How to Build a 7-Figure Recruiting Firm That Runs Without You — Inside the EOS System with Derek Pittak (Part 1: From Chaos to Clarity)

Benjamin Mena [00:00:00]:
Coming up on this episode of the Elite Recruiter Podcast.

Derek Pittak [00:00:03]:
As a leader, if you want to grow, you need to find the thing that you do well. Any leader should cling to that.

Benjamin Mena [00:00:12]:
It looks like eos. A huge part of it is traction and it's broken down into like 90 day blocks. Why is that?

Derek Pittak [00:00:19]:
It's because most people can't focus for longer than 90 days. The wheels start coming off. Welcome to the Elite Recruiter Podcast with your host, Benjamin Mena. We focus on what it takes to.

Benjamin Mena [00:00:33]:
Win in the recruiting game. We cover it all from sales, marketing.

Derek Pittak [00:00:38]:
Mindset, money, leadership and placements.

Benjamin Mena [00:00:44]:
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Benjamin Mena [00:01:06]:
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Benjamin Mena [00:01:35]:
Nothing but faster shortlists, better hires, and more time to focus on what actually drives revenue. Atlas is your personal AI partner for modern recruiting. Don't miss the future of recruitment. Get started with Atlas today and unlock your exclusive listener offer@reruitwithatlas.com I'm excited about this episode of the Elite Recruiter Podcast because here's the thing. Recruiting is absolute chaos. And how do you control the chaos? By his systems. And everybody talks about these systems, but nobody actually explains what the systems are. It's like this magical thing that I've been trying to get some of the podcast guests to share.

Benjamin Mena [00:02:07]:
You say it's a system. What do you actually mean? And that's why I'm excited about this guest. This guest has implemented a system called EOs into 40 different staffing companies. And here's the crazy thing. He wasn't even in the recruiting industry at first. He fired a client that cost a client $5 million in revenue. And that turned into how we got into this wonderful world of misfit toys. Recruiters staffing associates.

Benjamin Mena [00:02:33]:
So I'm excited to have Derek on the podcast. Derek, welcome.

Derek Pittak [00:02:37]:
Hey, Ben, thanks so much. I am very excited to be here. Anytime I hear about staffing, my eyes light up. And then pair EOs on top of it, I get pretty excited even more. But yeah, thanks so much for having me.

Benjamin Mena [00:02:51]:
Real quick, before we do the deep dive and how you ended up in this wonderful, crazy world that we call staffing and recruiting. Quick 30 second self introduction.

Derek Pittak [00:02:59]:
Yeah, awesome. So 30 seconds introduction. I don't know if I have that, if I can do it in that amount of time, but really, at the end of the day, right. I spent the first 10 years of my career connected to the military, Department of Defense, not an entrepreneur by trade or by a young age. I wasn't one of those guys. But ultimately got there through my time in the military, working for a large regional bank, fell into staffing, was promised this wild ride, and became an entrepreneur from there. Right. And certified a US implementer and eventually a CEO of a staff company.

Benjamin Mena [00:03:29]:
All right, we're going to have some fun here. So we will start talking about EOs in a bit. First, most important question. How did you even end up in this world, especially coming from DOD and the Pentagon?

Derek Pittak [00:03:42]:
Yeah. So that's an interesting question. I had planned to be a lifer in the government, do my 30, 40 years and, and have a pension. And I left that job six months before I was eligible for my pension. I was 30 years old and I was really just fed up, right, with the machine and feeling like you're a cog. You don't know why you do what you do, how it's impacting anything. And you sit around and see a bunch of people doing nothing. Right.

Derek Pittak [00:04:10]:
And so that's. Right. I'd say that publicly of just fraud, waste and abuse. Right. But we're not here to talk about that. But that led me to the banking industry. So I went from one bureaucratic machine to another very large bank. This was after Frank Dodd, after the collapse of the Great Recession.

