Tom Bouwer | What the Heck is EOS?

Tom Bouwer 9:06

Yeah, so in any business, you have a couple of really key economic drivers. And one of the things I looked for in those different countries was what was the one or two numbers that really would drive overall results. And what I got to, after some experimentation for about six months, is I had 600 sales people. And what it came down to was their activities per day. And so as they hit eight meetings per day per person across 600 people over an entire week, then I knew we’d hit our revenue numbers three months down the road, and if they fell below that number, then I had two and a half months to come up with a plan to make up for a revenue shortfall. But it wasn’t immediately obvious. The question I had asked myself is, what truly is the profit driver for this business in this country? And so my challenge for your listeners would be yes, you have a scorecard or a scoreboard or dashboard call whatever you want to KPIs metrics measurables. At the end of the day, though, what’s the one thing that you’re really driving where you measure x, or profit per x? What’s that one thing? Is it profit per person, profit per some activity measure? I like activity measures, because they tend to be leading and not lagging indicators. But it took me about six months to really come up with that and get to where I have a good number. And you know, John, I’ll, I’ll add this in as well, is that when people are coming up with their scorecard, scoreboard, metrics, whatever, they think they have to get it right the first time, they think it has to be perfect, when in actuality, it’s an iterative process. And you just need to start looking and looking more importantly, not as it is this week. But what are the trends? And when you put those two things together, profit per act, that one number that really drives your business, and then the trends, you can really make a lot of change happen.

John Corcoran 11:24

Yeah. I want to ask you about founding three companies. So you leave the corporate world, the executive path, and you go and start your own company in Istanbul. And you actually looked around and saw that they didn’t have much of a market for coupons and direct mail. So you kind of introduced coupons to the Turkish market and talked a little bit about how that came about.

Tom Bouwer 11:48

You know, so it was interesting. So one of my friends worked for fast moving consumer goods, companies like Gillette, Procter and Gamble, etc. And they were complaining that the retailers in the US, Kroger, Publix, Piggly Wiggly, whatever happens to be in your area, wouldn’t accept the same barcode. And so I realized that there was a gap in the market as a couponing side, but then importantly, the average person at that time got seven to nine pieces of mail a month. And when, you know, think back 20 years ago, how much junk mail you are getting. But if you only got seven to nine things a month, and you Yeah, yeah, you opened them, because they obviously were important. And so we realized we could put those two gaps together, we could get all the retailers to extend except the same barcoding system. And we could use direct mail or junk mail, you know, as the vehicle to get those coupons out to people. And in the US, if you get a point 1% return on a coupon that’s considered good. Our first mailing we were getting 20 to 25% returns, wow, on our first mailing on believably successful because people just weren’t used to getting things in the mail that could save them money, right. So that’s how we came to that. But it was really about putting two gaps together and filling them

John Corcoran 13:29

Was it harder to start a company in a country that wasn’t you weren’t native to?

Tom Bouwer 13:36

Oh, incredibly difficult. I didn’t know the laws. I didn’t really speak the language. And so I was very fortunate to find a Turkish business partner, and another American who understood and had been in Turkey for a while to partner with and the three of us really started the business together, but I couldn’t have done it without okaasan being my business partner, and helping translate the laws into what we could actually do.

John Corcoran 14:09

Got it and you end up starting two other businesses while in Turkey. One is importing women’s shoes because you saw again a gap in the market. And then the other ones exporting Turkish carpets, which you found you can sell at a much larger markup in the US market. So how do you end up going into those completely different types of businesses?

Tom Bouwer 14:33

You know, again, it goes back to identifying the gaps and you know, as I was going through the Capella char share the Grand Bazaar for those of you who have been to Istanbul, I just fell in love with carpets. And I noticed that people were coming in and selling them for 500 bucks, and I could bring them to the states and sell them for 10,000 and the same with women’s shoes. I noticed that they were getting styles, they were a year behind Europe. And I could go directly to Brazil and get the styles a year ahead of time. So it was more of just keeping my eyes open as I was going to different stores and looking at things that those opportunities just came up. And, you know, the carpet business was, it really came out of my love for carpets. But also because I was willing to put in the work. I worked for free on Saturdays for a year at a carpet store. And that means that you’re basically folding and unfolding about two tons of carpets a day. Wow. And yeah, I’m fascinated by that. So you

John Corcoran 15:47

at one point, you’re, you’re taking a $100 million business to 200 million. And a couple of years later, however, many years later, you’re working in a carpet store folding and unfolding carpet. Yeah, actually, I was doing both at the same time. And so when I was in town, were you just so committed to learning the industry that you were just willing to put in the effort? Is that why you’re doing that?

