Stephanie Tsatsos - The Value of an Operating System - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with Stephanie Tsatsos of Rapid RevOps. You can read the interview below or listen to the podcast.

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Heidi J. Ellsworth: Hello and welcome to another Roofing Road Trips from RoofersCoffeeShop. My name is Heidi Ellsworth and we are here today to talk about what every business needs, and that is a really good operating system. Processes, great culture, all those kinds of things that make a business the best it can be. So I am so excited to have Stephanie Tsatsos here to talk about EOS, and really just overall why every company needs a great operating system. So Stephanie, welcome to the show.

Stephanie Tsatsos: Oh, Heidi, thank you for inviting me. I'm super pumped to be here to talk about all things operating systems.

Heidi J. Ellsworth: I love it. I love it. We are an EOS company. You have been helping us. It has just been so great, and it just changes your world, really, as it kind of comes in process. But before we dive into that, why don't you go ahead and introduce yourself and tell us a little bit about your company.

Stephanie Tsatsos: Yeah, thank you. So great to be here. I am just really, really happy to have the opportunity to share EOS and what I do and introduce myself. So Stephanie Tsatsos, as you mentioned, I started a company called Rapid RevOps last year to start bringing EOS to more companies in the Bay Area and the West Coast. And so I operate under Rapid RevOps, and as you said, EOS is a really, really awesome, powerful, simple way of helping any company, any size, any industry get traction in their business. It is very much what you just shared, yep.

Heidi J. Ellsworth: Exactly. Okay. So as we get into this, first of all, let's say, what does EOS stand for and what is it?

Stephanie Tsatsos: Yeah. So EOS stands for Entrepreneur Operating System. And it's funny, because when I share that with people, people think, "Oh, EOS, is that a technology?" It's not. It's a way of really harmonizing and orchestrating the human energy in your company to get stuff done, to get more done. So really, it's about working with leadership teams, getting really clear on their vision, building traction across the leadership team and company and really building a really healthy place for the leadership team and company where everyone is working cohesively, in an open and honest way. So not a technology, but a way of operating to get more done in the business.

Heidi J. Ellsworth: And just share a little bit about how it started. The book Traction, and just where a lot of this came from.

Stephanie Tsatsos: Yeah, so Gino Wickman is the founder of EOS and I think it's been at least over 20 years since we have been around. And he, like many coaches, was a lifelong entrepreneur and observed a lot and sort of had his aha moment when he realized in helping companies, that really all companies are really struggling with 136 issues that are symptoms of really six areas of their business. And he discovered, really if you can get really strong in these six areas of your business, what we call six key components, everything starts to just fall into place. And so it was through that discovery that he, along with some tools and teachings from other coaches and learnings like Patrick Lencioni and Jim Collins and others, cobbled together EOS. And so we've been around for a long time, and it's a proven system that works. I think there are almost over 200,000 companies that run their business on EOS today.

Heidi J. Ellsworth: Wow.

Stephanie Tsatsos: Getting traction. So yeah, it is a proven system and there are probably like 800 or so of us implementers like myself out there helping companies get traction implementing. So really proud of what I do.

Heidi J. Ellsworth: That is so cool. So when we're talking about an operating system and the six key components, there are other operating systems out there besides EOS. So just kind of on the bigger picture, Stephanie, why is it important for businesses to really take the time to determine what operating system works for them and why they should do it for their business?

Stephanie Tsatsos: Yeah, that's a great question. I think there are a lot of companies out there that are succeeding without an operating system, sort of succeeding in spite of themselves. And when they get introduced to this concept of an operating system, there's this aha moment like, "Oh wow, I wish I had that years ago." "Gosh, I really needed a way to help me with my tough people issues that I've been straddled with for years." Or, "Gosh, I know I should be documenting my core processes, but I just don't have the bandwidth." So there's kind of that camp of people that have been around for a long time, and this light bulb goes off when they get introduced to this concept of an operating system. And then there are others that are out there that are implementing like yourself. You had got introduced to EOS, you probably read Traction like a lot of companies get introduced by reading that book, right?

Heidi J. Ellsworth: Yeah, exactly.

Stephanie Tsatsos: And start implementing some of the tools like running level tens, or using the Vision Traction Organizer to get really clear on where you're headed and then maybe get introduced to the concept of working with an implementer to really maximize everything that you can really take advantage of within the tools.

