How Advisory Firms Can Leverage EOS To Systematically Manage And Grow Their Firms

Author: Matt Cosgriff, CFP®, CPFA

Guest Post

​Matt Cosgriff leads BerganKDV Wealth Management, an RIA based out of Minneapolis and within BerganKDV Ltd., a Midwest Professional Services firm with offices in Minnesota, Iowa, Missouri, and Nebraska. BerganKDV has used EOS since 2010 and Matt is passionate about sharing EOS best practices. Check out the EOS Advisory Community and Traction Blog, to connect with other firms using EOS and where Matt will share more insights on how you can leverage EOS to take your advisory businesses to the next level.

Why Most Advisors Lose Traction in Pursuing Their Vision as They Grow

Starting out as a solo financial advisor and hanging out one’s proverbial ‘shingle’ is fraught with challenges and adversity.

Initially, there’s the big decision to take that massive leap of faith into entrepreneurialism and business ownership. Then comes the endless grind of trying to find the first client, and then into perpetuity the next (and the next, and the next) client. There are also the compliance challenges, and the hurdles of selecting the initial technology platforms that must be laid as the foundation for the business for years to come. The list of tasks, issues, and hurdles is seemingly endless. The good news, however, amidst all the chaos, is that life is still simple (certainly not easy, but not yet ‘complicated’).

Most advisors start an independent firm because they have a unique vision for how to serve clients, and will do anything (including taking the leap of starting a practice from scratch) to make that vision a successful reality. As a small firm, the vision for the future is clear. It lives in your mind constantly as a motivator for why you took that leap, and the lengths you’ll go to make that vision a reality.

Even with the first few staff members, the operations of the business have not yet been complicated beyond your reach and capacity to touch each aspect of the business. The lines of communication remain direct, and the business remains relatively cohesive given the close proximity everyone remains to the day-to-day processes and the secret sauce that has made the business initially successful.

But as success continues and staff expands, the business inevitably changes. The simple reality that the now “Accidental Business Owner’s” time is finite begins to kick in, as the responsibility of managing staff and upwards of 50-100 households as clients continues to accumulate, on top of all that business-related stuff, and becomes almost unbearable. Suddenly operational balls start to drop as the new support staff doesn’t know to dot the proverbial i’s and cross the proverbial t’s in a certain manner. That sixth sense that you and your first employee had where each of you just ‘knew’ the process suddenly dissipates. Momentum stalls. Traction is lost.

And these challenges extend beyond just start-up advisory firms. In fact, even businesses of 20+ people inevitably hit various growth challenges on the long and winding road to enterprise-hood. The challenges, in the end, for a larger advisory business are not, in fact, all that different from a start-up as each function (e.g., investments, compliance, and operations) will at some point expand beyond the scope of one individual as the organization chart grows; at that point, there is a natural speed bump that occurs where traction is lost. The business begins to lose some efficiency, and the inputs going in don’t quite come out as neatly packed outputs.

Ultimately, the challenge that presents itself both for solo advisory practices looking to scale to the next phase in their growth trajectory, or for the businesses looking to scale into enterprises, is a method for gaining traction. A framework for generating results and momentum is needed. A common language that each employee, and then each employee after them, can speak to drive results. What’s needed as firms scale is a means of professionalizing the business and creating structure around six key aspects of managing any business: vision, people, data, issues, process, and traction.

Enter Gino Wickman’s Traction, and the Entrepreneurial Operating System (EOS).

Understanding the Entrepreneurial Operating System (EOS) Traction System

For the unacquainted, Gino Wickman is the founder of EOS Worldwide and award-winning author of Traction, which has sold over 1 million copies around the world. A serial entrepreneur and author of several other Traction-themed books, Gino has covered the entrepreneurial spectrum from dabbling in real estate to working in a machining business, and has had an impressive career consulting on over hundreds of businesses.

So, what is all the rage about EOS, and what exactly is this framework that has seen over 70,000 companies worldwide adopt it?

EOS is admittedly not anything wildly revolutionary. In fact, much of the framework is straightforward and simple. What’s unique about EOS isn’t its proverbial flashiness, but rather its unique ability to simplify numerous tools and resources into one compelling framework for running your (advisory) business. In fact, EOS’s own website doesn’t even oversell the framework, stating: “You’ll discover simple yet powerful ways to run your company that will give you and your leadership team more focus, more growth, and more enjoyment.”

