There is a difference between keeping a business going and actually moving it forward.

That distinction came up in Part Two of my conversation with Mark about building and scaling companies. We had already talked about culture and the tendency entrepreneurs have to chase squirrels. The next three pillars in Mark's framework are execution, finances, and people.

Execution is probably one of the most overused words in business. Everyone can say their ability to execute is unmatched. But what does that actually mean?

Before Mark installed EOS, the Entrepreneurial Operating System, into our business, I went from task to task to task. The next thing I knew, it was a 15-hour workday without a cohesive plan tying all of those tasks together.

EOS gave us that framework.

Working In the Business and Working On the Business

Mark describes EOS as an execution model for small businesses to build and scale their companies. More importantly, it gives us a framework for doing something entrepreneurs struggle to make time for: working on the business while we are also working in it.

As Mark puts it, working in the business keeps the company going. Working on the business moves the company forward.

He uses his father's tax preparation and accounting business as an example. His father built an amazing company over roughly 50 years and did incredible work for many clients. But Mark does not believe his father ever truly worked on the business.

The company kept adding and bolting things on. There was always the next tax return, the next client call, the next client meeting. What was missing was the opportunity to step back and ask: Where are we going? Do we have the right people in the right positions doing the right work? What are our core values? Who do we want to target? How does all of this scale with where we see ourselves playing in the market?

That is the problem EOS is designed to help us solve.

What EOS Looks Like in Our Business

When I pushed Mark to move beyond the philosophy and explain what EOS actually tells us to do, his answer was rhythm and cadence.

We have scheduled times when the key team gets together to make sure everybody is aligned and rowing in the same direction. Mark and I had actually just come off one of our quarterly strategy sessions when we recorded this conversation.

We get off-site for two days and go through the vision for the company. What types of clients do we want to target? Where do we want to be in 10 years, three years, and one year? What are the key metrics we want to drive toward? What are the rocks, or goals, that have to be established to hit those targets? What is Mark going to own? What am I going to own? What are the blockers?

Then we bring that back into the business.

The goals we establish are tracked in our weekly L10 meetings. We are not resetting the strategy every week. We are checking whether we are doing what we said we were going to do.

That is how a 10-year vision eventually makes its way down to what we are doing this week.

It also helps with one of the realities of being an entrepreneur: there will always be another idea. There will always be another opportunity. We called those squirrels in Part One.

You can acknowledge the squirrel without chasing it.

Runway and the Financial Side of Entrepreneurship

The fourth pillar is finances.

One of the concepts Mark brought into The Owner's Asset from his experience in venture-backed tech is runway. In tech, runway is generally expressed in months: How much cash do you have available to operate the company without running out?

We are not venture-backed. We are not investor-backed. But Mark believes there is something valuable in that mindset, particularly for businesses with episodic or variable revenue.

So we adopted it.

Our goal is to build The Owner's Asset to 12 months of cash runway at all times.

That has been hard. Mark was very clear about that in the conversation. At the time we recorded, we had worked our way to roughly 10 months after setting the 12-month goal at the beginning of the year.

This is also where the framework starts to become tangible.

We set the goal during our off-site planning. Then EOS gives us a mechanism to track it. Every week in our L10, we get an update on where we stand. We measure our progress against something we decided was one of the most important things we could accomplish this year.

I think that connection matters more than whether another owner decides 12 months is the right number for their business.

We set a goal. We built a process to track it. Then we kept measuring it.

People and the Right Seats

The fifth pillar is people.

Mark's mantra here is simple: hire great people.

But the conversation gets more interesting when you start asking how you know whether someone is actually the right person for the organization.

For us, that starts before someone is hired. It starts in recruiting and continues through the interview process. But it does not stop once someone joins the company.

Mark talks about evaluating people on a regular, quarterly cadence. 

• Do they align with the core values? 

• Do they get it? 

• Do they want it? 

• Can they do it?

• Get it. Want it. Can do it.

And then: Do we have the right people in the right seats?

Those frameworks give you something concrete to evaluate. Instead of waiting until something has clearly gone wrong, you can sit down with someone and be transparent about how they are doing, where there may be a gap, and whether that gap can be closed.

That becomes especially important when the answer is that someone is no longer right for the organization.

Mark makes the point that leaders owe it to employees to make the company's values clear, show them where there may be a variance, and allow them to close that gap. If, over time, that proves not to be possible, then it may make sense to part ways.

He also admits he has not been perfect at this throughout his career.

That matters too.

Building a company is not about pretending every decision is clean and easy. Hiring people is hard. Letting people go is hard. Figuring out whether someone is the wrong person or simply in the wrong seat can be hard.

But avoiding those decisions does not make them disappear.

The Five Pillars of Entrepreneurial Execution

At the end of our conversation, I asked Mark to bring the whole framework back together. He calls these the five pillars of entrepreneurial execution.

Culture is the cake. Swag, shirts, and branded gear are the icing. Core values are the culture. That is the cake.

Do not chase squirrels. New ideas and shiny objects are going to appear constantly. Understand them, appreciate them, consider them, and stay focused.

Execution is the secret sauce. It is difficult to point to execution as a single thing because it is how the company operates as a whole, during good times and tough times.

Finances keep the company operating. Cash flow, income, and the ability to keep the company running also help keep founders and owners in the right mindset to execute.

People are the bedrock. Bring in the best talent you can to move the company forward. As Mark says, that often means finding people who know a particular part of the business much better than you ever could.

Those five pillars are not a theory we came up with for a podcast. They are things we are working through inside The Owner's Asset ourselves. Some of them we have gotten right. Some have taken time. Some are still works in progress. That is entrepreneurship.

This content is for educational purposes only and does not constitute tax, legal, or financial advice.