Operating System

Written by Tyler Kastelberg

August 7, 2022

Happy Sunday!

This week’s newsletter is dedicated to business operating systems. WTF is a business operating system and why should CRE leaders care? … we’ll get there.

Grab a seat, kick your feet up, and let’s start working on your business.

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WTF is a business operating system?

Earlier this year, I was struggling to get all of our team members on the same page, and it was negatively impacting growth. One of my LinkedIn connections introduced me to the concept of using a business operating system – a leadership and operating model that you can implement in your business with the goal of growth.

The operating system to which I was introduced is called the Entrepreneurial Operating System (“EOS”). It might sound cheesy, but it worked wonders in our business, enabling us to grow more than 165% in the first half of this year. 

However, EOS isn’t the only popular operating system.  Scaling Up and OKR are other popular systems used by leaders to grow efficiently.

11of11 has a great blog article that I’ve summarized below that compares and contrasts the above operating systems … but, why should you care? 

Commercial real estate is a very deal-driven business. When you sit down with an investor or broker, they’ll likely chronicle their deals like old war stories. However, the best real estate leaders love both chasing deals and building strong businesses – the kind that can live long after they are no longer around. Business operating systems can help you build such a business.

EOS

Origin: EOS was introduced by Gino Wickman in his book, Traction: Get a Grip on Your Business. He is also the founder of EOS Worldwide.

In A Nutshell: EOS, which stands for “Entrepreneurial Operating System,” is a strategy for a company to strengthen the six key elements of any organization known as the EOS Model: Vision, People, Data, Issues, Processes, and Traction.

Key Advantages: According to EOS Worldwide, “By mastering this simple way of operating, leadership teams of growth-oriented companies systematically and permanently improve.” The EOS Process boosts each key element of your business and incorporates the EOS Toolbox to manage them efficiently and effectively, with the end goal of scaling your business for growth.

Tyler’s note: EOS is more popular in small businesses with under $10M in revenue.

Scaling Up

Origin: Scaling Up was explained by Verne Harnish in his book, Scaling Up: How a Few Companies Make It…and Why the Rest Don’t.

In A Nutshell: Verne Harnish also authored Mastering the Rockefeller Habits, which is the core curriculum for the Entrepreneurial Master’s Program (EMP) at Massachusetts Institute of Technology (MIT). Scaling Up is often referred to as Rockefeller Habits 2.0 and was formally called Gazelles. The model compels organizations to strengthen four main areas of their business: People, Strategy, Execution, and Cash.

Key Advantages: Scaling Up offers companies tools that help executives free their time to focus on growing their business as employees align to execute the growth plan. Coaching helps implementation, learning makes worldwide resources available, Scaling Up Scoreboard software keeps tabs on alignment and accountability, and summit events give companies insight and inspiration.

How are EOS and Scaling Up Different?

While EOS and Scaling Up share common principles to help you achieve your goals, they differ in the following ways.

  • EOS considers itself an “operating system” while Scaling Up considers itself a “performance platform.” It may be a matter of semantics.
  • The original inspirations for each system are different. The book Traction is based on the ideas of Gino Wickman alone and his best practices for business growth. The book Scaling Up is based on the ideas of 40 thought leaders and their best practices for business growth.

Tyler’s note: Scaling Up is more popular in mid to large businesses, with more than $10M in revenue.

OKRs

Origin: OKRs was introduced by Andrew S. Grove in his book High Output Management and was recently popularized by John Doerr in his book Measure What Matters.

In A Nutshell: OKR stands for Objectives and Key Results. OKRs are the simplest and most flexible operating framework. They address what a company wants to achieve by defining how to achieve it with quantitative targets to render specific, measurable results called Key Performance Indicators (KPIs).

Key Advantages: OKRs focus exclusively on execution and have been widely adopted and referenced. You can easily incorporate OKRs into other business operating systems.

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