Business Operating Systems (BOS) With Gravitas Impact Coaches

The company that is moving quickly in the future understands their strategy is putting a lot of effort in building an incredible attractive culture and is documenting what really works through documenting processes.

Hello, it's David Jennings. Today I'm joined by Keith Cupp and we actually got connected through one of his Gravitas coaches who loved systemology. And once we were connected and our two methodologies just fit together like puzzle pieces. So Keith has had quite a lot of experience in the trenches over 25 years. One of the positions that he held was actually the president of Gazelles Internationals, which is Bern Harnish's coaching group, where he helped a group of over 250 coaches as they grew that organization up to that level. He's the author of the Seven Attributes of Agile Growth and. And for the past 10 years, he's been the head coach over at Gravitas Impact Coaches. Now systems happens to be one of the core attributes of Agile Growth. So clearly he's a systems guy and with his military background in the Navy, yeah, we very much connect on a systems level. That's why we've got him here today. And I'd love to dive into the business operating system that Gravitas coaches use when they're working with their clients. So perhaps. First things first. Just like to welcome you, Keith, to the Call.

Well, thank you so much, David. Glad to be here. And just also a tip of the hat to the readers in the great country of Australia. Last year about this time, you and I were having lunch in Melbourne, Australia, and so it was so great to get face to face. And thanks for having me back.

Absolute pleasure. Anytime I get with Keith. Keith's actually spoken to our systemologists as well, so I'm very much excited to introduce him to our larger audience. Maybe just to start, Keith, if we think in terms of this operating system for running a business, and I know you've got the seven attributes, my first question is, how would you describe what a business operating system is?

Okay, and let me start with this story. So I came up eventually, originally through the sales ranks in the military. I was an engineer, trained as an engineer, think like systems, and so on. But then in business I got into the sales ranks, moved up through managing partner and eventually into a president's role, and did that two or three times in private business and have done that with Gravitas. But along that journey, I scratched my head and wondered, is there a framework or an operating system so I don't have to redesign or start all over in every company? Why reinvent the wheel? And so that's where I came along. Rockefeller Habits, written by Vern Harnish. Brilliant book and he's a fantastic curator and he put together the Rockefeller Habits and so we began to use that. And then eventually as I stepped into gravitas, I said, hey, I'm going to take my experience doing this for 20, 25 years and as a coach and I would like to design something that is rock solid, scalable and evergreen. And I'll talk about that in a little bit. So what a business operating system does, it helps the founder, CEO, managing director, instead of reinventing the wheel every time, take a system that they can use to build a company and scale it in a sequential, predictable manner without having reinvent the wheel. And that allows them to focus on other things, the strategy and the people, which are the two most important things a leader need to focus on. So that's what a business operating system or framework can do for a business.

Depending on where someone gets started in the size of their team, oftentimes when they start working with systemology, we get down to thinking in terms of delivering the core product or service and we're thinking about the different departments in the business and the systems that really drive that department to get the result. And I see this framework, it's a framework that sits over the top of all of those departments, or if I had to put it into a department, I would say, well, it goes into the management department, if we were to think of it that way. And I. This framework that you've got is a fantastic way to think about how the management team should be running the organization and the systems required for that. So this goes beyond how do I set up a calendar, invite and get someone to appear at a sales presentation and what is the process for that? This, this is the process for running business. So, yeah, tell us about these seven attributes because I know that it's key to make sure that you nail each one of these. That's the other thing that makes sometimes management systems a little bit harder is, you know, I love things in a linear order. Do this one first, do that one second. Whereas when they're, we're talking attributes, you will need to lean into different ones at different times.

