Emotional Intelligence and The Entrepreneurial Operating System with Dan Heuertz, Serial Entrepreneur

This week, on The Best Team Wins Podcast, we’re talking about getting the people side of your business right through the Entrepreneurial Operating System and emotional intelligence with Dan Heuertz, serial entrepreneur and consultant.

             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transcripts:

Adam Robinson: Welcome to The Best Team Wins Podcast, where we feature entrepreneurs and business leaders whose exceptional approach to the people side of the business has led to incredible results. My name is Adam Robinson and for the next 25 minutes, I’ll be your host as we explore how to build your business through better hiring.
Today on the program we have Dan Heuertz, serial entrepreneur. He has started an amazing 13 companies, the largest … Managed over 70 country clubs throughout the United States with 4,000 employees in 13 different states. Pretty impressive. Dan is currently a professional EOS implementer, and we’re going to get into what that means, but at the end of the day, what Dan does is help entrepreneurs get what they want from their business. Dan, we are thrilled to have you here on the show!
Dan Heuertz: Adam, thank you so much for having me.
Adam Robinson: So we know here that the best learning experiences happen through real experiences shared by fellow entrepreneurs, and so Dan is a wealth of knowledge. He’s been there, he’s done that, he’s seen most of everything, and we look forward to learning a lot from you today, but first, every show we start off on the right foot, so as is the tradition here on The Best Team Wins Podcast, what is the best news, Dan, business or personal that happened to you in the last seven days?
Dan Heuertz: Well, let’s start with business first. As a a professional EOS implementer, I can tell you that my clients, so entrepreneurial-based companies, are absolutely thriving. I would like to think it’s due to a lot of things I do with them, but I also think that they’re energized, enthusiastic, and which is true to being an entrepreneur, but let me give you some data points.
Average for the clients are up 18% on revenue. Two of the clients are having their best EBITDA, or profit, years ever. One just yesterday finally figured out, after being in business for 12 years, what his core focus was, and it was an amazing aha moment, so that’s the best that has happened to me is just my clients are thriving.
Then personally, I’ve decided that Thanksgiving is officially my favorite holiday. Three or four days sitting around, slowing down, hanging out with the family, eating great food and drinking some good wine along the way is a pretty much an ideal way to spend my time.
Adam Robinson: I would say so. You can’t beat it. Dan, thanks for sharing that. Well, let’s dive in to EOS. First of all, what does EOS stand for?
Dan Heuertz: Stands for the Entrepreneurial Operating System, so a system created by a gentleman out of Detroit, Gino Wickman.
Adam Robinson: Okay. What is it? Give us a rundown on what is EOS Entrepreneurial Operating System.
Dan Heuertz: Great question. The way to get people’s mind around it the quickest is think about your computer. You have an operating system, or your phone has an OS, an operating system. It helps you navigate, helps you function within the technology, because there’s a lot going on with a computer or a phone, that the operating system makes it very easy to interface with and use.
So the operating system, which is EOS, Entrepreneurial Operating System, is that system. It makes your business easier to use through simplification. You simplify everything, and there’s a saying at EOS, “Just because it’s simple doesn’t make it easy.” That’s the nuts and bolts of what EOS is.
Adam Robinson: What I’ll tell listeners is Hireology, the company where I’m CEO, has been an EOS user for the last six and a half years, really since day one we launched the business, and I can attest to the power of having the system, the operating system in the game plan. Talk about what kind of companies this is ideal for. For people listening wondering, “Is EOS something that I should be taking a look at?” What’s the guidepost here?
Dan Heuertz: The guideposts are it’s ideal for companies 10 employees to 250 employees. Now, there are some that go lower and there’s some startups that say, “You know what? We want to get on the right foot right away and let’s do it from day one.” I believe there’s the largest company that I know of that’s on this is a 1200-person company. So it fits those type of companies, but really it’s for an entrepreneur.
My clients do range in size, but that 20 to 50 to 80 seems to be where a lot of my clients come into play. Entrepreneurial or visionary type person that’s at the helm, who’s created or founded the company. A lot of times they’re frustrated because they don’t have the system in place and they’re looking for a solution, and that’s when either we, meaning the EOS, find them, or they seek us.
Adam Robinson: Right. There’s no shortage of tools and books and stuff out there targeted to entrepreneurs like us that profess to help us do these things better, some of them good, some of them bad. I mean, I personally believe in this, which is why we’re talking about it today, but as it relates to the people side of the business, I think EOS more than other systems I’ve seen really provides a great tool set to help get this stuff right.
