How to manage your greed and fear with EOS®

Greed and Fear are the two of the strongest human motivators, including for us entrepreneurs. When your business is on a roll, it will wet your appetite for more growth and success. 2007 was the best year for my investment banking business, and as we moved into 2008 with a full pipeline, I decided to pull out all the stops.  I got greedy, moved my firm into a large and posh office space and hired several analysts.  By the summer, we were bleeding cash, but hell, we had 5 sizable deals under due diligence and were going to make a killing…

You already guessed how this story ended.  In September 2008, markets went into a tailspin and fear took over.  Our buyers pulled the plugs on 4 of the 5 acquisitions we were working on and renegotiated our single remaining project down by 40%. We lost a pretty penny that year…

The 20-Mile March

So what has the Entrepreneurial Operating System® (EOS or Traction®) to do with my folly of 10 years ago?

One of the principles underlying EOS is what Jim Collins (Good to Great) calls the “20-Mile March”. Collins coined this expression after the strategy of polar explorer, Roald Amundsen, who consistently walked 20 miles each day irrespective of weather conditions, while his competitor, Robert Falcon Scott got his team exhausted and sick by varying daily marches according to the weather.  Amundsen’s team reached the South Pole 34 days before Scott and returned safely, while Scott and his team died on the way back. In his most recent book, Great by Choice, Jim Collins discovered that nearly all the market-outperforming companies he selected were 20-Mile Marching, i.e. they were growing sales and profits at a consistent sustainable clip over a 15 year period.  This allowed them to avoid burnout, hiring challenges and other problems of fluctuating growth.

Two of EOS’s foundational tools, Rocks and the Scorecard will help you find and stay on track with your own 20-mile march. Your 20-mile marching will force you to reign in GREED by restraining you from biting more than you can chew.  By the same token, it will hold you accountable to executing each quarter a limited number but highly important Rocks (important projects beyond the scope of day to day activities), and to weekly track your action indicators (i.e. number of sales calls per week). If you do that, I guarantee that you will have little reason to FEAR your accountant.