Heidi J. Ellsworth: We didn't even know we needed it. And I actually learned about this from roofing contractors and roofing companies out there who were implementing this, and I was thinking, "Well, if this is working so good for them, I would think it would work great for us too." And so like you said, we self-implemented at first, which was kind of, for us, a good way to get into it and figure it out. But then getting someone to help, I think, is with what you've brought to us, has been so amazing. And when you really look at it, I think when I look at the difference between before and after, I can see it. I can see it so clearly, the success and the growth. What happens when companies don't have operating systems or don't make that leap to it? What are some of the things you've seen?

Stephanie Tsatsos: Yeah. Well, the biggest thing is business performance starts to suffer. So I learned in this process of really absorbing all things EOS is that all companies have a very similar trajectory. So you start your company, you have some early successes, you start to grow, there's this period of growth and evolution and then there's this... you hit a ceiling in your business and there's this revolution. And this discovery also is that really all companies kind of go through this maturity or growth phase. And so EOS is really helpful in helping leaders and companies when they hit the ceiling, because it happens again and again and you're nodding your head because you've been there before, with the tools to really help break through, which is all about bringing things back to a simple state. And getting really clear on taking a step back on where we're going, and how we're going to get there with the right people in the right seats. And so, yep, it's all about that.

Heidi J. Ellsworth: I find that, it's so true, because I look back even on turnover, on having the right people and even now being able to really look at that and build our culture around that so that we don't have turnover and we have the right people in the right seats, where if we don't, we're able to look at it and try to start moving or doing different things. So when companies do not have an operating system of any type, talk to me a little bit about what they start seeing financially with staffing, customer service...

Stephanie Tsatsos: I'll give you a perfect example of what I'm seeing that might be a little more relevant in the space of your members and community, like interest rates, there's a ton of uncertainty around what's happening there and that's impacted a lot of people in the space. In the services and trade space. There's a lot of uncertainty, deals are stalled, projects are... A lot of uncertainty, but there's a lot of stuff you can't control, but there are things you can control in your business. And so when a company is not running on an operating system, profitability eventually can start to slip. And I say that because if there aren't clear core processes in place when times get tough or uncertain, that's where you start to see a lot of dripping and leakage in profitability.

The other area that I think is really helpful to bring in a system like this where companies have that aha moment if they don't have one today is, the business can be growing right along, but then something happens that's unexpected and they don't have the tools in place to regain focus and get everybody really centered around where they're headed with accountability. Because it's the accountability piece that really drives business performance. And so it's those kinds of tools that sometimes people don't even realize are so necessary to help the business when it gets stuck, because it will again and again, as you know.

Heidi J. Ellsworth: It's so true. We have experienced this. We've seen it. And I love what you say about accountability, because I think accountability is a big one. And also, one of the things you and I have really worked on too is leadership growth. How do we develop those really strong leadership teams that can start letting us delegate and elevate? I'm stealing that from you, Stephanie, but really talking about that, what this does, not just for the culture of your company, but also for the leaders of the company and kind of give really defining accountability and growth potential.

Stephanie Tsatsos: Yes. And I'm just thinking of my experience working with you and your company, which has been just an awesome journey, I love, love, love the work, but I think in a case where sometimes you've been working colleagues for years and years and it's a healthy relationship, you've got a healthy team, but there's definitely stuff that an implementer can see that you can't see in the day to day. So when you get in person, in a room with your team, yes, you're healthy, but you do things... We have that ability to have that unbiased bird's eye view and push you where you need to be pushed, in a healthy way, all with kind of that intention of really, like you said, building trust in the leadership team level, getting really strong as leaders as a team.

Heidi J. Ellsworth: And then that just automatically starts going through the entire company and really getting that cultural thing. So one of the things I'd love for you to talk about, because there's a lot of people out there who are probably thinking, "Yeah, I need to do something, but I just don't know what," and everybody does it a little bit different. Like I said, we self-implemented at first and I know a lot of the people who have just gone straight in and probably saw faster and better growth to be a hundred percent honest. So what is the process... What's your advice, basically, to roofing companies who are thinking about this, but they're just not sure and how to get started?

Stephanie Tsatsos: So one of the beautiful things about EOS, and what I love about this culture, community and our core values, it is a help first. It is. That is so core to what we do and who we are as implementers. My advice is reach out, go to EOS, find an implementer, they will schedule 90 minutes with you, complimentary, you will get a high level of all the tools and disciplines and the process to implement. And at that point, if it feels like something you want to take on yourself, there are so many free tools to go... Go do it. Go try it. Give it a try, if you get stuck, an implementer, no doubt, you will move faster. You will move faster with an implementer. I do believe that.