No matter how big or small your advisory business is or where you sit in an advisory business, EOS can help. At its core, EOS is a business management framework focused on the six key components of any business that must be managed and strengthened to become a truly exceptional business. And while EOS was not specifically designed for advisory firms, its application is perfectly aligned for advisory businesses regardless of where they are in their growth trajectory.

In fact, part of the genius of EOS is that it has not only identified the key areas that must be managed for a business to be successful, regardless of industry, but it has also created a workable framework and the corresponding tools to help in strengthening the business and its six core components. What follows is a crash course in each of the six core components, and practical tips for how to use them in an advisory business in particular.

Traction Business Component #1: Vision

Creating alignment around a common vision as an organization grows is a fundamental challenge for any business, as lack of alignment can mean various individuals within the organization are all running rapidly, in different directions, leading the business to effectively stay put. It is the very antithesis of ‘traction’. And the challenge is not just reserved for firms scaling beyond a visionary founder, but can be found in any firm growing rapidly, bringing on new advisors, expanding into new geographic locations, or adding new business lines (e.g. tax preparation).

EOS leads with an incredibly helpful, yet simple, framework for how to define the first of the six key business components – Vision.

The framework, known in EOS speak as the “Vision/Traction Organizer” or V/TO, is a two-page document that, when used correctly, creates a common powerful resource that can be used to create alignment across the organization.

The key components of the V/TO include:

1. Core Values. The 3-7 guiding principles that are foundational to the DNA of an organization. Once defined, these values should be used in every aspect of hiring, firing, and promoting.
2. Core Focus. An organization must get extremely clear on two things: its ‘Why’ and its ‘What’. In EOS, this amounts to your Core Focus and is broken down into two parts:
   • Our “Purpose/Passion” (e.g., Elevating the Lives of our Clients); and
   • Our “Niche” (e.g., retirees, Bass Fisherman, Millennials).
3. 10-Year Goal. This is the North Star of where the organization aspires to be in 10 years, and it must be crystal clear and concisely written in a manner that excites people throughout the organization.
4. Marketing Strategy. This is made up of four elements designed to focus the organization on who it helps best and how it will differentiate itself. The elements include:
   • • Your Target Market (e.g., dentists between the ages of 30-45 buying into practices);
     • Your Three Uniques (differentiators);
     • Your Proven Process; and
     • Your Guarantee (obviously not “returns”, but what you assure every client will receive by doing business with the firm).
5. 3-Year Picture. This is the first step in translating the macro-level vision (i.e., the 10-Year Goal) down into a ‘picture’ of what the future looks like in the nearer-term, which should be broken down into very concrete measurables (e.g., Net Income of $1,000,000, Revenue/FTE of $300,000) and specific items (e.g., “All staff are working towards or have completed an advanced designation.”).
6. 1-Year Plan. Working backward from the 3-Year Picture, an organization (or a team within one) can then begin to define what critical 3-7 key priorities must be accomplished (e.g., transition to new financial planning software) during the next year to consider it a success, to be on track to accomplish the 3-Year Picture, and to move the needle towards the 10-Year Goal.
7. Quarterly Rocks. Continuing to work backwards from the 1-Year Plan, “Rocks” are simply 90-day “SMART” Goals that are critical to accomplishing the 1-Year Plan, by either moving the needle on key priorities, or eliminating business obstacles and challenges preventing the needle from being moved (see component #6 below for a deeper exploration of one of the most critical aspects of Traction, namely, Rocks).
8. Key Issues. Key issues are all roadblocks, process breakdowns, customer complaints, people challenges, opportunities not yet capitalized on, or anything else standing in the way or creating opportunities for the business to be more successful. Fostering a culture of identifying issues openly and honestly is fundamental to successfully gaining traction with EOS.

Nothing noted above is revolutionary (it’s almost all stuff you’ve likely heard in other business books or presentations), and I’d imagine even Gino Wickman himself would be the first to admit he isn’t reinventing the wheel with any of the above concepts.