I’d like to dive into a few of those so listeners get a sense of what’s out there and some options as they think through tools that are in the market, but before we go there, as you see it, and you talk to hundreds of companies a year, what are the biggest people challenges your clients are working through? If you were to pick a top three hit list of stuff going sideways or what’s keeping the CEO up at night, what’s your list?
Dan Heuertz: I’ll give kind of a flippant answer first, but people is the answer. People are complex. The biggest issue is and are people issues. Hands-down. With breaking that down, communication is incredibly complex on how to communicate the one message where everyone’s on the same page and that message is shared by all. That’s one of the EOS fundamentals. If there’s a message, if there’s a vision that’s out there, it has to be shared by all. So that’s one of the big challenges is communication and EOS solves that through a tool called Shared By All.
The other thing is, EOS really believes in its structure, the structure to support the vision of the company. Within that structure, there’s two really important seats within the organization and that’s the visionary seat and the integrator seat. The integrator is the one that runs the company. Some people might call it a COO. We don’t use that term in EOS, but that helps paint a picture.
But having that visionary, that founder, that entrepreneur and that integrator, that person who’s really good at running a business, be on the same page is not only critical, I think you can get your head around how important that is, but that’s where there’s a lot of dysfunction. The right hand and the left hands of the two people usually running the company are not on the same page. Those are the two.
Adam Robinson: Sure, well I mean, most entrepreneurs that I know are great at starting stuff and not necessarily good at finishing anything. Is that what you’re talking about, this integrator versus visionary?
Dan Heuertz: You nailed it. Yeah, the visionary, and God bless them, the world needs more visionaries, comes up with 20 ideas a week. Eighteen of them are completely crazy, no chance they should ever get implemented in that business, no how, no way. But man, those two … There’s two out of those 20 that are brilliant, and you want that visionary to continue to come up with those brilliant ideas, but it’s the integrator’s job to get on the same page and say, “You know what? Those 18, they don’t work, but those two, let’s talk about those further. Let’s make sure we’re on the same page, and then trust me as your integrator to integrate them into the business.”
Adam Robinson: It would seem like the prospect of, you know, for a founder especially, to “give up control” of the business every day, that’s a pretty big ask. Is that something that is a roadblock for getting this moved forward? I mean, it sounds like the system is predicated on the founder having enough self-awareness to say, “You know what? I might not be the best person to run this thing day-to-day.”
Dan Heuertz: Yeah, it can … In some examples, in some real-life cases, it can be a pretty short-lived engagement if that visionary, using the words we’ve been using so far, can’t let go of the vine and let the person that’s unique ability is to run the business, if they can’t let go of that and give that up to the other person, they’re not a good fit for EOS, frankly.
The integrator gets energy, is energized by running the day-to-day, by loving the details of weaving the whole business together. The visionary, when they’re in that environment, they’re a ball of fire for 90 days, but then somewhere between day one and day 90, they’re onto 20 new ideas and those others that they were working on just kind of flame out and go away, and that’s just too hard for the company to run like that day-in and day-out.
Adam Robinson: Oh, it’s exhausting!
Dan Heuertz: Yes, it’s exhausting. Exactly right.
Adam Robinson: Yeah, I’ve been that guy exhausting others, Dan. I know. I’m that guy.
Dan Heuertz: Yes.
Adam Robinson: Well, so there are all kinds of tools, I know you’ve mentioned to me and that we’re aware of as an EOS company, that you can use to help get the people side right. I want to talk through a couple of them just conceptually so our listeners have an idea of what some approaches might be. Let’s start with this notion of an Accountability Chart, which is an EOS term. It’s not an org chart, right? Talk about that.
Dan Heuertz: To me, you just nailed it. That’s the power of it. An org chart implies, explicitly if you ask me, that it’s a serious reporting structure. You’re to be in this box, do these roles and responsibilities, and frankly, really nothing else.
Accountability chart is just dramatically different. First of all, there’s no titles. There’s a saying within EOS, “Titles mean entitlement.” So just because you have a senior vice president role, somehow you have more say or your words are more valuable than someone else’s. That’s not the framework of EOS.
EOS, through the accountability chart, decides who’s going to be on a leadership team. It’s usually a visionary, an integrator, person that’s in charge of sales and marketing, operations, and finance. Just generally speaking, those cover almost every business out there today. That’s your leadership team, but they function as a team so they have equal say. They’re in the room together talking and framing the vision and how to get traction for the company to realize its vision.
Adam Robinson: So talk about then this concept that EOS companies use called GWC. What does that mean?
Dan Heuertz: So Get it, Want it, have the Capacity, so the C part … So get it, want it, capacity to do it. GWC is a great handy tool. I now find I use it almost in my everyday life, and I quickly assess people. Do they get it?