Heidi J. Ellsworth: Yeah, I know it.

Stephanie Tsatsos: Yeah. You know it. And that that's okay. So everywhere in between. There are companies that are fully running on their own, there are some that try and then realize their tools are missing and there are some that start their journey with, like, "I know myself, I need an implementer." And so everything in between.

Heidi J. Ellsworth: Yeah, and what I really like too and I say this a lot about things, but it's really good to have people who kind of understand the industry. And that's one of the things I love about you is that even though you haven't been in this industry a long time, you've really dived in so you can understand it and understand how we're a little bit different. Business is business, but there's some changes. And so for contractors who are looking out there, would you say that's something also to, as you're looking for implementers or looking for people to help you, have a little familiarity?

Stephanie Tsatsos: Yeah. [inaudible 00:14:01] caught on there. So I think I would answer that in two ways. One, so technically really the process should work within any industry, but I think you're right. Do your due diligence as a company when you're thinking about hiring an implementer. I think it is helpful to have one that has some experience in an industry, of course, because they have cycles of implementing it, and they've seen things that are unique to an industry and there's a lot of knowledge that they can share there. The other benefit to doing some research and talking to multiple is you might find two that have similar industry focus, but then you just connect with someone better. And the journey to implement is really a long-term journey. So you really want to make sure you've got the right fit with your implementer and your client, vice versa.

Heidi J. Ellsworth: Great. To me, that's so important. That connection and trust.

Stephanie Tsatsos: Yep. One hundred percent.

Heidi J. Ellsworth: Because, and I am just going to say this up there, you open your underwear drawer, let's just say it that way. You're seeing everything, right? You're seeing all the financials, you're seeing all the troubles in the company, you're seeing all of this stuff. So you need to really work with someone who you can trust to help you and keep it confidential.

Stephanie Tsatsos: I think it's those two things. Trust that they are capable to help you, and trust that... Yes, you're spot on. There's a lot of... All of the words, all of the smoke, all of the issues you're going to... Yeah. So that is spot on.

Heidi J. Ellsworth: Yep. We found that a lot. So one of the things that I've kind of looked at and really thought about is the culture piece. And you've talked about that a lot. And one of the things, and I just want to share this experience with everybody out there, but one of the first things you had us do since we had self-implemented, now there's this proven process, we kind of probably messed you up a little bit Stephanie, but I have to tell you, the accountability chart. When I first heard that, I was kind of like, "What? What's this about?" But I would love for you just to talk about that a little bit, because I think this will resonate with a lot of companies and especially roofing companies out there, have just... There's so many entrepreneurs who start that business and think they have to do everything. And I'm guilty. And so how does that work?

Stephanie Tsatsos: Elevate is one of the best tools to help you as a leader to start to elevate and delegate. And so not only that, but it brings clarity to the roles within all of your seats and your structure. And there's a lot of value in that, because even when you start to delegate things, if there isn't very clear who owns what, stuff gets lost, things get miscommunicated, projects slip. So it's super, super important. The accountability chart is something that I will say, selfish plug for implementers, often gets missed when companies self-implement. I think that's one tool they don't realize that is... And it's actually... In EOS, we say the root of all evil in a company lives in that accountability chart. So that's really important work.

And so what we're doing there is it's really, it's your org chart on steroids and we take all of the people out of their seats and we eliminate titles and egos and we think, "All right, where is this company going in the next six to 12 months? What is the best and right structure?" Because a lot of times as companies grow, they get too complex and we have to bring it back to a state of simplicity for that next phase. And so take people out of seats, just find the right structure and then we really bring clarity around, "All right, what are the very specific roles this person owns?" And then putting the right people in the right seats, which is so important. We've got tools to do that. You've been through that process. But there are a lot of people issues that we experience when you go through the process, which can be really tough, people issues and decisions, but you're in business to make money. You're a for-profit business. So those tough people decisions need to be made sometimes. EOS can can help you move through those for sure.

Heidi J. Ellsworth: They do. That really... It helped us, talk about just taking everything and stepping back and starting fresh. What a great thing to be able to do for your company, but you have to have some commitment to that, because I have to tell you, it's scary and it's also challenging.

Stephanie Tsatsos: It is. I will say, it is. The look that you team gave me when I was like, "All right guys, erase your org structure, it's gone. We're taking everyone out of their seats," is the same look I get from every client. And it is the toughest exercise, and it is the one where people at the end of it are like... There's just this beautiful sense of aha, discovery, relief, thank you, gratitude. But it's the hardest exercise for sure.