However, the value of the V/TO lies in its simplicity and in the framework’s ability, when implemented throughout an organization, to create alignment across departments, geographies, and business lines to keep everyone rowing the boat in the same direction and in a manner that upholds the cultural values of the organization.

Traction Business Component #2: People

There is probably no job that frustrates the proverbial “Accidental Business Owner” more than the responsibility that comes with managing people. And it’s no surprise, as few advisors set sail on their own advisory firm with a desperate craving for getting the business to a point that they must do performance reviews or [insert other uncomfortable things managers must do here]. Instead they set out to help people in a manner that was more aligned or better than the firm they jumped from.

But whether you’re a solopreneur scaling beyond yourself for the first time, or a more established ensemble looking to create a better framework for leading and managing people, the ability to manage and lead people is critical to the sustainability of any successful advisory firm. Thankfully, EOS can help here too and, again, the simplicity is the operating system’s greatest strength.

To simplify the oftentimes complicated process of evaluating people and setting the appropriate ‘bar’ for acceptable performance and alignment with an organization’s Core Values, EOS lays out its “People Analyzer.” The framework gives managers a lens to evaluate employees on two axes:

• Right Person: Does the individual embody the core values of our organization?
• Right Seat: Is the person in the right seat (role)?

Having already defined the Core Values as part of the V/TO development process, the first aspect of the “People Analyzer” is a straightforward evaluation of whether or not an individual exceeds, meets, or is falling short of embodying the core values of an organization using a simple system of plus, plus/minus (neutral), or minus ratings. Each organization will define its bar of what’s acceptable, but as a general rule the expectation is that individuals within an organization should not have any minuses (after all, if you defined a certain set of core values as a critical to your organization, what good are they if you won’t stand up for them!).

The second component of the People Analyzer focuses on uncovering whether an individual is in the Right Seat, by evaluating if an individual “Gets It,” “Wants It,” and has the “Capacity to Do It” or “GWC.”

• Gets It: Do they truly understand what the role requires to be successful?
• Wants It: Do they genuinely want to do the job and be successful at it?
• Capacity to Do It: Do they have the technical knowledge and ability to do the job?

The beauty of the People Analyzer is that it helps to get at the root cause of performance issues. For example, if your Operations Manager embodies every aspect of your organization’s core values but their job performance is not up to par, what do you do? With the People Analyzer, the issue more clearly becomes a GWC issue (the Operations Manager is the Right Person who fits the Core Values, but doesn’t “get it” about what the current role entails), which can lead more quickly to a resolution such as moving the individual to a more appropriate seat, providing the technical training required to solve for a skill gap, or even possibly having a difficult conversation about whether the individual is the right fit for the organization’s needs.

Traction Business Component #3: Data

It’s (hopefully) safe to assume that most advisors reading this have probably never driven their car with their eyes closed. But it’s not challenging to imagine the results that would ensue with no clear sense of direction or visibility. Forced to drive blind ultimately forces drivers to navigate purely on gut feel.

Thankfully, for pedestrians and fellow drivers alike, this is merely a simple thought exercise. However, for many advisors and firm owners, ‘driving’ the business fully or partially blind is an all too familiar reality.

Admittedly, access to quality data is getting better in the advisory industry as integrated systems become increasingly available. But few firms connect the increasingly available data to the critical business objectives defined (e.g., their 1-Year Plan and 3-Year Picture), and even fewer create visibility into this data across the organization with a regular cadence that can make the data truly informative (and most importantly, actionable).

EOS takes a three-step approach to creating more transparency and objectivity into how an organization is running at all levels, so that each employee has a pulse on the organization as a whole, on their particular team/department, and ultimately on how their performance is moving the needle on the firm’s objectives.

1. Scorecard for Leadership Team. EOS recommends that the firm’s leadership develop a “Scorecard” focused on the top 5-15 weekly numbers that give a clear pulse on the overall health of the business. Additionally, it recommends having 13 weeks of historical data to provide leadership teams the ability to spot trends in various key points. For advisory firms, this could include data on the lead pipeline, client asset flows, website analytics, financial results, client satisfaction, employee survey results, operational data, and more.