Derek Pittak [00:04:28]:
Right. And so now coming into that, about around a bunch of compliance. How do you get things done? Well, it doesn't happen fast, but I was asked to turn around how the bank bought and managed staffing. And the bank spent over $125 million at that time. So I had to really dive in, learn the industry, met a bunch of local owners and our vendors, right. That were supplying temporary associates to us or contingent labor to us. And that's how I really got into it. And that was kind of what you meant in the intro is one of the local providers who was supplying us a decent amount of labor and managing a decent amount of labor for us and ultimately had to fire his company from our account.

Derek Pittak [00:05:06]:
And what we found right is we built a relationship and a level of trust. Six months later he called me and said, hey, I need someone like you. Would you consider jumping over to the dark side and would you consider coming into an entrepreneurial organization and making a difference? And he talked about staffing in a way that I never heard before. And I had always thought that the staffing industry was a notch above used car salesmen. And so if you think about it, right, kind of sleazy, slimy, don't really want to deal with it, whatever metaphor or vision you have in your head. I thought staffing was very similar and I had some bad experiences, but ultimately working with Aaron Grossman, and I'll say his name and name drop, he has this beautiful way of looking at it. And it all relates to unlocking people's potential. Like helping people, right, achieve whatever they want to achieve in life.

Derek Pittak [00:06:00]:
And that could be helping them put food on the table, helping them pay medical bills, helping them earn a degree, help them get hired on full time, whatever that may be for that particular person. You're helping them unlock their potential. So just a super cool story. And he promised me this way to make a difference in people's lives. And I was like, that's pretty cool. I'm a service minded person. So I took that leap of faith. And then one year later, here we are, I'm running his entire corporate side of the business.

Derek Pittak [00:06:28]:
It was a pretty cool story.

Benjamin Mena [00:06:29]:
I gotta take a few steps back. First of all, how big? Big this staffing recruiting company.

Derek Pittak [00:06:34]:
Yeah. So this company name, Talent Launch was a portfolio of organizations all under a common ownership right through Aaron. And at my time, we were about 125 million in revenue and had 10 different brands underneath our parent company.

Benjamin Mena [00:06:50]:
And you're in this, this safe job. Like, I mean, there is no safe job and especially in the banking industry, but it feels safe. You're in charge of this gigantic program, $125 million in staffing. What was the one thing that he said? Was it really just the opportunity to make a difference, like what got you?

Derek Pittak [00:07:08]:
Yeah, I think it was, you know, at the end of the day, we're going back quite a ways at this point, but you know, at the end of the day, I think the opportunity to make a difference, right? To be part of not just making A difference in people's lives we put to work, but making a difference for the organization. Right? Remember, I'm working for multi billion dollar organizations with thousands of employees, and you're just doing the work. And he said, derek, come join my team, be a leader in my organization and we'll do great things together and you can help transform this organization with direct, immediate impact. And that was something I was wanting and craving. Right to where, okay, I'm no longer just this person and a CEO, one of 10,000 employees. I'm one of 100 employees who gets the opportunity to help steer and guide this organization to where they ultimately wanted to go.

Benjamin Mena [00:07:58]:
Okay, so was this before you read the book Traction?

Derek Pittak [00:08:03]:
Yes. Yes.

Benjamin Mena [00:08:04]:
Okay, so you, you walk, you, you say yes. You're like, okay, I'm going to go jump off this cliff into the wonderful world of recruiting and staffing. And what was the first biggest challenge that you ran into as soon as you made that jump?

Derek Pittak [00:08:19]:
Being a veteran, being in the military. My first day that I woke up in boot camp at 18 years old, I was like, what the hell am I doing? Why did I do this? I want to go home. And you might have made a phone call to try and go home, and they're like, what are you doing? You're crazy. Got over that pretty quickly. But it was that same exact feeling was like, holy cow. This entrepreneurial, chaotic organization. Like, I was probably a month in and was like, why did I do this? I'm like, oh no. I might have made a major mistake.

Derek Pittak [00:08:49]:
This is a complete disaster. And that's exactly my thoughts. So I rose rev, reminiscent of earlier in my life.

Benjamin Mena [00:08:57]:
Okay, so they gave you a promotion almost a year later to literally COO of the entire portfolio. What the hell did you do in that first year to make that kind of difference?