Once the accountability chart is structured, you go through and put all of the key functions for that seat on the leadership team and then that person, a person who might be in charge of sales, the rest of the leadership team simply evaluates them. Does that person get it? So I mean, do they truly get what we’re asking them to do? It’s 100% yes by all the leadership team. It’s all yeses or that person can’t fill that seat on the accountability chart.
Do they want it? So they have to be convincing. Equal to what we just said with get it. Do they want it? Do they truly want it? Then capacity. Capacity is very interesting. Capacity could mean do they have enough time? Frankly, it could mean do they have the intellect to do it or the emotional intelligence to do it? So it’s capacity. It’s a little bit more subjective, but it’s also a very key component of GWC.
Adam Robinson: What you’re saying is, Dan, they have to have all three.
Dan Heuertz: Have to have all three.
Adam Robinson: You have to know what’s expected of you. You have to get it. You have to actually want to do the job, and even if you get it and you want it, if you aren’t capable of delivering, that’s not going to work.
Dan Heuertz: Yep.
Adam Robinson: So it’s all three are yes, and what you’re telling me is that at the leadership team level in the organization, everyone has to agree that everyone is 100% all three of those things.
Dan Heuertz: That’s right. Now, some people get a little worried here because they’re saying, “Oh my-
Adam Robinson: Well, sure!
Dan Heuertz: “I’m not on the leadership team!” They might even, in their own minds, say, “Now I’m out of the company!” No! We just find the right seat for you within the company. Just because you don’t GWC that seat and have three yeses, you’re still valuable to the company and we’ll find a seat for you where you fit perfectly and you do GWC that seat.
Adam Robinson: With a process this intentional, I can imagine there are some meetings where halfway through, one of the members of a five, six, seven-person leadership team is sitting there and it’s pretty obvious that they’re the one that isn’t the person that’s going to be there very long. I mean, talk about that.
What does a process like this, with some rigor attached to it, do to flush out quickly who needs to move? Because that is the, as I see it, the problem so many companies have is they get stuck. They’ve got two, three co-founders and a couple of early employees. One or two of them aren’t scaling with the business. Everybody knows it. Nobody’s saying anything, and they’re stuck. Is this the kind of a process that unsticks these things?
Dan Heuertz: 100%.
Adam Robinson: Well, so how do you do that delicately? I mean, it’s kind of like pulling the pin on a hand grenade.
Dan Heuertz: Once in a while it goes kaboom. I’ll tell you, I’ve been in the room and there’s an EOS term called enter the danger. It’s meant to be that you can’t look away from it. You know it’s dangerous, but without … In the beginning people aren’t saying it, but they’re saying it through their body language and in other means.
As a professional EOS implementer, it’s our responsibility, this is where some people might buy the book Traction and self-implement. This part is uncomfortable when you’re all working on the same team. So as an implementer, and one of the advantages of working with a professional implementer is, it’s our job to smoke these issues out. It’s pretty clear to me as being that implementer, that that situation exists. This person, it might have been an early-on employee, the founder has a great deal of loyalty to them because they’re employee number three, and they’re just along for the ride, although the ride has outpaced them a long time ago.
We do address those issues head-on through a tool that we call The People Analyzer. We put those people through a … It’s kind of rigorous, but you would put them through, and first, grade them against the core values of the organization. So do they honor the core values? Okay? It’s a simple plus-minus. A plus means yes, most of the time they represent the core values. A minus, some of the time they don’t. A plus-minus means sometimes yes, sometimes no.
Then you set the bar. So 60% of the time they must represent the core values. Then you GWC that person as well. Do they get it, want it, or have the capacity to do it? But here’s the power of it. It’s done with their peers present. Their peers are actually doing a real in-time performance review in front of each other.
Adam Robinson: Oh, that’s intense!
Dan Heuertz: Very intense. I just did it yesterday with a client and it was intense. Trust me, it was definitely intense. Because everyone on the leadership team is equal, they’re all going through the same thing. They’re all taking the same risks. They’ve all entered the danger together and that’s the power of it, because it’s all being done through your peers.
Adam Robinson: I can imagine it’s your job as the moderator to push people there, because Dan, if you’re on my team and I don’t think you’ve got the capacity to do your job, I have to look you in the eye and say, “Dan, I’m sorry. I don’t think you have the capacity to do this job.” If the culture of the team is that we’ve never done that before, I mean, I …
Dan Heuertz: Right.
Adam Robinson: That’s the real deal right there.
