Chris Dreyer:
If you're interested in running a better business, you probably heard of EOS, the Entrepreneurial Operating System. It is wildly popular and for good reason. But what happens when your firm starts scaling massively and outgrows it? Today, I'm taking you behind the scenes of our own operating system at Rankings, why standard EOS started failing us as we approached 200 employees and how we fixed it.
This is Personal Injury Mastermind. I'm Chris Dreyer, founder and CEO of Rankings.io, the elite performance marketing agency for personal injury law firms. Welcome back to another solocast. Today, we're tackling the engine of your law firm, your business operating system. Let's jump right into it.
I want to talk about something really important that every business needs is a business operating system, so a framework to run the business. In the legal space right now, EOS, the Entrepreneurial Operating System, is probably the most common. I think that it does give you a foundation. If you're a founding firm, or you don't have a framework, and it's kind of a mess and you need something to start with, use EOS. Look, I use EOS.
One of the things that I started doing for our company was we tried to self-implement, so I read all the books, I read Traction. There's like six books. There's even the legal book, Fireproof that Mike Morse wrote with John Nachazel. And it's a great system, right? I tried to self-implement. I then went and hired an EOS implementer. They called their coaches implementers. And they kind of ride sidecar with you. They joined the meetings. They're what I would call a chairman. The chairman is nice because they can take notes, they can create the agenda, and you as the owner can use your brain power to think about growing the business, and not orchestrating are we on time for this agenda or that and getting everyone prepared.
I have a lot of issues with EOS. So I would say that we're running a Frankensteined EOS now. We're close to 200 people now. So that's the issue. I think that EOS is designed for companies up to about 150 people. I know that there are some people listening and probably like, "Oh, we're 200 people. We're doing EOS." But I don't know. Are you running EOS or are you running a Frankenstein monster like us?
And let me back up. EOS was created by Gino Wickman. It hits on things like vision, data, process, traction, issues, people. It's a simplified framework. It stemmed from the Rockefeller Habits, which was Verne Harnish, and Scaling Up. Scaling Up's a fantastic book. But I would call it, look, let's call a spade a spade. It's the neutered version of Scaling Up or the Rockefeller Habits, significantly neutered.
There's not strategies around cash acceleration cycles. The strategy component is just completely missing. But it does give you something simple to follow and I think that's why a lot of people like it is because it is simple. But when you're growing a large business, it has some flaws that you have to get around, and I'll start to uncover those.
So the first thing that I have a big issue with are the level 10 meetings. They're structured. They have an hour and a half agenda. Look, Parkinson's law, I don't want all of my meetings being an hour and a half just to be an hour and a half. I like to shrink things into the time to make them more impactful. And so I want people prepared. I want things filled out. They have this IDS issues list. I will not do an issue if there's no background or no information. I know Jeff Bezos has his memos that he has his team read during the meeting, not before, to really analyze problems. That's how I feel. I think when you just throw an issue on the board and you want to talk about it and try to solve it with no context, I think it's just a waste of everyone's time. So first, I think they're too long.
The second thing that I really have an issue with is your rock setting. So rocks are supposed to be these top priorities, these 90 day goals. They're longer increments than a to do. A to do is supposed to be something you can accomplish in seven days. And look, let's not get too pigeonholed by the nomenclature. I think where the rocks really fail is when you don't make them smart goals or OKRs. Now EOS, they don't have this. They don't have smart goals or OKRs. So when you're starting to develop these and starting to put deadlines and make them objective and append this stuff, you're moving in the scaling upland, right? Now people say, "Oh, that's how you do a goal." Well, no, not for EOS. EOS is is the goal on track or off, which drives me freaking bananas as an owner. I want to know when you're going to get done. Give me a deadline, and then I'll hold you accountable to that.
The next is the strategies are really limited. So there's no mental models or frameworks that they really use to create a strategic analysis of a strategy around where you're going to go and how you're going to win. That's important. There's no competition analysis. There's no strategies in regards to how you're going to get there. So I do a lot of mental models and things to uncover what the best strategy is that we're going to take. But it really ignores the strategy. And more importantly, it ignores the capital side of the strategy.
And I would argue for the personal injury law firms listening, that's probably the single biggest disadvantage to EOS because your cash acceleration cycle is completely awful, 12 to 18 month cycles. So when you take this into effect, by the way, this is, again, you're making the Frankenstein's monster because there's nothing in regards to capital strategy on EOS. You want to take a look at revenue per employee, be at least 200,000. You want to look at gross margin, you want to look at time on desk. All of these things, what your inventory or your client case value is that are open. All these play into projections, and it makes it really challenging as you get bigger because you got to feed the beast. When you're small, okay, you can kind of manage. You can log into the bank account, maybe you're doing some profit first Michalowicz stuff, but when you get larger, you need a CFO, you need someone that really understands these acceleration cycles and how they can impact your business.
There's no exercise on market differentiation, market positioning, customer definition. All those things are components of Scaling Up. Scaling Up is, look, for all the things that Verne got right, he didn't make it simple. So there's a reason why people do EOS because it's complicated. I've read Scaling Up probably six times and I still find myself leaving it on the desk and having to flip open to certain mental models and frameworks in order to use it effectively. And there's some other things like the scorecards. Yes, data is very important.