And one analogy that I like to use at times is think of the. The spinal cord, the central nervous system is similar to the seven attributes. It helps drive all of the systems in the body, whether it's the heart and the lungs, the motor function, the vision, and so on. And so the seven attributes are leadership, which is really the Most important attribute overall to get started. But we don't put it at a higher level, but we say it's very important. And then once you have your leadership well moving, you got to have a really good strategy in the company. How are we differentiating ourselves? And then in order to really be successful, you have to have the right talent, the right people in the right seats, as Jim Collins would say. And then you move from there to focusing on the customer. Who is your core customer, what is your brand promise and how do you differentiate yourself in the competitive landscape? And so once you have your focus on your customer, then it's all about execution. Am I able to take my strategy, focus on my customer with my leadership and talent, execute to then yield profit? Okay. And then finally you finish up with systems. Because as you scale from a startup, you need to systematize. And in order to scale and as we designed, I'll use the term we, I designed it, but really I'm drawing on a lot of experience from others. As we designed the seven attributes, we wanted it to be relevant for a startup. Who could look through the lens of a startup and say, you know, I really need to work on customer, get my customer revenue wheel going as well as all the way up to billion dollar companies that in fact the seven attributes book was written around a billion dollar company and how they scaled from one size to get to that size. And so the seven attributes, you can start at any one, often based on where your biggest pain is and you can use it in different sizes of companies through time.

I think I like that analogy that you gave around the human body because we talk in terms of your human body, that is a system and things like your lungs, like there are different subsystems within that. And if any of those subsystems are unhealthy, it makes your body as a whole unhealthy. So it's very important that each of those subsystems are strong. And then the idea that the seven attributes are like the spinal cord to communicate that messaging and across, I think that fits really well with my model the world. And the way that I think about it, as you walked through those different stages and that idea of, well, you can lean into wherever you're having the most trouble. Also as you explained them, if you went in that order that you delivered them, that's almost a linear order. That made sense to me. As you explained it, if you weren't, you know, if you didn't take any specific information in about the person's circumstance, you would say, and here's the general way in which you go through it. I just wanted to make sure I interpreted that correctly.

Yes. And so in life there's the theoretical and there's reality on the ground. This is something I learned in the military. Right. We'd go somewhere in the world and here's our theory on how we would approach this situation or conflict. But as soon as you're, you know, you're on the ground or you're over the top of the ground looking into it, things change and then you adapt to the reality on the ground. That's why it's called the agile. Okay, seven attributes of Agile growth. It's about growth, companies and being agile. But yes, for someone starting out and understanding the framework and reading the monograph, It's a simple 60 minute read. To think of it, hey, how am I doing in the leadership area? How am I doing in strategy? Kind of go through it and you learn how it flows in the areas and then you can really overlay or look through the lens of hey, where are we today? Oh my gosh, we are weak on cash flow and we have lots of market in front of us. Well, let's immediately go to the profit attribute and let's look how we accelerate internal cash flow through using different levers. Whether it's hey, let's do a price increase or let's better our AR or etc. So then you drill down in order to alleviate the pain and then turn it from a weakness to a strength. Then you step back and as in whack a mole. That great game that our kids play and we may have played. You hit one thing and you solve it in the area of profit. Cash boy tell you look what pops up over here and you go over there and you address talent or whatever. And so that's why it's very, very dynamic.

Yes, I, I love the diagnostic tool that you have as well and we'll make sure that we share that. I'll pop a link near this interview where you go through the seven attributes and then underneath those there is a series of questions that you can answer and then basically there is a, a tool or a process that sits behind that. So if you're having problems in a particular area, then, then there's a way to solve that with a tool or a process. So if we went through the seven attributes starting off with leadership and then if we were to apply the 8020 rule and think what is the one or two key systems or processes that you feel fall into leadership without that in place, leadership doesn't happen. Or you don't deliver on the promise of leadership. Is there anything that comes to mind under that or just to speak to leadership in general?