Derek Pittak [00:09:06]:
Clearly, I impressed somebody. So, you know, Aaron and I, you know, and I had an opportunity. I was leading all strategic projects. My role was to come in and, you know, lead all strategic initiatives for the organization. So I did that with everything that we had on our plate in that year. Whether that was integrating an acquisition. Right. Whether that was building out a new corporate headquarters, whether it was helping implement systems that we were putting in place technology.

Derek Pittak [00:09:34]:
So I did that pretty quickly and got to know the leadership team really soundly, built an amazing rapport with them. And I think one of the things that had changed was that I was just asking questions that nobody was ever asking before. Right. Remember, a staffing company is made up of recruiters and salespeople and if you're large enough, potentially some back office people who are doing payroll and arap, like, that's it. And the owner operator is the strategy guy. And I was coming in asking questions that nobody, you know, other than maybe the cto, right? The head of hr, you know, the CFO and Aaron, you know, that was the team. And I was coming in asking questions that they were asking. And that really built a level of trust with Aaron that I could take on a bigger role in the organization.

Benjamin Mena [00:10:18]:
What were some of the biggest changes that you made within that first, like with the first year and also while.

Derek Pittak [00:10:26]:
You were there, you know, I would probably relate to. The biggest change really happened when the CTO was asked to leave. And that's when Aaron asked me to step up. And he said, hey, I want you to step up. You need to prove yourself. We're not going to announce this promotion. You need to start acting like it, though. And I'm not going to pay you a salary increase for another eight months until I know that you're the guy.

Derek Pittak [00:10:54]:
Right? So I remember the phone call and he's like, are you ready? And I was like, yes, I'm ready. And even though I wasn't ready, right, because no one's really ready to do something they'd never done before. It's just a matter of risk and work your butt off to learn and grow so that you can overcome and break through those ceilings. So it was really at that time, that's when we found eos. Right. That's when we found traction and started down that path. And I was instrumental in having a part of leading that implementation with all of our organizations under our portfolio.

Benjamin Mena [00:11:27]:
So you were able to implement EOS into every single portfolio company?

Derek Pittak [00:11:33]:
Yes.

Benjamin Mena [00:11:34]:
For the listeners, like the people listening, what did it look like before and what did it look like after the transformation?

Derek Pittak [00:11:41]:
Yeah. So I think that one of the biggest benefits for an organization like Talent Launch in the early days of implementing eos was around consistency and communication. Right. Using the same language, creating a common language. Right. Common scorecards. That was a huge benefit. So remember, tying in a culture, transparency across that maybe some people have never seen before in one particular company or another.

Derek Pittak [00:12:09]:
So they had bought a handful of companies by that time. And this goes back to 2016, 17, where you're trying to integrate multiple cultures, you're trying to integrate multiple processes. Right. Multiple language barriers. And it's staffing and recruiting. And people have different scorecard numbers. Right. And different measurables they think are important.

Derek Pittak [00:12:29]:
Right. And you say submittal and someone says submission, you think they're the same thing and they're not. And so that was a massive benefit, right, in getting everyone aligned to a common vision of where we wanted to take the organization. And what we did, though, that was really unique and cool. We allowed under each portfolio company, you had the parent company vision, but they can create their own vision for that company as long as it tied to the grander vision of the overarching organization. So there were elements and components that we allowed each company to make their own, but having to follow a separate set of governance guidelines, if you will, almost like a private equity firm type of setup, but it wasn't. So that was a huge, huge benefit in getting that established with the organizations. But it came with a lot of challenges.

Derek Pittak [00:13:13]:
And we did use an EOS implementer, right? We had someone like me that I got to sit and learn from and watched him do all these implementations with these organizations. And then I was helping the organizations execute what the implementer was teaching us, if that makes sense.

Benjamin Mena [00:13:28]:
Okay, before we jump over to the next part of your career, like, is there anything else that you want to, like, cover there or.

Derek Pittak [00:13:35]:
No, no. Talent Launch is still doing amazingly well, still growing. And, you know, Aaron's become quite a mentor of mine now that I'm back in staffing. He's just told me to stay out of his backyard. So. Well, I.

