. Dialogue had previously attempted to implement Scaling Up, a system by Verne Harnish which includes Rocks (priorities) plus critical numbers (both lagging and leading indicators).  These elements make Scaling Up similar to the OKR system.  However, outside of certain rituals, such as a daily morning stand-up, many aspects of Scaling Up failed to take hold at Dialogue.  When we considered implementing EOS, I put forth a business case which outlined several alternative options.  Initially, I was skeptical of the simplicity of EOS and I resisted the change.  As a member of the Endurance leadership team, I felt threatened by an outside consultant supporting the development of our methodology and downtrodden that my own facilitation skills had somehow fallen short.  It was an exceptional and humbling lesson for me.  

In many ways, EOS has been one of the greatest tools that Dialogue has implemented over the past several years.  We have also benefitted from the tremendous tutelage and leadership of our EOS coach, Hugo Boutet . EOS has resulted in a number of benefits such as increased cohesion among our leadership team, a common language across the organization, enhanced operational literacy, a predictable managerial cadence and focus regarding our core priorities.  As the leader tasked with implementing this system at Dialogue, I learned several key lessons which can help similar organizations run up the learning curve to successfully adopt EOS.  A few of my key learnings include:

1. Leverage the “W” process for Rock planning - the “W” can be broken into four steps: context setting, plans, integration and buy-in.

• Context setting: Prior to each quarter, Cherif Habib and I align on a high level strategy for the next quarter as well as the context that we provide to the Executive Management team. We then share this guidance with the team to kickoff the Rock planning process.  
• Plans: Each member of the Executive Management team (VP level leaders) proposes their own Rocks / Goals and plans based upon the context. This is then shared with the leadership team (C-suite) who uses these ideas to shape suggestions for company level Rocks / Goals and plans. We also leverage “One List”, a single source of truth which contains all of the notable opportunities that the organization is pondering. The list is dynamically populated with a unified scoring methodology updated bi-weekly by strategy, tech and product, GTM and operations. The items on this list are used to support development of Rocks, Goals and plans.
• Integration: The leadership team then convenes to develop a plan which integrates the Rocks / Goals and plans into a single quarterly plan for the organization. This is then shared with the Executive Management Team for additional refinement.  
• Buy-In: The EMT leaders then work with the C-suite team to make final tweaks, confirm buy-in and then begin shaping their own functional level Rocks, Goals and plans. This finalized plan is then announced at a company All-Hands meeting at least 1 week before the start of the new quarter.   

1. Map out dependencies to identify bottlenecks and capacity constraints - a visual representation of dependencies can be helpful. This can be a simple diagram showing which tasks depend upon others. This will allow everyone to understand the dependencies and their impact. Prioritizing dependencies based upon impact also helps to focus efforts where they are most needed. We find that most organizational dependencies are related to tech and product and clinical operations, so we invest additional time trying to work through these dependencies each quarter.
2. When setting Rocks, ensure that a definition for successfully achieving each Rock is articulated up front with agreement from all stakeholders - it’s key to set these expectations up front to drive accountability and clarity regarding closure of each Rock.  
3. “Less is more” - while EOS guidance suggests implementing 3-7 Rocks (quarterly) and Goals (annually), we found that 5 is the magic number. Once we adopted this as a leadership team, the rest of the organization followed suit.
4. Repeat things at least 7 times to ensure that they stick - quarterly “State of the Company'' meetings are critical for reinforcing messages, providing examples of how Core Values come to life and emphasizing the strategy. We err towards over communicating and providing transparency regarding our financials, clinical outcomes and key challenges, which creates vulnerability and engenders trust.
5. Pick an off the shelf system to help with implementation and change management - while there are custom built tools to support EOS implementation, we chose to implement Asana due to the prowess of the project management capabilities. By the middle of 2022, the team had completed 23,000 tasks in Asana. Dialogue had the highest adoption of goals of any company in the Asana portfolio with 100% of active users leveraging the goals feature. The system is clearly a catalyst for adoption and standardization of EOS across our business.
6. Build a team of Ambassadors to support change management and to evangelize the program - we were thoughtful about selection, training and recognition in order to ensure that our change agenda was being successfully implemented.

Tools such as OKRs, or systems such as Scaling Up or EOS are designed to help businesses achieve more revenue, growth and profit while delivering a better balance of life to business owners and leaders.  Among the three tools, I have found EOS to be most beneficial for fostering a healthy leadership team, driving simplicity, ensuring scalable management practices and measuring results.  Regardless of the tool, framework or system, its effectiveness will depend upon the commitment of the leadership team and the entire organization to fully embrace and consistently apply the system.