Tip: We combined a few other scorecard resources into one when developing our scorecard. This included the Balanced Scorecard Framework as well as utilizing The Four Disciplines of Execution in creating a clear connection between leading and lagging data points. When it comes to crafting a useful scorecard there is probably nothing more important than identifying which numbers are leading and lagging. For example, if all your scorecard data are lagging numbers (e.g., financial results) you’ll essentially be creating a ton of visibility… but it’ll only be out the rearview mirror.

2. Scorecard for Department/Team. The next step once a Leadership Scorecard is developed (and the V/TO is built) is to begin to develop scorecards down through the organization to each team and across each functional unit (e.g., operations, investments, etc.) to create accountability for key measurables and focus on what each team controls and can impact for the greater good of the organization.

3. Every Employee Has a Number. Arguably the most important step in the process of refining the “Data” component of your business is ensuring that each employee has a number (or possibly even 2-3) that they are accountable for. For advisors, this could be client retention and new business development. For a trader, this could be trade errors. For operations, this could be the percentage of tasks completed on time and/or tasks overdue. Whatever the metric, is it’s critical that the employee can both impact the number and tie their number to the firm’s overall objectives and vision. For example, if a firm has a focus on exceptionally high client retention, that is not something a trader can directly impact on a daily basis, but minimizing trade errors and ensuring that clients’ portfolios don’t drift outside of the agreed upon allocation bands are things that can indirectly have a huge impact on client retention (and could subsequently make great ‘numbers’ for the trader to own).

Traction Business Component #4: Issues

For any advisory firm to function successfully, it must be able to consistently recognize the issues that are getting in the way of its success or the opportunities that should be capitalized on.

It’s not enough, however, to simply identify the issues. Instead, great organizations proactively seek out the things standing in the way of success, and then they immediately move to discuss the issues openly and candidly before taking action towards solving whatever it might be that’s slowing down or preventing success from occurring.

In the advisory firm context, these issues can be anything from operational failures (e.g., consistent and frequent trade errors, inefficient workflows) to business development challenges (e.g., pipeline growth is inadequate to achieve financial goals for the year).

Ultimately, one of the greatest byproducts of successfully implementing EOS is that it will instill in your organization an ability to identify issues, discuss them candidly and openly, and then resolve them for the greater good of clients and the organization.

The EOS “Solving Track” is a framework for resolving issues – EOS defines an “issue” as any problem, obstacle, barrier, idea, or opportunity – using (again) a simple framework that follows a three-step process known as Identify, Discuss, Solve, or “IDS”:

1. Rarely is the stated issue the real issue. For example, someone might identify “Slowing Revenue Growth” as an issue, but what’s the real issue? Slowing revenue growth is merely a symptom (and certainly a very important one) of an underlying issue and teams that become great at using the EOS Solving Track get really good at objectively unpacking the real issue before proceeding to the next step. In this example, ineffective marketing, a significant drop in the number of client referrals, or maybe the departure of the firm’s rainmaker advisor could all be the true issue that needs to be discussed, and then solved.

2. Once the true issue is identified, and there is alignment amongst the team on what the core issue is, it’s time to move immediately to discussing the issue openly and honestly among the group. This sounds simple enough; however, what happens when the issue is “the investment team consistently makes trade errors” or “the marketing plan is not showing effective results”? For teams to use the Solving Track to “IDS” (a verb) successfully, a deep level of trust must exist to allow for open and honest conversation. If this trust and openness to vulnerability does not yet exist, IDSing issues will be superficial and what you’ll find is that the same issue will continue to come up repeatedly (and traction will not be achieved).

Practical Tip: As you start to implement EOS, pay close attention to how willing your team is to dive headfirst into sensitive issues. If delicate issues arise, and people are unwilling to be open and radically candid, it’s likely that the team doesn’t have the necessary trust built to have open dialogues. If this is the case, check out 5 Dysfunctions of a Team or The Speed of Trust. Also, to be clear, EOS does not advise, nor am I suggesting, that you should recklessly attack people as part of the IDS process or discuss items that are truly meant to be discussed behind closed doors. However, the best teams cut straight to the heart of an issue, while keeping the discussion solely focused on the business issue and with an eye towards the greater good of the organization.