Benjamin Mena [00:13:46]:
Okay, so I gotta ask you this, like, you left Talent Launch. What did you end up doing next?

Derek Pittak [00:13:54]:
Yeah, so I left Talent Launch to pursue, you know, a passion of mine which is helping entrepreneurial leadership teams get what they want from their business. Right. And that really became eos. And so I had the front row seat for three years of watching an implementer work with all these different organizations. And, you know, in my mindset, as The COO at TalentLaunch thought, wow, we could do this a lot cheaper if I just learn how to do this myself. We're paying this guy 10 different sets of session fees and agreements with all of our organizations. I'm adding this up in my head and I was like, holy cow, that's one C level person that we're paying this guy to to do this with these organizations. So I raised my hand and said, hey, Aaron, I want to go get certified on teaching eos.

Derek Pittak [00:14:41]:
I'm going to take it over from this guy. I'm going to do it. And then, hey, what if I become our implementer, step out of the COO seat and then we start a business together selling this to staffing companies and he's like, I love that idea. Being a visionary, he's like, I love that idea. Well, let's find, do that and find your replacement and we'll be good to go. So, so we went down that path and, you know, it worked really well. But I found out how hard it was to scale on your own, right? You become as a solopreneur, right? You start a brand and you become the sales rep, you become the delivery guy, you become the relationship guy, you become the finance guy, right? The customer service, the ar, you become it all. And you know, quickly finding out that Aaron and I wanted different things as this thing started to scale, right, I started to see some success.

Derek Pittak [00:15:26]:
I started adding some clients to the book. It was a great platform to take off and launch from because I had the ability to learn and start doing it with our internal companies before I ultimately started delivering for outside organizations. It worked beautifully. But about a year in, I bought Aaron out and said, you want different things from this. I want different things. Let's be friends and let me buy you out. So that's exactly what happened.

Benjamin Mena [00:15:50]:
And down the road you got pulled back in.

Derek Pittak [00:15:54]:
Yeah, I certainly did. Yeah. So jumping there, right? We could, we could fast forward a whole lot. And in over five years, I ran my US practice and I loved it, and I still love it to this day. I still do it on the side today with a handful of clients that I really love working with. And you know, during that time, during that five year span, I worked with over 40 staffing companies and it was wonderful, right? And I think that the beauty of, not that I meant to create a niche, but it just naturally happened, the EOS staffing guy. And I'm like, well, that's not a thing. And I'm not here to teach you about staffing, but I'm here to teach you how to implement EOS and what that even means to your business.

Derek Pittak [00:16:34]:
But they felt a lot of comfort while you understand our business. And so we don't have to spend a lot of time teaching you. And every now and again you can take your EOS hat off and answer a couple questions. So that really, you know, propelled over the next five years. And one of my earliest clients, a guy named Brad Gillespie of Lingo Staffing, he said, maybe one day we could work together. And I said, sure, let's talk about it. And that was just, you know, went away and I had a couple of clients asked me to come into their business, did a little project work, and then ultimately decided, you know, I'm not gonna. I don't wanna do this again.

Derek Pittak [00:17:05]:
You know, I love what I do. And Brad just probably picked up on that more and more, and he wants to get what he wants, as most visionaries do, and, you know, made it very appealing for me about two and a half years ago and said, hey, I really, really want you to come on board, and I'm gonna hand you over the keys. You're gonna be the CEO. You have full decision rights. I want to step out of the business and let you, you know, make it your own. Just grow the dang thing. And. And at first, I wasn't really in tune with it, and then the more we talked, the more I thought about it, the more we constructed what the agreement would look like.

Derek Pittak [00:17:39]:
There was a lot of trust built there and a friendship that was built there. And, you know, the greatest risk was losing my friendship with him. And I told him that. And so, you know, he promised that wouldn't happen no matter what if we broke up. We'll do it amicably and all that fun stuff. And so here I am, two years later, into that role in. Back in staffing, trying to grow a light industrial staffing firm.

Benjamin Mena [00:18:01]:
And you guys have how many locations?