Tom Bouwer 16:14

Yeah, I mean, that’s pretty much it is, you know, you have to be willing to put in the dirty work. And for those of you entrepreneurs out there, you know that when you started your company, you had to do everything, and you had to get in and get dirty and get messy. And that’s what I did. And you know, I did it, because I loved it. And then like many of your entrepreneurs, John and listen to you, they started a company because they loved it. And then it actually turned into a real company. And they’re like, Holy smokes, I can actually make money at this. Yeah. And that’s kind of how it happened.

John Corcoran 16:53

Yeah, I love to hear stories that people that you know, you’re not sitting on, you’re not resting on your laurels. You’re not like in coast mode. Now that you’ve hit some point, you’re back, hustling back, putting in the hard work, putting in the hours, putting in the time that it takes to learn the industry. I think that’s so cool. Let’s fast flash forward a bit in your career to the present day. And you literally wrote a book that was titled, What the Heck is EOS? So I’ve had on you know, I had Mark Winters and Gino Wickman, great pass gas and many other certified EOS implementers. But for those who haven’t heard of EOS, can you give us the, What the Heck is EOS?

Tom Bouwer 17:37

Sure, very simply, every business needs an operating system, which is how do you set priorities? How do you harness your human capital? How do you solve issues? And EOS really revolves around six key components. Vision, which is everybody aligned on the same page going the same direction? People as Jim Collins would say, Do you have the right people in the right seats data? Are you looking at the right numbers issues? How do you strengthen that issue by solving muscle processes? probably my least favorite and therefore most ignored, key component, which is how do you systemize what you do every day so you can scale? And then finally, my favorite component which is traction? How do you get that rhythm that cadence that harpy going in the organization where you’re just taking a little bite to the elephant every week? Pretty soon That one’s gone. You’re on to the next elephant. In a nutshell. That’s what EOS is. And more importantly, that’s what an operating system is. And I would encourage your listeners that if you don’t have an operating system, you need one, pick one. If you choose EOS, great, you will make me happy, and I will thank you. But you need to have some systematic way of running your business. not waking up in the middle of the night putting things down on a scratch pad. That’s all I got.

John Corcoran 19:08

I mean, that’s it. That’s What the Heck is EOS?, in a nutshell. And tell me about how you discovered EOS to begin with? Did you read Traction and just fall in love with it? Was it? 

Tom Bouwer 19:18

No, no. Um, so I was working with a group called Ownership Thinking, which was founded by a guy named Brad Hams who wrote the book by the same title. And that was all about how do you teach employees about the business of business? How do you create the right incentive plan for an organization and get everybody kind of pulling together in the same direction, and about 50% of the time it worked really well. And 50% of the time, it didn’t. So a colleague of mine and I decided to look into what was going on with that 50 percent where it didn’t really work. And what we found is that when it was fizzling out, if you will, it was because the leadership teams were not on the same page, they didn’t have a good operating system, they didn’t have a good cadence. And so that led us to look for an operating system. And we picked the EOS because we felt it was the most holistic, you know, working on vision, traction and health, how do you have a healthy team? And the other was the simplest. And, you know, as we started to use some of the tools in Traction, written by Gino Wickman, we started to see great results with our client. And we thought, you know, hey, if we’re getting such good results, maybe we should do this full time. So we converted over to teaching us full time. And that was about eight years, and 250 companies ago and over 1000 full day sessions with clients. And I can just tell you that the changes I’ve seen have really, truly been dramatic, but it came out of that background of teaching employees about the business of business. And that’s how I got to the US.

John Corcoran 21:18

And tell me about how you go from being one of hundreds of certified implementers for the system to actually partnering with the guy Gino? Who wrote the book, who created the system and who wrote another book. What the heck is EOS? How did that end up happening?

Tom Bouwer 21:40

Oh, you know, I again, I noticed the gap in the market and EOS was exclusively focused on the leadership teams. And honestly, that’s where they should be focused. But they weren’t great at helping roll that out in that system to the rest of the company. And so Gino and I talked for about two years, about how we would create something to help roll that down in the organization. And the result was What the Heck is EOS?. Now, there were many, many discussions between Gino and I as to was this part of their core focus. Would this be helpful with the book? Would people use it? You know, but at the end of the day, we wrote it a little bit like the Cliff’s notes version of Traction. So if you want an hour and a half read, then that’s your read, it will give you the basic fundamentals and concepts. But it was really targeted at the mid level managers and below, so that they understood what the leadership team was doing. And then that would give the leadership team a guide to help or rule us out to the rest of the company. Because as you know, John, you know, it’s great if the leadership team is awesome, and they’re all focused on the same thing. And they’re healthy, and they get along and they’re a lot, you know, just making things happen. But it’s the other 100 people in your company that actually make their paychecks. And it’s those other 100 250 30 people that are out there in the field every day making things happen. And you can relate that to any different industry doesn’t really matter. But it’s your field staff, it’s your line people, your customer service people that really truly drive your profitability, and your long term customers. And that belief is what led me to that number I talked about earlier, which was eight activities per sales rep per day. I can measure all kinds of other things, you know, on a country by country or product by product basis. But what I came to realize was that those are the people that have feet on the street that are talking with potential customers, they’re making the sale or they’re not. And so I kind of equate everything back there. And that’s kind of how I get to those numbers. And that’s why we wrote What the Heck is EOS?. That’s great.