Yeah, two things come to mind specifically in leadership. The first one is the bottleneck is always at the top. If the leader of the organization or the leaders are not growing and developing, the organization will not be stymied by cash flow or market ability to execute or talent. It will be stymied and the constraint will be leadership. So the very first thing we want to see is the leaders have a learning plan individually and together. What are they reading and discussing together that is pointed at a curtain, a current or future real world problem. And an example right now, just to be very transparent is we want leaders and companies reading and studying artificial intelligence and talking about it because they got to get out in front of it. And the first place to start is learning and expanding your mind. The other area which is critical when we get into the actual execution of the business is what we call the functional accountability. If you look at your leadership team, whether you're a small company or a larger company, what are the key roles at the leadership table and who is sitting in those roles and, and how are they measuring success? So if you're a startup, which I've been part of a startup, I set in almost all the roles, except maybe my controller, contract controller. But I still needed to ask myself, hey, when am I the VP of Sales, so to speak, when am I the CFO, etc. And then I need to know when I'm in that seat or someone else is in the seat. And then the key is what is the one metric that will measure their success so that I can say, hey Robert, you're the cfo, how are we doing in this area? And so the functional accountability identifies all the areas, who's in the seat and then which one to hire next in order to scale to the next level. And that's, you know, it's a simple tool that can be used in an exercise in about an hour. You can get amazing clarity on that.

I think anyone listening to this as we go through each of these should just almost be running their own diagnostic on their business and going, do I have this in place? And if not, it's been identified as a key process that needs to be in place or tool. So I think take that away, the second one then being strategy again, and we'll go through each and apply the same thinking. I'd love to know what the key process systems checklist tools that sit under strategy for you okay.

And before I hit strategy, I want to say something about the checklist. I'm a big believer in data and data through time. And so the tool that we'll make available is a one page tool, two sides and it's got the seven attributes and what someone does, a leader or the team scores it on a 0 to 10, they keep their scores and they do it every quarter. David and they put it in a spreadsheet. So over a year or two years, you're seeing your company build based on the scores and you're seeing the results in a data driven way. And when you see something dip, you can then predict what to focus on. So it was built to collect data and look at the data over time too.

I love that. That's almost like the overarching system for all of these seven attributes, which is basically on a regular cadence every quarter. Go through the diagnostic tool, rate yourself, score yourself, and then you know, what gets managed or what gets monitored gets improved. Here we're putting our attention on these key areas and then we come back next quarter. So I love that then as we move into the strategy component.

So in strategy, it's really interesting. One of the most important things, all companies have a strategy, whether it's stated or not. And so one of the most important things to win the game of business sooner than later is understand what your differentiators are relative to your competitive set. So one of the exercises that we recommend, one of the tools, one of the conversations is build your competitive map. Okay, who are our top three competitors? And then what do we do different and better? And what do they do different and better? And then here's the key relative to what the buying market we're focusing on. And so if we know who our core customer is under the customer attribute, we know what their attributes for purchasing or buying are and then we know the competitive landscape. We can then build a stronger competitive differentiation in order to get a higher profit level in our products. And so strategy is the more complex one. But Michael Porter wrote an article years ago, Michael Porter PROFESSOR at Harvard Senior Statesman now and the article harvardbusinessreview.org what is strategy? And that one article, what is strategy? Is fantastic. 90 minute read and then do your differentiation is incredible, incredible exercise.

Is that something that you would suggest is done on a quarterly or annual basis? Where does that come in as far as reviewing it like the period?

That's a great question. In the early days, you're going to definitely want to do some deep work in the first couple of Quarters. But then what? We recommend that every end of the year, fiscal year, everyone review the year and plan the coming year. And part of planning the coming year is review and tune up your strategy and look at the org chart you have today and what your org chart should be in one year from now and determine what you need to acquire in talent to get there.

Yeah, love it. Well, that leads perfectly into the next section, which is talent. So what, what are the key pieces there?

We follow and subscribe a lot to what Pat Lincione has done in the talent area. And so the two things there. We have a tool that evaluates what we call an A player, a B player, or a C player. And to boil it down, it's a simple matrix. A leader looks at the team around them and say, okay, who's living the core values and what is their productivity? And someone that is living the core value, strongly and very productive. They're an A player. And so we want to make sure we don't ignore them, but we are rewarding them and recognizing them because we want to retain them. And then you just kind of go around the matrix ending up in the lower left, who's not living the values? They're causing problems in the culture and they're not productive. They're a C player. We need to move them out of the company. And that may sound harsh, but what we found through years is they often will be moved out of a company they don't want to be in and they're not thriving and happy in, and they go to another company where now they find their niche and they're living the values that they have and they begin to be productive and they move to become an A player. And so you're actually giving them the gift of freedom to go find a better place. And so understanding what your talent is. And then of course, Pat has done great work in what the five dysfunctions of a team. If you have a true team every year, you at least every year you want to be finding out how functional or dysfunctional is our team. And all teams have a certain level of dysfunction. Sometimes they see it, sometimes they don't.