3. Once the open discussion has taken place and everyone has had a chance to provide input, it’s time to move towards solving. In my experience, the “solves” can take a variety of forms depending on the issue, but they often include any of the following:
   1. An immediate decision was made and no further action needed (e.g., all client meetings will now be scheduled with an online scheduler);
   2. A task was assigned with a stated owner and a clear due date (e.g., the procedure manual will be updated as of 3/1/2020 by Bob); or
   3. On occasion, the issue was identified and discussed, but could not be solved at the current moment. In this case, we will either leave it on the “Issues” list to be IDSed at a future date after everyone has had time to consider the issue further, or if the issue is fairly complex, not immediately urgent, and will require a major initiative to truly solve, we will put it on what we call our “Future Rocks” list (e.g., Current CRM is inadequate and will require a change to a new solution) so that someone can resolve it as part of a Rock in the coming quarters (See Traction Section for more details on Rocks below).

Practical Tip: Two common terms in the EOS world are “cascading” and “non-cascading,” which are Traction-speak terms for “share with the group” and “confidential information”, respectively. In the case of larger advisory firms where a decision one group makes is likely to have an impact on other groups, cascading becomes critically important to stay on the same page. If a decision needs to be cascaded – i.e., the decision was made but it needs to ‘cascade’ down to other key people who weren’t in the meeting – it can be effective to assign someone from the group a To-Do to cascade the message out to the broader group in whatever manner is most effective. At BerganKDV, we’ve set up a customized Microsoft SharePoint page (essentially an intranet page which allows us to post company updates, store important documents, etc.) that we run EOS on; in the weekly meeting section, we’ve got an automated email that is sent out when Cascaded decisions are made by any group.

Traction Business Component #5: Processes

Another common challenge of many firms scaling through various stages is that as the number of advisors and other staff increase, it becomes harder and harder to keep a consistent client experience. Founders begin to feel they are losing control of the business they set out to build.

After all, when it was just the founding advisor it was easy to conduct all aspects of the business the ‘right’ way. And the processes for ABC Company were easy to follow when it was just one other advisor, because there was only one person that needed to follow it! However, as firms grow, ensuring key processes are consistently followed by all is critical to delivering a high-quality client experience and for ensuring the scalability of the business. Especially given the fact that 81% of companies across various industries consider customer experience as a competitive differentiator, and that in a study surveying over 1,500 financial advisors and investors, 86% indicated that they believe customer experience is important to attract and retain new clients!

Despite the importance of having the top six to ten Core Processes (e.g., client onboarding process) for any advisory business documented, simplified, and refined, the Process component of EOS is one of the most often overlooked aspects.

The EOS framework for the Process component follows a five-step process designed to create simplified processes, that can be trained and measured to ensure a consistent client experience and scalable business.

1. When creating core processes, simplifying is essential. It’s incredibly easy to want to build a process that accounts for every possible scenario that could arise when onboarding a new client. However, stay focused on distilling down the process to its very essence.
2. Write it Down. Get it documented! If the process is merely in your head, it’s not a process. You can’t align, train, or measure the effectiveness of something that doesn’t exist on paper.
3. As firms grow, this step is arguably the most important and without question the most challenging. Does the meeting confirmation email get sent 24 hours or 48 hours in advance? A simple question, but with a group it can become an endless debate about what’s best. Do not proceed until your team is aligned around the core processes.
4. Once a group is aligned around the core process, training must become an integral tool to ensure that the process is Followed By All (“FBA”). This is especially important when new employees join your firm.
5. Ultimately, any leader must trust their team to follow the process but it’s still important to measure the results to ensure core processes are being “FBA” and also to look for opportunities to enhance core processes.

Traction Business Component #6: Traction

Under EOS, one of the most effective tools for ensuring execution and keeping the organization moving in the direction of its vision is the weekly “Level 10” meeting.

The Level 10 meeting (or “L10” for short) follows a simple agenda on a weekly basis to foster team health (Segue), check-in on the health of the business by reviewing the Scorecard (Data), check-in on progress of 90-day initiatives (Rocks), hold people accountable to weekly To-Dos, and then IDS the issues the business must solve to move forward.

Lastly, at the end of each meeting the leader should recap the updated To-Do list for the week ahead and identify any cascading messages and who will do the cascading. , Each member of the team is also required to rate the meeting on a 1-10 scale, with any scores below 8 requiring brief feedback for the group on how the meeting could have been better.