Heidi J. Ellsworth: Yeah, definitely. So there are a number of great roofing companies out there who are on the EOS. And I can think of Ace Roofing out of Montana, Rackley Roofing out of Tennessee, so what happens is these leaders who are in these EOS companies are also leaders within the associations. And so all of a sudden you're in an association meeting and one of these great thought leaders say, "Well, we need to have a VTO." And I think people kind of go, "What's that? What? What's that?" So I would love for you, for everyone out there who's thinking about this, can you just explain what a VTO is and why it's so important?

Stephanie Tsatsos: Yes, yes. That's one of my favorite tools. So the VTO is... Everything we do in EOS is simple. We take that sort of 80/20 approach, just get 80% of the way there. And we do that with the Vision Traction Organizer, around the vision and plan. So it's like strategic business planning simplified. But the beauty of it is... It's wild. Every time we kick off this exercise, usually we spend a few minutes as leaders thinking about, "All right, well, what is your version of the vision? Where do you think you're headed?" And it's almost always different. And no one realizes that. And that's at the leadership team level. So imagine what's going on at the rest of the company.

So what that is, it's a simple eight questions, but there is so much power in getting it out of the head, getting everybody in agreement and sometimes people don't all agree with it, but if they've had a chance to voice their opinion, you've got now they're bought in at least, that is so important. So the eight questions, really simple. It is, what are your core values as a company? What's your core focus? Which is really what's your sweet spot? What's your tenure target? Maybe it's your five-year, really that long range target. Where are we really trying to go? And then we bring that down to the ground with a three-year picture, and that's where we start to get a little more detailed and really vision what the company needs to look like in three short years. And then we do the same thing, bring that down to the ground again in the one year. And so the one year is even more granular. And this is where magic happens, because it's this getting it out of the head onto paper and everybody seeing that same picture, stars align.

And so from there, as you know, from the one year, it's all about rocks, living in the 90 day world. So the leaders are super focused on, "All right, this is where this company needs to focus on over the next 90 days. Everything else is a distraction." Same thing with your leadership team. Everyone's got their own personal individual leadership rocks. And all the issues that the company has, because we all have them, you have that opportunity to get them onto your VTO, because you know that you want to be able to tackle those and we've got a system to work through those issues. Getting them out of your head on paper in our system, whatever system you choose, magic happens. The other thing I missed I think in there is our marketing strategy. So that's a big part of VTO too. Ind a simplified way, but really figuring out who are your court... Who is your ideal customer, and making sure that we are messaging to just that customer and staying in your sweet spot. So simple stuff, but powerful stuff and not easy to do.

Heidi J. Ellsworth: No, and one of the things I love about that and I think it actually, through our exercises, became even so much clearer to me. Because I don't know if I totally got this before, but I love it when you start with a five-year or ten-year plan and then you come back to the three-year plan and say, "Okay, well if we hit this three-year plan, will that get us to the five-year plan?" So you're constantly looking back. And then when you go to the one-year plan, is that getting us to the three-year? Is that getting us to the five-year? To me, that was really powerful. Because a lot of times you can have... I mean, I'm a huge visualizer. I've done it my whole life. I visualize where I want to go and what I want to do, but to then really actually put context around that to how you're going to get to that vision is really incredibly powerful.

Stephanie Tsatsos: Yeah, it's bringing that level of action. So I'm all in on visualization too, but you can wish and hope for things to happen and bring focus to it, but really, at the end of the day, it's that action that you drive towards it. And that's what the system does, is that living in that 90 day world.

Heidi J. Ellsworth: Yeah. Well, so here's the other thing. You were on our Coffee Conversations, and we were talking about mergers and acquisitions and everything that's going on in that direction. And right now, I think having some sort of operating system, whichever one you want to pick, but for us it's EOS, having that kind of operating system also helps you prepare for that phone call that maybe if you... Or your succession plan, or passing the company on to your children, whatever that may be. And you talked a lot about that during the Coffee Conversations and how important it is to have all your processes and everything in place.