That analysis where we review the staff and figure out ABCs and Ds where they fit and does that fit in on the same cadence? Obviously, some of these tools, when you're first doing them, you're going to do a little bit of deep work at the start because it's the first time you've applied it, and you lean into the areas where you feel the most pain. Currently in the business, but then once you kind of move to more of a maintenance mode, at what cadence do you run that review?

Yeah, a great question. So deep work early and then often twice a year. And then when your flywheel is really moving, most tools you'd revisit once a year, either mid year or at the end of the year as you're preparing for the next year.

Yeah, perfect. How about execution? That's the next attribute.

Yeah, execution. There are three really drivers there. One is your communication rhythms. Do we have a daily huddle? Do we have a weekly meeting where we're checking on our quarterly priority status? Do we have a monthly review where we're looking at the financial results the previous month, asking, hey, what happened? What are the patterns? What did we succeed? And then of course, the annual planning, what did we do last year, what were the patterns, etc. So the communication rhythms are set, calendared, everybody's committed to them. And then the other discipline is setting priorities, a limited number of priorities for the company and the individual every quarter, discussing progress every week so that there's accountability. And for companies that will get communication rhythms in place and set a limited number of priorities for the company and the individual, their ability to execute really goes up dramatically.

This one kind of made the idea of rhythms and the meeting cadence jump out at me because some of the other things that you'd mentioned in leadership strategy and talent, there are, there's clearly a meeting cadence of, okay, annual, you know, every twice a year we've got quarterlies and, and now we're right down to the, you know, frontline execution, whether that's your dailies and your monthly. So I definitely think, I don't know if you could speak to anything about how you think about getting that meeting rhythm. Right. One thing I'll mention is for us, because we've tried a few different bits and pieces, is generally when I think about a system or a process, it's always the starting point. And then you need to customize it and tailor it to your individual situation. Because when we were applying meeting cadences, sometimes looking at traction and, you know, EOs and even Vern Harnish's stuff, they're sometimes made for different sized organizations, so we'd have to change it for our situation. But I'd love your thoughts on that.

Yeah, and excellent point, because you want to be able to use a tool set that scales. And so whether it's eos or the seven attributes scaling up or even others, those are templates. And one size does not Fit all. And that's really, really important because in some companies you have fewer leadership team members and so you're going to start in a different place. And in other companies you have large leadership teams. And so the thing to do is look at, okay, do we need a daily huddle and why? Daily huddle is about synchronizing. So if you're a team of three or more, you might want to do it every other day or three times a week. It's got to fit the organization. And then for quarterly planning, to us that's almost non negotiable. Every company should plan every quarter. But do I need two days, a larger company or just a half day with a couple of us at a whiteboard going through an agenda? How did we do? What do we need to talk about and what are we going to do? And then put it on paper? But yes, the daily, weekly, monthly, quarterly, annually adapted to where the company is. And after you adapt it, then see how it feels right now, if it feels right, just keep doing it. Often you'll have to modify a little bit.

I love what I love about your tools. You can almost use that as a way to build out your agenda for those meetings also. You then start to go, great, and this is what we're going to cover on our annual or this is what we'll be covering on our quarterly. So as we move into the next attribute, which is customer, can you tell us a little bit about that?

Okay, customer is all about knowing who your ideal core customer is. And Bob Bloom wrote a book called the Inside Advantage and we draw upon that. And as Bob taught us years ago when he was even more active, the core customer is someone that you want to do business with that has specific attributes. But most companies think in terms of demographics as opposed to emotional buying drivers. And so it's really, really important. So what we recommend when you are setting your core customer, again, it's a tool, it's an exercise, it's a conversation, is start with your existing customers, print out a customer list, give it to your team members, whether you have eight or two, and independently circle your top three to five customers and then put them all up on the board together. And then say, why is Bob or Robert or Susie notice I'm using names, not company's names. What is it about them that we all are putting them up, that we want to do business with them? So you look into your customer base at real people, look at the patterns that you all are in agreement and then ask yourself, what is it about that customer that makes it a core customer. Often what we're finding is they're loyal, they refer, they pay on time, they pay our price, they're fun to work with, and they continue to grow. But sometimes there are other things about them and only the company can figure that out when they look at the data.