The L10 framework ensures that meetings are highly productive and focused on solving, decisions get cascaded across the organization, and that there is accountability for executing on important To-Do items.

Practical Tip: For L10s to be truly effective, EOS recommends (and I would strongly agree) that meetings should occur on the same day and time each week to create consistency, start and end on time, and use the exact same agenda format on a weekly basis. Our internal joke about what is a justifiable reason for missing a meeting is death or PTO – these meetings should be sacred territory.

In addition to the weekly L10 meeting to do the week-to-week work in the business, EOS also recommends a “Quarterly Pulse” meeting to ensure there is always time to take a step back and work on the business as well.

The Quarterly Pulse meeting operates like the Level 10 by using a standard agenda that creates consistency. However, the Quarterly Pulse differs from the weekly L10 in that it is designed to be a full-day meeting (preferably off-site away from the whirlwind of emails, client calls, etc.), focused additionally on reviewing the prior quarter’s Rocks to ensure accountability and completion, re-aligning around the V/TO, IDSing larger-scale issues (that couldn’t be solved in the weekly L10), and ultimately aligning around the most critical initiatives that the organization must undertake over the next 90-days (Rocks). For larger organizations, this re-aligning is particularly useful as the V/TO and new Rocks for the leadership levels can be cascaded throughout the organization through quarterly meetings for each group (e.g., compliance, operations, service teams).

The Annual Planning Meeting is a lengthier version of the Quarterly Meeting, with a few added aspects to help reset the 1-Year Picture for the year ahead.  The suggested two-day meeting format includes a thorough review of the past year, a team health exercise called the One Thing (in which each team member receives feedback on their most admirable quality and one area of growth for the coming year), a “Strengths, Weaknesses, Opportunities, and Threats” (or “SWOT”) review, and a complete and detailed review of the V/TO to ensure the company’s Core Values, Core Focus, etc. are still the right direction for the organization.

Practical Tip: Each department/team/function (e.g., advisor team, compliance team) will likely want to have its own V/TO that lays out a vision for what the future of the organization’s compliance function looks like, identifies key Rocks, Issues, etc.; however, each V/TO should have the same Core Values, as these should be consistent across the organization.  

Tracking Traction Progress With Quarterly Rocks

Lastly, an overview of EOS would not be complete without a thorough breakdown of what Rocks are, and how to truly implement them successfully.

As noted above, Rocks are nothing more than your firm’s top priorities for the next 90-days. The term “Rock” actually comes from the Stephen Covey book, First Things First, in which he refers to key priorities as “Rocks” (and the less important, day-to-day responsibilities as the “gravel” that fills in the gaps around the Rocks in the proverbial glass cylinder).

Ultimately, two of the most critical steps to utilizing Rocks successfully is to be extremely diligent in the process of actually setting priorities that make up Rocks, to the point of defining explicitly what ‘done’ looks like, even beyond just writing the Rock as a “SMART” (Specific, Measurable, Achievable, Realistic, and Time-Bound) goal.

For example, “Develop a Procedure Manual by 03/31/2020” is a Rock that’s technically written as a SMART goal; however, in an effort to align around expectations and ultimately to hold each team member accountable for completion of Rocks, we’ve found that discussing and documenting what ‘done’ truly looks like is critical. This avoids getting to 03/31/2020 and having to debate whether the Rock is done, because what done looked like was never defined upfront (e.g., Is it a typed draft of the procedure manual, or a finalized version? Do people need to have been trained on it, or is that next quarter? Was it just the operations procedures or were advisor processes to be included too?).

Once ‘done’ has been finalized and the 90 days have passed, as a final step it’s critical in the Quarterly Pulse to conduct some form of ‘show and tell’ (depending on the Rock) to add a level of accountability and visibility to the progress made on key initiatives.

Notably, EOS sets the expectation that completing 80% of Rocks should be considered success. If the business is completing 100% of ROCKs, you aren’t stretching enough. Though anything less than 80% means the business is not executing well enough (and/or that the business’ leadership needs to better understand its organizational capacity of what can be accomplished in a single quarter).