So I think the thing that EOS gets right is making the company more data oriented to make decisions. But a lot of times when you're setting up these weekly L10s, they tend to be leading indicators. Leading indicators are largely activity based. So you're checking output that's predictive of outcomes. You need more lagging indicators. There needs to be a system around lagging indicators where you're looking at things retroactively to make decisions as well.
Then you got rating the meeting. On a scale of one to 10, how effective was this meeting? That is complete and utter garbage. A better question is what's the main thing that you're going to do to create an impact for our business this week? If the meeting was a seven, what would make it a 10? Puke my guts out. Nobody talks like that. So I think rating the meeting is completely an utter waste of time.
The other thing too is a lot of these implementators, and look, I have no idea, I'm not singling out anybody individual, but everybody that I've worked with tries to push you on this Ninety.io software program that is complete and utter trash. To get the maximum use out of it, it's $16 a head. So for someone like me, we're talking 35 to $40,000 to use this program. It doesn't have any of the capabilities of a Notion or a ClickUp, project management. We use Notion. It is vastly, vastly superior at $10 a user, could be your whole knowledge base.
And then finally the integrator. The integrator's connected to everyone, this magical unicorn that's just going to solve all your problems. No, function specific experts, CFOs for finance, COO for systems and processes. The integrator, it's like looking for a needle in the haystack. It's just completely illogical and let's create a name. Yeah, that's fine if you're a 10 person company. Get the integrator, the jack of all trades. But okay, that's my rant.
So let's now talk about some things that we've done to modify it. So for most of my meetings, they're an hour. They're not an hour and a half. Many of them, we set them at 45 minutes. I really like a 45 minute meeting. The other thing is we've attached deadlines and we run our goals like OKRs. The other thing too, when we are getting preparing for quarterlies or annuals, we're introducing mental models and frameworks to develop strategies and competitive analysis. We do a survey to all of our employees where we ask, and this is a Scaling Up question, "What should we start doing, what should we stop doing, and what should we keep doing?" Those three questions really pull out of a lot of great information. I think it's important to survey all of your employees from an EPS perspective. You want to have people that are really engaged. And from an NPS perspective, you want to have clients that are happy with the service that you're providing. So those are good things to do to help you prepare.
The other thing too is the people analyzer. If you're a plus minus and you're a plus on our values and you're below the line, we're going to PIP and fire you. I just think that that is too rudimentary when it comes to people. I think that a lot of times when we get emotional and things are subjective, it makes it harder to make decisions versus objective, like objective data to make decisions on performance.
I was listening to this podcast lately, I think it was the Shopify CEO where he looks as employees like a battery. When they start to not perform, their battery is low and they need recharged to get more out of them. They need to be engaged or maybe be plugged into a different part of the company. I really like that framework of looking at things.
And then just overall, you need data on everything. It doesn't matter what department. I know it's, hey, everyone has a number, but there's a reason why in the major leagues that there's a WHIP, the walks, hits, innings pitched, or whatever, where they use multiple metrics. It's hard to put certain people on just one KPI. You need a few KPIs to really uncover if someone's performing, are they from an activity perspective or an outcome perspective.
I don't have the perfect solve. I've shortened my meetings, hit some deadlines, introduced some mental models, introduced some surveys. I have significantly better data from a lagging indicator perspective. I'm not doing a 10 year goal. I mean, that's whackadoo when it comes to today and AI. I mean, who knows if these Tesla bots are going to be doing my podcast for me. Who knows? So I think 10 years is way too far out. I mean, all strategy is is a big guessing game anyways. So you're going to guess 10 years in the future. I mean, I hope you're a good guesser.
I'm looking at, for my size, going over 200 heads, 200 people, instead of like just Frankensteining this EOS, I am looking at Scaling Up. There's a coach and advisors called Petra. I get nothing mentioning this. I've never used them. The thing that I like about their pitch is they have basically Petra assigns you two people. They append a strategist to your account and an accountability coach. I hate the accountability thing because it makes me sound like you're my nanny. I don't need an accountability coach, but I get it. That's your positioning, Petra coach. But yeah, you get two individuals on your account. It's not terribly expensive.
And for those of you that don't have a business framework, I think EOS is a great place to start. For all my hate, my hateraid that I had on this episode, I think it is good. I just think that at a certain point you need to start introducing some of these other components to it to really get the most out of it.
So that's it for today. I'll give you guys an update in the future on how we're trying to solve our Frankenstein EOS. Also, I would absolutely love it if you're a business with over 200 people, if you could reach out to me and let me know what you're struggling with and how you're dealing with it. Track me down on LinkedIn, shoot me a DM, and let me know what you're doing to modify EOS to better take advantage of your firm. And if you're looking for an agency partner that actually understands the metrics, the capital cycles, and the data required to scale a massive PI firm, head on over to Rankings.io, let's talk about turning your marketing into a true growth engine. I'm Chris Dreyer and this is Personal Injury Mastermind. We'll see you next time.