Yeah, perfect. This equally looks like a tool that you'd start off and go quite deeply on, and then you would need to think, where does it fall into that meeting cadence and how often you would review it. And I'm assuming it's probably something maybe more on that annual basis where you're planning out the year ahead with strategy and those things.

Yes, and. And that's exactly right. And one of the fun parts about core customer is we have several clients that once they have it nailed, they do everything from putting it colorfully on paper so they can look at it to putting a mannequin at their conference room table. And on it are the attributes of their core customer. And they start their meeting and say, okay, there's Susie. She's our core customer. And then they talk about it, and then they get into the business of the meeting.

Yeah, I love it. The next attribute you've got is profit.

So we look at revenue. Strategy drives revenue. So if a company's struggling with revenue, if it's flat or decreasing, often a strategy issue.

Okay.

When you look at profit, if your revenue is good and your profit is weak, it's usually an execution issue. So strategy, revenue, and then execution drives profit. And so a couple of things on profit. One is what are your competitors driving and profitability, both at the margin, gross margin level, as well as at the net income level, net operating income level. And then see where you sit in that. And first see which execution tools, rhythms, priorities you can use in order to increase profit by increasing, improving execution. That's the first place to look. But the other thing we're finding more recently is a lot of companies don't have a pricing strategy and they haven't increased price or modified price in a while. And so kind of what the research is showing right now, don't forget to look at your pricing strategy and your pricing and. And do some testing on that.

Yeah, perfect. And then equally, again, do the deep work, get it done, and then put it into your meeting cadence. I think that's really the big takeaway from what I'm getting from our discussion is thinking there is this overarching system as far as when you're going to be having your meetings and when you're going to be covering certain topics and prior to that there's. There's going to be a point where if you've got some troubles right now, lean into that attribute, go deep on it to solve that, to get it up to a certain standard, and then you slot it into your meeting cadence to make sure that you're constantly addressing it.

Yes, very well said. That is spot on.

The last one that we've got is actually the systems, so I'd love to get your take on that. I know you're a systems guy and how do you think about systems?

Well, when, when I think about systems, I always kind of dotted line back to execution too. Because systems and execution, they are like brothers and sisters. They live in the same part of the business, so to speak. So when I think about systems, when I think of a small company, I think about, have they put in place a written strategy, do they have the right talent, they've gone through the attributes, and then once they get their flywheel turning and things are going pretty well, stepping back and then asking, what can I systematize that is fairly routine, could use process improvement or technology so that I can take the resources there and redistribute those in the company to grow. And so literally what we recommend is stepping back with your team, looking at the broad scale of your top 10 core processes and then ask yourself, which ones have we literally physically written down and can look at them and see them charted out with what their outcomes are and their measurables and then taking a different colored pen and as a team saying, okay, how do we systematize this? How do we attack this to systematize it so it takes less energy, less cost, has a more consistent yield. And that is an ongoing dynamic loop. And that's what I love about our relationship. You've got the tools, the experience and the perspective and mindset that to really make that sing in the world of.

Systems, definitely the thing that I automatically default to is this idea of how do we make it recur? Like, there are plenty of great things that go on in a business and the business owner is great at coming up with great ideas. Sometimes they'll implement some of them and then they'll forget how great that idea or that thing or that task worked. And they don't make it recur, they don't capture it. They don't make it possible for other team members to deliver to a same standard by saying, well, this is the way that we do things here. And that what I love about the work you've done here with the seven attributes is it is a system and it is an operating system that a business owner could apply. And it goes quite deep. And you cherry pick the systems that are going to have the most impact for you in that moment. But then it's also a tool that can grow with you as you keep dipping back in and going, great, well, what's the next tool that I need to solve this problem? So I can see the systems thinking just built into this model. I don't know if that was a conscious thing or whether that's just the way that you do things.