For those who are curious, advisors can get access to all of the EOS Business Management tools for free by accessing them here. You can also get a free assessment of how your business is doing in each of the six core areas of a business here.

Practical Insights From Applying EOS In Our Own Advisory Firm (And Caveats to Be Aware Of)

In 2010, our firm leadership at BerganKDV (formerly KDV) felt that the organization had hit the proverbial glass ceiling, and something was needed to help take our business to the next level. The Accidental Business Partners had a desire to professionalize the entire organization by better aligning strategy across our core tax business and the relatively young business units within the firm (our wealth management business had roughly $100 million in AUM at the time), while also fostering an environment of greater accountability, increasing role clarity, and enhancing the organizational structure. This desire led us to EOS.

How We Rolled Out And Implemented EOS In Our Advisory Firm

The first step in rolling out EOS is recognizing that something, in fact, needs to change!

That something can vary depending on the size of your organization, but it usually involves hitting one of the five common growth ceilings financial planning firms face, and a feeling that the business is losing traction and no longer making the progress it once did (thus the “Traction” name!). This is where we stood in 2010, when we decided we needed to implement EOS. This decision led us down the path of hiring Mike Peyton, a well-respected EOS Implementor and the current visionary of EOS Worldwide, to begin the arduous process of transforming the entire organization in the ways of EOS.

The process started with an EOS-Implementor-led discovery meeting to get a handle on where our organization stood, and particularly where it was stuck and no longer had traction. From there, it involved getting the partners and other key leaders together to examine every aspect of the organization, and to begin to introduce the EOS concepts to those who would be responsible for knitting it into the fabric of the firm.

This evaluation and EOS introduction process took place over several full-day retreat-style meetings. In between each meeting, we would be tasked with implementing various core components of EOS over the course of the subsequent 30 days or so. As noted above, EOS is not rocket science; however, there is a lot to learn, and while EOS is to a large degree an open-source platform of knowledge and tools, actually implementing all of them (especially for large organizations) can still be quite an undertaking.

Practical Tip: For smaller advisory firms interested in launching EOS in their firm, it’s not necessary to hire an EOS Implementor (although it’s certainly a huge value!). There is an overabundance of EOS resources available for free online, in addition to blogs, videos, and more all designed to help organizations implement EOS in a self-directed manner.

As is generally the case when launching EOS, it took us roughly two years to truly get EOS integrated into the organizational fabric of BerganKDV.

At the outset of launching Traction, we largely did things the old-fashioned way, and used paper EOS agendas for weekly L10s, Quarterly Pulse meetings, and Annual Pulse meetings (oftentimes using an easel for listing out issues at a Quarterly or Annual). However, as we’ve grown and evolved, we’ve graduated to using an internal SharePoint page built for each business unit and/or team across the company (over 500 employees). This process has made the execution of Traction far easier, as it allows people to add issues to the issues list easily, as items pop up throughout the week, by simply visiting the internal Issues page.

Additionally, we built the SharePoint page to track Rocks and To-Do items, and we added a button next to each for ‘DroppDowns’ which is EOS-speak for adding something to the Issues list to be discussed further. For those looking for more of a pre-built solution, EOS has some pre-built technology solutions to aid in the ongoing implementation of EOS, such as Traction Tools and Ninety.

Practical Tip: Despite the effectiveness of using a standard SharePoint as the mechanism for running the weekly L10, I’ve found that when it comes to managing the issues list for a Quarterly or Annual Meeting, the best tool is simply an Excel spreadsheet. Excel is extremely easy to navigate, allows you to seamlessly add notes, and most importantly allows you to sort issues, as well as hide items completed. One exercise we do prior to IDSing in a Quarterly or Annual is to “Keep, Kill, Combine” which simply means go through the list of issues that everyone has added over the past several months (this can also be applied to Rocks) and to decide whether there is alignment around an issue truly distinct from all other issues (otherwise Combine it as appropriate), if it needs to be IDSed (Keep it), or if it’s something that’s no longer an issue that can be removed (Kill it).

The Impact Of EOS In Our Advisory Firm

Ultimately, the biggest change (it’s hard to pick just one thing!) we’ve seen in applying EOS over nearly a decade of use is that there is tremendous consistency in how we operate our business across our organization. This has helped take us from operating as “Accidental Business Partners” and a collection of individual small businesses to an enterprise with a common long-term vision and a consistent organizational operating system.