John Corcoran 24:29

That’s great. I love how you do the same thing you did as an entrepreneur as you do as an author. So basically looking for the gap in the market, whether it’s a book or whether it’s creating a business from scratch. I want to wrap things up because we’re almost out of time. two last questions. Number one, I’m a big fan of gratitude. So as you look around at your peers and contemporaries, however you want to define that, who do you respect who you admire is out there right now.

Tom Bouwer 24:55

Well, obviously, you know I need a huge shout out to Gino Wickman, the founder of EOS, and just the mentoring and coaching that he’s given me and the opportunity to really, you know, fill my, my role in the universe to use my unique God given talent, you know, that I hadn’t really found before. So he was instrumental in helping me find that, and then really living the life that I live. Now, I’d also have to give a shout out to Brad Hams, who wrote Ownership Thinking, because that really got me in touch with the employee side of the business. And it’s very easy to sit in the executive suite, and not really think about how the employees are thinking about the business on a day to day basis, or if they even are, because in most cases, if you survey your employees, as an owner, or entrepreneur, your employees think you have a money tree in the backyard. And you just go out and shake that money tree whenever you need some more cash. And then, you know, my colleagues, we have a small group called the honey badgers, and just give a shout out to them for coaching, mentoring me, and frankly, calling me out and having hard conversations with me when we need to. So those would be just some people I give a lot of gratitude for my success to the honey badger that

John Corcoran 26:25

sounds like an informal thing, or is that a formal thing?

Tom Bouwer 26:29

Oh, it’s completely informal, completely informal. They know, it’s just a group of engineers.

John Corcoran 26:36

Is there anyone you want to mention? Give them a shout out? Or website or company name or anything like that?

Tom Bouwer 26:40

Or is this no society tech thing? No, it’s not a secret society at all, but they’re all EOS implementers. And, you know, you can find them. They won’t say honey badgers, but they’re the top people. And they know who they are. And this more for me giving them accolades than any type of shout out for them, or any type of business.

John Corcoran 27:05

Alright, last question, looking backwards in your career. So looking back, you know, let’s pretend we’re at an awards banquet, much like the Oscars of the Emmys. you’re receiving an award for lifetime achievement for everything you’ve done up until this point. And we all want to know who do you think will initiate family and friends? Of course, we always think about them but you know, who were the mentors? Were those the teachers? Who were the coaches? Who are the business partners, where the investors are the people that you would acknowledge in your remarks?

Tom Bouwer 27:34

Well, you know, first would be the people that I already mentioned. You know, from a business standpoint, Gino, the honey badger, Brad Hams. You know, I probably would also give a shout out to the four people that fired me on four different occasions. While we didn’t even get that, yeah, a great learning experience for me. And it was what I needed to move on to bigger and better things. And every time I landed on my feet, and became a better person because of it. So I’d give a shout out to the four people that fired me. I’d also probably, I’m gonna have to say this in context, to my father and my mother. You know, a lot of people will do that. But my father really educated me on business, to the point that when we would do family road trips, and keep in mind, this was back when people didn’t fly, you drove on a family vacation. We would listen to Peter Drucker cassettes in the car, and we would get quizzed afterwards. So I’m not saying they were the most fun road trips when you’re 10. But I certainly learned a lot. Get him started with that. Yeah, absolutely. You should. You know, and then, you know, obviously, I’ll thank my mom for her keeping me involved in music, which led to my being overseas many times before I got a job overseas. And so it was an easier adjustment, having traveled the world, multiple times, like 10 times when I was 21. And then finally, my first boss, Chris Christie. And whereas my father taught me the hard side of business, he taught me the human side of business. And so if I were doing a Lifetime Achievement Award, it would be all of those people combined. Plus a few that I’ve probably forgotten in the 30 seconds I had to write down some names.

John Corcoran 29:51

Perfect, perfect, Tom, this is great. Where can people go to learn more about you?

Tom Bouwer 29:56

They can go to, they can find more there. They can also email me at [email protected]. And either myself or my assistant will get back to you. Please keep in mind that my time on the phone is always free for anybody associated with John. And so if you have questions, you want to talk a little bit, you know, just please give me a shout. My cell is 616-635-9900. Same thing. Send me a text. Hey, I’d like to connect. And we’ll go from there. 

John Corcoran 30:36

Excellent, Tom. Alright, thanks so much.

Outro 30:45

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