Well, I think it was both. It was part of my DNA. But also as a trained engineer, I like to look at things and say, how do we make it faster, better, cheaper and automatic? So when I built the seven attributes, I was very careful over two years to ask, how can we systematize, how does it tie together, how do we measure and how can we use it from a startup all the way to a larger company? And so all that was very, very intentional. There's no doubt about it.

I'd love your perspective also on the topic of systems, but also very relevant to the revolution that we're seeing right now in AI and the part that it is going to play in small business. I'd love your perspective on just the topic. I mean, you can head in any direction that you like, but we're definitely seeing huge changes and I feel like we're only starting to scratch the scratch of the surface.

Yes. And our coaches get together once a year in November and that's a few months back. We had a conversation around this and it's going to change. But one of the questions is now, how do we use AI today to improve what we're doing, but also to learn. And so every company we work with, we encourage everyone on the leadership team to be learning, reading articles on AI, both where it's going, but also use cases. Use cases, solve problems in other industries and businesses. And the more we read about those, the more the lights will go off and say, hey, I think we could do that here. But thinking of AI, when we talked earlier about, hey, every company should know their top five to ten companies core processes, chart them out physically, and then using AI, one thing you can do is look at them and say, hey, this is highly routinized. This doesn't need as much human labor or intellect. Let's figure out how to take this portion of this process and let's unleash an AI app or an AI process on this and we see that in three areas today. One is in the human resources area around people. Another one is in the marketing area around content competitive analysis. And then the other is just around shortening, shortening cycle times on process. So a process that may cost, you know, $500,000 to yield $1 million now using AI, it costing $400,000, they yield $1.2 million. So the process, the people in the marketing content are three very good use cases. I would encourage everybody, company, every company be saying, hey, which of those three could I actually apply AI to?

I'm a little bit biased, I know when it comes to process. And one thing that I see though is I feel like process is going to only become more and more important in this AI world because feel like process ends up becoming the programming for the machine. You get very clear on the outcome that you're looking for. You're defining how you want it done and whether that's executed by human or by machine or a little bit of both. You have to first clearly articulate what that process is. So I feel like process moving into the new age that we are is perhaps the best thing that a business owner and their team can be working on as far as prioritization. I don't know if that's something you would agree with.

Yeah, no, I totally agree with that. I think is the company that is moving quickly in the future understands their strategy is putting a lot of effort in building an incredible attractive culture and is documenting what, what really works.

Through.

Documenting processes and then attacking them. How do we make it better, faster, cheaper, etc. So, yes, strategy, culture and process are like three really big things out there right now.

Yeah, perfect. I think, I mean, we can go really deep into the seven attributes. We kind of did high level at the moment. I'm going to make sure we include a link to the checklist that we talked about. And I think that document will help a lot of people just analyze their own situation, think about their next move or two. But if people want to go a little bit deeper with the work that you guys do at Gravitas, where's the best place to send them?

Yeah, I would say start with. If you go to Amazon and take a look at the seven attributes of agile growth, it's a monograph a little bit about the history there. In reading and research, we found that people that lead companies typically get through 2/3 of the way through a book and then they give up. Okay, Traditional book, okay. It's neither good nor bad, it just is. So we wanted to write something that could be read on a 90 minute flight from, let's say, Melbourne to Brisbane. If I'm close on that, maybe a little bit more than that, but you can read it in 60 to 90 minutes. But most importantly, in the back of the monograph seven attributes of Agile Growth are some links for tools as well as there's a bibliography of the content and the books and the research that have really underpinned the seven attributes. So it's a really good bibliography, tells a good story about seven attributes and gives some actionable tools that readers listeners can click upon.

Perfect. I'll include a link to that as well. I think what I like about the book I've got my copy is it's useful and complete and that's the type of books that I like it out outlines the full framework. So Keith, a huge thank you for your time today. Always. You're very generous with your knowledge as well. So thank you for that and looking forward to chatting again soon.

Okay, likewise and great to be with you again, David.