We no longer have business units or teams that use vastly different strategic frameworks, methods for evaluating people, or languages for how to talk about issues. Instead, everyone across the organization (now 500 employees) understands and uses the V/TO, conducts weekly L10s, develops Rocks they’re accountable for, and benefits from all the other great tools EOS provides.

In addition, we’ve even seen increasing success in utilizing our V/TO in recruiting and hiring. As there is no better way to attract the right people to your organization than to show them exactly what you stand for (Core Values), tell them where you’re going (e.g., 10-Year, 3-Year Picture, 1-Year Plan), and to transparently convey to them what issues are standing in your way so that they can truly evaluate the question, “Is this the right organization for me?”. The V/TO tool has also allowed our team to use the defined Core Values lens to ensure we’re hiring in alignment across our organization with those values.

Practical Tip: Over the last year, we’ve taken the V/TO and recrafted it as an employee development tool which we call the “Personal V/TO”, which mirrors the firmwide/departmentwide V/TOs but is all about the individual employee and what their 3-Year Picture, 1-Year plan, Rocks, and Issues are (e.g., What items stand in the way of their individual success?). In our firm’s 1-Year plan, we aim for 80% of all employees having a personal V/TO in place by year-end and many leaders across the organization have Rocks tied to ensuring that strategic objective happens.

Lastly, and likely most importantly, the greatest value of EOS that we’ve seen in our organization is a willingness to get the hard issues on the table (Identify), to talk about (Discuss) them, and to work towards finding solutions (Solve) to those hard issues for the greater good of the organization and our clients.

When you become clear what you stand for and where you’re going, it becomes increasingly simple to understand how to IDS key challenges. Decisions are ultimately made more quickly and with more clarity of purpose. To be clear and in an effort not to oversell EOS, however, it does not come easy, and we certainly continue to have room to grow, as any success with IDSing requires a deep level of trust to be built across teams and people. If that doesn’t exist, none of the aforementioned success is possible, but if you’re clear about your Core Values and the direction of your business it certainly helps in creating that environment.

Caveats And Limitations Of EOS In Practice Within An Advisory Firm

Lastly, while EOS is a tremendous framework to enhance your advisory business, like virtually anything in life, it is not perfect (nor are we perfect at implementing it). There are certainly practical limitations and other stumbling blocks that do not outweigh the endless benefits of EOS but are, nonetheless, good for advisory firms to be aware of regardless of where they are in their EOS journey.

For example, Rocks are a tremendous tool for generating traction and accountability in your organization. However, for advisors with sizable client and new business development responsibilities whose plates are likely already overflowing, the idea of adding management of a key project or initiative as a responsibility in the upcoming quarter can be daunting. The solve, in this instance, is to ensure that certain individuals don’t take Rocks that will distract from their highest and best use or, at the very least, that they align their Rock(s) with client service or business development responsibilities (e.g. conduct 2 Social Security seminars this quarter for prospective clients).

Another shortcoming with EOS, which is tied directly to its biggest strength – being hyper-focused on internal execution – is that it can fall short when looking externally to evaluate the industry landscape when developing a V/TO. It falls short on strategic planning. Admittedly in Traction, it does touch briefly on conducting a SWOT analysis as part of the Annual Meeting; however, amidst the rapidly changing advice industry, it’s arguably insufficient (especially for larger firms). To supplement this shortcoming, we incorporated Harvard Business Review’s “The Playing to Win Strategy Toolkit” and Michael Porter’s Five Forces to help better develop our strategic plan within the context of the broader advice industry landscape, and incorporated those findings and the strategy into our V/TO.

Ultimately, for advisory firms of all sizes, whether they be the proverbial “Accidental Business Owner” just trying to build a framework for running their business beyond employee number two or a firm with hundreds of employees, EOS can be a powerful framework to run your business on.

As noted above, the greatness of EOS does not stem from its novelty or flashiness, but from its ability to pull together basic and timeless principles for effectively running a business of any size and packaging them into a simple framework that can serve as a powerful operating system capable of taking your (advisory) business to the next level.