Team Health

Most entrepreneurial organizations are born with a passion. When a company is in start-up mode, that passion is oftentimes all it takes to get an idea or a new business moving forward. But then what? How is the business sustained? How does it scale? How does it navigate future uncertainties?

Depending on whose statistics you accept as accurate (I am using numbers from the SBA, Forbes and Bloomberg in this example), between 50% and 60% of new businesses fail within their first 5 years, and around 75% to 80% do not make it to the 10-year mark. A quick internet search for why businesses fail will turn up dozens of different reasons—everything from running out of cash, poor accounting and bad hiring decisions to declining markets, dysfunctional management and many more.

I would argue that each of those reasons—and the many more that are often cited—are actually symptoms of a deeper issue.

For Passion to Survive…

Simon Sinek, I think, says it best in his book Start with Why, when he writes, “For passion to survive, it needs structure.” Think about that combination for a minute. If you can combine a high level of passion with the structure necessary to bring discipline, accountability and focus into the organization, then you have the foundation for a lasting organization.

In 2013, in the middle of building one of my entrepreneurial businesses, I was introduced to what I believe is the most simplified, holistic and effective system on which to operate a business: the Entrepreneurial Operating System® (EOS).

EOS is based on the discovery that, of all the different issues entrepreneurs struggle with week to week and month to month, they are all just symptoms of weakness in one of six key components of businesses.

The Six Key Components of Business

Vision: The first of the six key components is the vision component. In an organization with a strong vision, everyone is crystal clear on where the organization is going and how it is going to get there. This brings great alignment and focus.

People: Jim Collins said it best in his book Good to Great: A company that is filled with great people has focused on getting the right people in the right seats. The right people fit the core values of the organization, and having them in the right seats means they get, want and have the capacity to do the job well.

Data: A business with a strong data component has a strong scorecard: 5 to 15 numbers that are tracked weekly against specific goals that give the leadership team a pulse on the business. They also have great measurables, meaning everybody in the company has a number that defines success for them in their role.

Issues: Simply put, an organization with a strong issues component has mastered the ability to openly call out the true root cause of their issues rather than just dealing superficially with symptoms, solving them so that they go away forever.

Process: When the process component is strong, a business will have defined and documented its core process, creating its own franchise prototype. Having this in place and followed by all means that the business is more consistent and scalable than if clear processes are lacking.

Traction®: The traction component is where the other five are brought down to the ground, and discipline and accountability are created through a regular meeting pulse in which short-term goals are set and reported on and issues are solved, creating weekly action items to get things done.

As the organizations I work with strengthen these six key components of their businesses, they inevitably find that the multitude of issues they were struggling with begin to just fall into place. If you want to experience the same for your organization, consider taking at least one of these next steps.

Next Steps

  • Take a short test to see how your organization is doing. Click here to take a brief organizational check-up that will tell you how you’re doing in these six key components.
  • Learning more. Schedule a call to see if EOS® and SMART-Direction are a good match for your organization.
  • Get a free copy of the ebook Decide! Just fill out the form and write “Decide!” in the message area, and we will email it to you in PDF format.


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