Derek Pittak [00:18:04]:
So we technically have our website maybe out of date, but we're at 14 locations. We sold one of our branches, and we have 50 internal employees. And so we're about a $40 million staffing company.

Benjamin Mena [00:18:16]:
And you guys run EOS there, I presume, right?

Derek Pittak [00:18:19]:
Yeah, yeah. As best we can. Right? As best we can.

Benjamin Mena [00:18:22]:
Before we jump into Eos, is there anything else you want to cover about your intro story into this wonderful world?

Derek Pittak [00:18:27]:
No, I. I'm good. Thank you so much for. For asking.

Benjamin Mena [00:18:30]:
So for those listening that are like, what the F is eos? What is eos?

Derek Pittak [00:18:36]:
Yeah, and there's actually a book that's called what the Heck is Eos? So I love that. And. And I didn't realize that. And it is. It. It's a. It's a. A fairly short book with very large fonts, so even the most ADD people in the world can spend an hour and a half reading it, because that's probably all it takes.

Derek Pittak [00:18:53]:
It really dumbs it down. And so if you remember that, what I tell my clients, I say, hey, get your staff. The Reader's Digest or the Eos for Dummies. Right? The whole series, back in the day, 25 years ago. Right? The yellow books, you know, Microsoft for Dummies. Coding for Dummies. Well, what the heck is eos? Is basically that and really just simplifies it in a manner for everyone in the organization to really understand what it is. So what the heck is it? It is a system, right? A methodology, a tool set.

Derek Pittak [00:19:20]:
Right. Of practical concepts, disciplines, tool and applications that you put into and insert into your business as a way to run it. Right. More seamlessly reducing the chaos. Right. You mentioned at the beginning of the podcast, right? The chaos, the world of staffing. It's chaos. It allows you to live in that chaos in a harmonious way.

Derek Pittak [00:19:42]:
Right. Creating, harmonizing, all that human energy. So what does that ultimately mean? It means being more accountable, more disciplined, executing at a high level with a high level of trust in your organization at all levels. Right. Being very communicative and transparent with vision, plan, data, financials. Right. And then, you know, and all of that. Right.

Derek Pittak [00:20:05]:
What does it get you people? Profit and growth. Right. And that's ultimately what most people want, is they're. They're saying, why do I want to do this? Or I need something that's not a flavor of the month pill. There's some magic pill. It is a bunch of timeless disciplines and concepts that came from really, really smart business people. And Gino Wickman did a beautiful job of packaging it all together, different pieces, parts, and some own IP of their own from EOS worldwide that allows an organization to just have the tool set to breathe and run their business and know that things are getting done when they're not there.

Benjamin Mena [00:20:42]:
So I feel like you already misspelled the mystery of the it can't be done in recruiting. But it sounds like you've done it in recruiting, you've done it in staffing. But it's one of those things, like you read the book Traction, or you hear about these things and you're like, well, we don't sell widgets. We sell people that have minds of their own that are hard to do things. But at the same time, on the second part of it, most organizations have the owner, a bunch of recruiters, and some salespeople, and that's most of the time it.

Derek Pittak [00:21:09]:
Yeah, yeah. So I think one of the key fundamentals, Ben, when you're working with any organization, and it's why the first tool that we teach is something we call the accountability chart. And it's not an org chart. It may be similar, you know, from a hierarchical perspective, but the difference is, is it clearly outlines who's accountable to whom and for what. So it removes ego from the chart of title. The Chief Culture officer. Right. Nobody knows what the Chief Culture Officer does.

Derek Pittak [00:21:43]:
Inside your organization. It's some fancy title that they post on, you know, LinkedIn when they get a promot and nobody knows what that really means. And so you start asking questions about what the chief culture officer does. And they're like, oh, well, I oversee human resources and I manage recruiting for internal recruiting for the company, or I oversee training and benefits. And I say, oh, so you're like eight human resources? And they're like, yeah. And I said, great, we're just going to call it that because now you've created a lot of clarity as to who does what and you put all those high level responsibilities underneath. So it sounds boring. It sounds like an exercise to create a workflow.

