Comparing Business Operating systems and Management Frameworks: EOS, V2MOM, and OKRs

This is an excerpt from a conversation with Max Clark on his podcast, Hack Your Stack.

Max Clark: So to connect the dots a little bit here, there is this general awakening into EOS. The tech space has been on OKRs for a long time. There’s V2MOM that’s on the market. I think what's interesting about all these things is it really comes down to whether there is an operating system that you're adhering to and driving your business.

It's common that you're running Asana and you're trying to figure out how to implement and track OKRs, which Asana kind of shoehorns in, but chances are you're doing something else to actually track your OKRs. And, in the EOS world, you're maybe using the EOS tools or you're implementing an EOS template, and then you're trying to maintain what your rocks are in Asana, in ClickUp, or in Monday.com. Personally, we fell into this state where we realized that we were using Google Workspace, Asana, Notion, and this and that and the next thing. I ended up having a little freak-out. I was like okay, we're getting rid of Notion, and we're going to put everything into Google Docs going forward.

As companies are getting started, they’ve heard about EOS, and they’re wondering, how do people end up on EOS versus V2MOM?First off, what is V2MOM? What about EOS vs. V2MOM vs. OKRs? And is there a practical difference? What are you seeing? I mean, do people switch from EOS to another tool or from another tool to EOS? Is the same switching happening with these management tools, like from Monday to ClickUp to Asana?

Scott Levy: Let me take a step back and set the stage. I think it's important that we create a little bit of a difference in our thinking between the fundamental techniques and tools, and the methods that we use to get more results out of those fundamentals. When you understand that, it starts to get a little easier to slice and dice all these different options.

When you're writing, your fundamental techniques are your letters, your grammar rules, and your vocabulary. The frameworks and methods are how you take those words and put them together in a certain way to achieve an end, whether it’s a blog post, a podcast script, or a book. Then, you have systems like a series of books or a television series where things are getting into these bigger arcs and stories. So, each of those frameworks or tools that you mentioned - Objectives and Key Results (OKRs), or what Mark Benioff calls the V2MOM - each of those fits a little differently.

Starting from the simplest, [we have] OKRs. Andy Grove, who was running Intel way back in the day, took a framework that already existed called “Management By Objectives” and he tweaked it for his needs. He wanted something leaner, meaner, and faster, and one of his protégès, John Dorr, coined the phrase “Objectives and Key Results” for the system Grove developed. And then became the big proponent of it. He took it to his first big investment when he became a venture capitalist, and that was a little company called Google. They ended up using OKRs and that brought OKRs outside of Intel to the world.

I think of them as a goal-setting method. They're a way that you can align everybody by saying, “Look, here's what we're trying to get done. Here is our objective and here's how we're going to measure success (which are key results).”

Max Clark: OKR implementation will tell you to only have three: you have a product, you have sales, and you have people. Going down the OKRs implementation, how many layers of organization do you have within OKR? It’s like you have three, times three, times three, as you step down.

Scott Levy: I think that this is one of the problems with all these systems. When you start cascading things, there's a part of our brain that likes the idea that we can rationalize ever more objectives and key results and that's where you create just a complete cluster. You want to have like a set for your organization, maybe a set for each team - maybe - but cascading is where people spend a lot of time and piss each other off. I'm probably offending someone when I say that, but I've just seen it over and over and over.

What I like about V2MOM is you can keep things fairly simple and you can run pretty fast with it without worrying too much about the cascades. You just ask these questions:

• What are we driving?

• What progress are we making?

• Are we seeing our numbers move?

• Are these methods working?

The entrepreneurial operating system, or EOS, is very much a cohesive system. It's a framework of 22 different tools, and six different areas of the business, and they fit together in a cohesive way. With OKRs there is some structure that is put around it, but it’s left fairly open because it can vary so much with the size and stage of the business. EOS is very prescriptive, whereas OKRs and V2MOM came out of particular entrepreneurs needing to align their company.

EOS is very much developed as a consulting product, and it's very well done. There's an origin story around it: Gino Wickman is the founder, he turned his father's company around and did the same for some companies owned by his friends. What I think he did incredibly well was weave together a lot of great things from Jim Collins, from Michael Gerber, from Patrick Lencioni, and a lot of other very brilliant thinkers, thought leaders, and consultants with real-world experience. He wove them into a cohesive framework with his team, and then they created a system that says, okay, if you're the founder or the entrepreneur and you want to get out of the day-to-day operations of the business - which they argue very well that you should - here's how you do that. Then, you can take your business and grow it, or sell it, or whatever the case may be, but you no longer are the bottleneck. What we see in businesses as they grow from $1 million to $10 million to $50 million and beyond, is that in each one of those stages, the founder has to be someone different. You literally have to become someone else and I don't mean existentially where you aren't the same person you were, but with your skill set, the things you're concerned about, how you spend your time. You hear this again and again and again if you survey successful CEOs who've made the journey, or you look at what each company needs. So, EOS helps you of that original founder mentality, get structure around your business and create a thing out of the business that isn't focused on you.

Now, it's a lot heavier and there's a lot more to it. Even though you can start by implementing a subset of tools, they've coupled everything together so tightly that it can be difficult to unwind them and take them apart, but they've got a lot of great tools. They don't just have a goal-setting framework, they borrow Stephen covey's rocks idea. They make those goals smart and they've got a great framework for evaluating whether people fit your culture, and a great, great framework for doing performance reviews for a whole range of things. I really like their emphasis on the people, I really like their emphasis on running strong meetings and keeping the operating rhythms weekly, quarterly and yearly and really, really adhering to those. But, they're a lot more than just the goal-setting part of it.