Today, no leader can afford to be indifferent to the challenge of engaging employees in the work of creating the future. Engagement may have been optional in the past, but it’s pretty much the whole game today. — Gary Hamel
Since 1981, we’ve helped clients create the possibility of engaged employees, empowered managers and brilliant leadership as the path towards building thriving and profitable enterprises. Our clients and we have had successes and we’ve had failures. However, in both scenarios, we have gained invaluable insights from those failures and successes and have refined the 3 defining features and 3 basic capacities for creating and maintaining an enduring engaged, empowered, and thriving enterprise. Insights like these have led to the development of our Enterprise Management System™ (EOS™), a rigorous, track-proven, and yet simple approach to helping any enterprise reach its full potential.
The Big 3 Features:
- Defining & Aligning The Value Cycle: We help our clients illuminate their value cycle, beginning with the CEO, the CFO, the remaining senior team, and then staffers, to produce absolute clarity about their value cycle so they know their system for what it fully is, positioning them to more fully optimize its performance. The Value Cycle is exactly how the enterprise delivers value, from start to finish to start again, that results in a thrilled and loyal customer. Surprisingly, few organizations know in exact detail how they deliver value to their customers. In fact, many company CEOs, CFOs, their executives, and staff have different interpretations of what their company does to create value. Imagine multiple universes within the one and the same enterprise. For us, what you cannot see in its entirety cannot be optimized by improving the parts you do see.
- The Missing Methodology: We’ve solved the Missing Methodology by helping our clients achieve mastery of powerful financial distinctions and methods that enable them to link behavior to financial transactions as a path to achieve true operational excellence. It is a systematic way to connect good business financial planning to consistently excellent performance in daily operating activities. Fewer than 3% of larger enterprises and SMEs in the U.S. have the literacy and mastery over the financial distinctions and methodologies that the most sophisticated investors and banking sources utilize every day to assess performance. In fact, most CEOs and their CFOs don’t have or use the same financial distinctions as each other have in their respective roles and struggle to connect when it’s most needed.
- The Innovation Space: We help our clients with the tools and practices that will engage all members, from executives to staff, into building a meaningful and result-producing enterprise. When values and expectations are clear, there’s transparency of the entire system, and our scoreboard accurately portrays behavior that produces value, and this opens the possibility of creativity and flow. Conversely, when the Value Cycle isn’t clear, and, the financials cannot be linked to actionable behavior, most enterprises manage their performance using key performance indicators (KPIs) that don’t make the ultimate difference to the quality of work and results. When KPIs aren’t real, everyone knows it even though they won’t articulate it, making it difficult to engage managers and staff consistently. Furthermore, groundless KPIs reduce managers to cheerleaders instead of coaches of engaged and committed staff members.
3 Capacities for a Culture of Engagement:
For us, these are the basic foundations to build an engaged, empowered and thriving enterprise. most importantly, in our philosophy, it is a living conversation.
- Transformational, inquiry-based, non-directive leadership – “The Value Cycle is the map but not the territory“ and the leaders recognize this as one of the truths of our system. The map is filled with gaps and left intentionally so, as an authentic invitation for their managers and staff to engage. It is also an acknowledgment by leadership that the wisdom to fill in the gaps and connect the dots that will improve throughput and efficiency, is already contained in the tacit knowledge of line managers and staff derived from their day-in-and-day-out experiences. They are the only ones able to fill in the “territory”. However, here is a critical transformative point: In order to effectively engage staff and managers to authentically tap their tacit knowledge – to consistently draw them out to contribute their tacit knowledge — leaders and managers must transform to an inquiry-based, non-directive leadership paradigm that creates and maintains an inviting, safe space for engagement and contribution. We have been helping our clients’ with our transformational leadership and culture invention programs since 1981 that are founded on the basic principles of inquiry-based leadership and management coaching that leads to authentic engagement and empowerment.
CEO of MACPA, Tom Hood reports: “In the beginning, our team started understanding financial drivers, and linkages of their work to financial outcomes; and with that, they were making decisions a lot better, all the way down to the receptionist. We love the way this has given us complete oversight of our continuous improvement progress, while also increasing the flow of the team’s discovery of invisible organizational knowledge and documenting it, which they provide to us consistently and well presented.”