Stephanie Tsatsos: Yeah, I wish entrepreneurs wouldn't wait for that phone call to implement EOS. It is a big trigger point where companies start thinking, "All right, we do want to exit. All right, I've heard of EOS, let's clean up the business. Let's get it ready." Oh, I wish they would've done it years ago, because they would've... But yes, it is a helpful thing if you're thinking about succession planning or exiting your business or merging with another company, it is... I've heard time and again that companies that run on EOS are some of the best run small companies that investors and acquirers see. They're just so well run. But selfishly, from the entrepreneur, what they're getting is a company that's probably going to get a better valuation and they've got their core processes in place and they've got the right people in the right seat so they're handing over a really healthy business.

Heidi J. Ellsworth: And if you're talking succession planning, what better way than to have a five-year view on, "Okay, this is where we want to be in five years," the owner exited, whoever's going to take the employees or the next generation or whoever they're going to take over, what does that look like and how do you step through that?

Stephanie Tsatsos: Yeah, 100%. And sometimes family doesn't want to step in. Or a successor doesn't want to. And so having those discussions and other right people in the right seats to do kind of scenario planning, if that's the case. EOS and some of the VTO work and our accountability chart help you work through some of those tough decisions around succession planning.

Heidi J. Ellsworth: It is so important. When you're kind of looking at companies who are looking to get into EOS and they're kind of thinking, "Well, I'm really good. We're really good at this. We know our financials, we know our numbers, we have good people," and stuff like that. As we're going through, let's just talk a little bit about how a good operating system actually fills in all of that. Because you can think you have all this great stuff, and maybe it is great, but it seems like without that operating system, you're missing things in the middle or they're just falling through the gap.

Stephanie Tsatsos: Yeah, and there are a lot of healthy businesses out there that aren't running on EOS, of course, for sure. But why not run faster? Why not be more profitable? Why not have more control of your business? An operating system is going to do that for you. So by no means do you have to have one, but your business can only benefit from it. Some of the areas that I think stand out to me when I am engaging with entrepreneurs that are happy with the way business is running, but then they sort of have, again, an aha moment, really not looking at... I'm not really tracking the numbers that I know are moving the needle every week. They're kind of operating off instinct and things are working well for them and it's just working, but they really aren't measuring. And I'm referring to the scorecard that we build out where you're like, "All right, these are the 10, 15 numbers that we need to be tracking week on week to know, are we going to hit the annual target?"

And you start to be able to see trends versus kind of shooting from the hip or operating off instinct, which a lot of visionary founders tend to do. So that's one. Core processes, that is the process component, something that a lot of times you get busy in the business and you either over complicate it with a huge SOP manual that no one's paying attention to or it's just there is no consistency, which means that your business really isn't going to be scalable. And there's a lot of profitability leakage there. So that's an area that companies, when they're not running on an operating system, but they feel the business has been pretty healthy, that's sort of an aha moment, an opportunity to improve.

Heidi J. Ellsworth: That makes sense. That makes a lot of sense. I love this. I love this stuff, Stephanie, so much. It is so fun. Okay, so how can contractors learn more about EOS?

Stephanie Tsatsos: Yeah, so I would say go to EOS Worldwide. You'll learn that we have a ton of free tools on there, and videos, you'll find a link to find an implementer if you want to set up a free 90-minute meeting. We are a help-first community, so anyone that you would reach out to would gladly share... give you 90 minutes to share the tools and process. And then selfishly, you can always find me on LinkedIn. I'd be absolutely happy to set up a 90-minute with anyone that's interested in exploring EOS.

Heidi J. Ellsworth: Well, I'll tell you what, Stephanie has a directory under Rapid RevOps, sorry, I stumbled, on RoofersCoffeeShop, so you can find all the information there, of course. Also, check out the Coffee Conversations, it was back last spring, that Stephanie was on. Great information on implementing and for succession and really looking at that. And then Stephanie is also getting us articles, all kinds of different things around the EOS, around the operating world, around culture, so be sure to check those out. I am just going to say, I highly recommend you talking to Stephanie because we've had such a great success.

Stephanie Tsatsos: Well, thank you. I appreciate that.

Heidi J. Ellsworth: Yeah, it's so good. So Stephanie, thank you so much. This has been so informational as always.

Stephanie Tsatsos: I loved it. Thanks for the invite. I hope we can do this again soon. It was a lot of fun.

Heidi J. Ellsworth: I loved the conversation, and thank you all for listening. Be sure to check out Rapid RevOps directory on RoofersCoffeeShop, and also all of the information that Stephanie's getting out there. Please check out all of our podcasts under the read, listen, watch navigation and look for podcasts and Roofing Road Trips or on your favorite podcast channel, be sure to subscribe and set those notifications. We'll be seeing you next time on Roofing Road Trips.

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