Dan Heuertz: That’s the real deal. Yep. There’s a saying if you work within EOS with an implementer, there’s a simple saying that’s so powerful, and it’s called “Open and honest.” So open, open to ideas, open to others, just like this critique we were just talking about. But honest, not the 70%, 80% honest of the everyday world where it’s just a congeniality of getting along with each other, but piercing through that and being 90 or 95% honest and saying, “Darn it. Joe, you’re a good guy. You’ve been here from the beginning, but we have to move on. The company’s moved on some time ago without you and you don’t pass the GWC,” for example.
Adam Robinson: Wow. I mean, that is … Those are the moments that matter and move companies forward. I want to shift gears with the final five minutes we’ve got here and talk about a concept that you’ve been a proponent of and I respect greatly, this notion of what’s called PDEI. It’s a powerful tool you’ve taught me to have important conversations, to be a better listener, and just all-around better leader and person, and I’d like for you to talk about. What is PDEI and how can somebody use this in their day-to-day business?
Dan Heuertz: I think PDEI, the EI, so emotional intelligence, which is also called EQ, to put it on the same platform as IQ. So IQ is your intelligence. Are you book smart or can you do certain things well and you’re intelligent? Emotional intelligent, EQ, is about how well you relate to the world around you and to others, specifically that you might be communicating or engaging with. So PDEI is process-designed emotional intelligence.
There’s this great man by the man of Jim Liautaud who came up with those. I was fortunate enough to be his shadow for many years and thank him dearly for it, but it’s a way to connect … It’s as simple as this. You could get started immediately by doing this simple … Have this simple mindset and doing a few simple techniques.
The mindset is it’s all about them and it’s not about you. Think of most conversations you have. You’re the one who’s trying to dominate the conversation. If you simply turn that and make it all about them where you’re listening, which by the way, you’re actually getting, if you believe it or not, getting more out of that conversation than when you’re doing all the talking. Through that engagement process, it’s the engagement of I’m fully present. My eyes are locked in with yours. I’m feeling your words emotionally and intellectually. My head’s nodding in affirmation, and it’s a synchronized way to communicate, which is an amazing way to go through life once you’ve learned this technique.
Adam Robinson: Where could listeners find out more about PDEI?
Dan Heuertz: I would suggest you go to Liautaud Institute website and it’s LiautaudInstitute.com
Adam Robinson: Could you spell Liautaud for us?
Dan Heuertz: Yeah. L-I-A-U-T-A-U-D Institute, and I think they’re both .com and .org.
Adam Robinson: That’s great. Thanks, Dan. Time for the lightning round here with the last couple of minutes we’ve got, Dan. We ask everybody that comes on the show a couple of questions about future direction on some things. The very first question, do you think the US economy is getting better or worse over the next 12 months?
Dan Heuertz: Boy, this is a tough one these days, especially right after the election, but I’m going to say better.
Adam Robinson: Better. Okay, do you think it’s getting easier or harder for companies to find the people they need over the next 12 months?
Dan Heuertz: Harder.
Adam Robinson: Harder? Okay. Final question. What book are you reading right now and would you recommend it to our audience?
Dan Heuertz: I would. It’s by a friend of mine. His name is Rene Boer and the name of the book is called How To Be a Great Boss. He’s a dear friend and the book should be a prerequisite for any boss that is out there. Before they hire their first employee, they should read this book.
Adam Robinson: Dan, if you were to come back on this show a year from now and report on whether or not you accomplished the most important thing on your plate right now, what is that thing?
Dan Heuertz: So for me, it’s all about my clients and giving back more and more to them. If I come back, and just like we said at the beginning, if I can report back those similar type of increase in sales and profits and them growing at the rate that they are, I’ve accomplished exactly why I’m here today.
Adam Robinson: Dan, if people want to learn more about you or what you’re doing, how can they find out more?
Dan Heuertz: You can go to the EOS Worldwide website. That’s EOSworldwide.com. You could simply, under Implementers, put my name in there. It’s Dan, last name Heuertz, and you’ll have a bio and videos and all of those type of things that are there. Or you can email me directly, which is dan@preferredgrp.com.
Adam Robinson: That’s the final word. You’ve been learning from Dan Heuertz, serial entrepreneur, all-around awesome human being, and EOS implementer. It’s great to hear what tools are available out there for entrepreneurs and leaders to get the people side of their business right. Dan, thank you so much for being with us today on the program.
Dan Heuertz: You’re very welcome, Adam.
Adam Robinson: That’s a wrap for this episode of The Best Team Wins Podcast where we’re featuring entrepreneurs and business leaders whose exceptional approach to the people side of their business has led to incredible results. I’m Adam Robinson, author of the book The Best Team Wins, which you can find online at thebestteamwins.com. We’ll see you next week!

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