- A culture of shared distinctions and practices – An enterprise culture that has shared distinctions and practices for executive, manager or staff member alike is surprisingly more effective at communicating objectively and thereby more efficiently. It’s essential for continued engagement and securing trust when all enterprise members share a glossary of distinctions and practices, held in a sacred context by all, and contains the same action potential for all members. We help structure and populate the enterprise’s sacred glossary of shared distinctions and practices that accelerate, and inevitably helps to stabilize, their transformation process.
- Culture as a presence of leadership – In our view, the most powerful organizational cultures that we’ve experienced are enterprises where leadership is distributed throughout the entire enterprise, top to bottom, regardless of rank or seniority. The point is not merely distributing leadership for accountability but that the entire enterprise culture is sensitized and intuiting for the presence of possibility – one of the essential experiences that makes people engage creatively in their work. Too many leadership schools and pundits, while most not intentionally, support the idea that the mastery of creativity is the job of executives and leaders. We don’t agree. We help our clients realize their capacity, whether executives or staff members, for their pattern recognition for possibility when it’s both present and when it’s absent, and help them in cultivating their culture for this essential ingredient of authentic leadership and engagement.
Examples of Client results from implementing our management system:
- Doubled Profits and Cash Reserves – A 700-person manufacturer’s Enterprise Operating System (EOS)™ Impact Teams implemented multiple initiatives, delivering a better than 100% improvement in cash flow from operating activities every year for the next 5 years.
- Funded Growth from Internal Cash Flow – As routinely occurs in an EOS™, a small business association’s staff were guided to discover, and then focus their efforts on, their highest value-creating activities. This (small) business association’s operating cash flow was at a deficit $-245,000 before we began the Upgrade. As a result, they generated almost $1 million in new cash flow from operating activities in less than 12 months and thereafter produced an average positive operating cash flow of $379,000 per year for the next five years.
- Made Cash Flow and Profit Predictable – At an Auto Parts franchise, each of the key players came to see how the company’s success emerges from its activities as a whole system. They acquired new skills that aligned efforts around validated measures of operational and financial performance. Doing so revealed to them multiple disconnects that caused inventory spoilage and high volatility in profits and cash flow. Their EOS™ enabled them to increase their operating cash balance by an average of $500,000/year for the next 5 years.
- Drove Waste Effectively to Zero – At a 100 person manufacturing firm, their EOS™ consistently allowed them to drive better teamwork and product innovation that increased overall cash flow from operating activities bank balance by an average of $560,000 for the next 3 years.
- Operating Activities Got Tied to Financial Results – At a national blood institute, their Upgrade™ created new capacities to a metrics-driven culture that enabled them to deliver many significant impacts. One contribution more than doubled cash each year for 5 years. Also, during the process to install the EOS™, it revealed a standard operating practice of over a decade that could be eliminated, saving over $150,000 in just the first year, with commensurate annual savings thereafter.
- Most Productive Meetings Ever – Every Time – At a retail franchise, the EOS™ tools and practices, including the monthly EOS™ meetings, have been so productive that four years into using their Upgraded system, the Performance Enterprise Group found it even more productive to meet twice monthly, in synch with pay periods, to best align performance Enterprise, incentives, and results.
- Weathered a Massive Industry Downturn – Thanks to a $110 million highway construction firm’s EOS™, and the new tools and practices they integrated into their enterprise, their bank could see exactly what the non-financial staff had planned each month to assure that they would generate cash to honor their loan covenants. Remarkably, the bank continued their financing, even while the enterprise operated at a loss every month for two and a half years. This enabled them to survive a 70% industry downturn.
- Matured Financial Performance – A fair trade and organic clothing manufacturer/importer was able to use new tools and practices installed during their EOS™ to make the transition from planned start-up losses to build a robust international supply chain. They achieved consistent profitability for the 5 years after their EOS™, exceeding their projected profit plan.
The Enterprise Management System™ (EOS) client requirements:
- Companies with a minimum threshold of $20M – $50M annual revenue, and a maximum of $1B annual revenue.
- 100 to 1,500 employees.
- Under certain circumstances, we’re able to serve smaller enterprises. Please contact us directly to discuss your situation.
- A genuine commitment to employee engagement and empowerment, non-directive leadership principles, and continuous improvement and innovation.
If you’re interested in another path to building a culture of engagement, empowerment and thrival, contact us and let’s start the conversation.
EOS Upgrade™ and EOS Upgrade™ are registered trademarks (pending) of our strategic partner, Enterprise Resources (MRx)