Derek Pittak [00:22:20]:
But at the end of the day, the structure is so important for you to get what you want out of your business. And it starts providing a lot of clarity when you're honest with yourselves about who belongs in what seat. And that oftentimes looks like a lot of red circles around an org chart or an accountability chart because you start to identify people issues and you say, hey, I'm a $40 million staffing company, I want to be 150 million. Well, how do you do that? Before you start answering vision and you know, I'll plan, you gotta say like, what does this thing need to look like to accomplish that? Okay, you're going to need 10 more recruiters, you're going to need five more salespeople, you're going to need two more leaders on the leadership team level. Okay, let's put all that together. Now you have a bunch of bleeping holes. And now you circle all the ones that don't fit anymore. Because I make them do that exercise, live in the room and answer like, are they the right person in the right seat? Now you have out of your team of 50, you've got 10 people who aren't the right person in the right seat.

Derek Pittak [00:23:17]:
And I'm telling them they need to go solve that immediately. And it freaks everybody out.

Benjamin Mena [00:23:21]:
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Benjamin Mena [00:23:53]:
Be there, be ready to learn, and be ready to crush it. I'll see you there. Okay, let's take a step back.

Derek Pittak [00:23:59]:
Sure.

Benjamin Mena [00:24:00]:
Before, we were like, hey, like, we need to get rid of 10 people. Like, whatever we need to do with 10 people. Okay. So, like, I know one of the parts of EOS is this accountability chart where you're sitting there breaking, like you just said, like, breaking down. What, everybody's accountable. Let's just say it's a $10 million firm, it's a leader, and some salespeople and recruiters, like, what does that even look like for an accountability?

Derek Pittak [00:24:22]:
Yeah, so what often happens is that. And I'm dealing with this right now with a client of mine, but what often happens in smaller firms is that the owner tries to be in every seat. Right? And so they're the visionary, they're the integrator, they're the head of sales or the head of ops, and sometimes how to finance, and that doesn't work, and it doesn't work well. And something usually slips. And they get laser focused on one thing at one time. And so, you know, that's where it becomes like, 10 teams stomach the change. And the change may be that you have to invest in two people who are no longer you, and you're going to entrust them with being the head of sales and the head of operations or the head of recruitment and the head of sales or whatever positions you want to bring on board. And there's a really cool tool that you can put to work to help you understand what you love to do, what you're great at, and hopefully that helps you understand what brings the most value, joy, and passion for me into the organization.

Derek Pittak [00:25:20]:
And if that's true, I focus 80% of my time on that. And now that allows you to construct where you fit into the play and what your missing pieces are. Right. So if you're not super strong at recruiting because you're a sales guy who started a staffing company, which is probably 90% of the people who start a staffing company, okay, well, then maybe we need to find a really strong operator for you who can take over all of that piece of it and then eventually move your way out when you've grown enough to find someone who's ahead of sales. So ultimately, you can't have a leadership team be vacant. You know, what does it ultimately look like in a standard, you know, recruiting company or any organization, at a minimum? Right. You need someone who's in charge. Right.

Derek Pittak [00:25:59]:
So let's call that person, the integrator, who there's a visionary. Most of the time, there's a visionary, you know, wild creative entrepreneur. Sometimes they're trying to be the same person, but that usually doesn't work well. And under them, you have a head of sales ahead of operations or recruitment and ahead of finance. Like, that's the very basic structure for really any company. And then you customize it. You customize it to the unique needs of that particular organization. But oftentimes in what I'll see is a variant and depending on the size of the staffing company is maybe there is a head of operations, but then underneath there's a head of recruitment for that particular person, or they have regionals, VPs or something like that is a title, not a function.

Derek Pittak [00:26:39]:
But you get my point is they have regional leaders, you know, depending on how many offices or something like that they may have. But that's pretty standard.

Benjamin Mena [00:26:47]:
I love how, like walking into this conversation, I was like, how does that leadership team actually work out where it's one person's running at all? But you're sitting there telling me that as a leader, if I want to grow, I need to be recruiting.

Derek Pittak [00:26:58]:
As a leader, if you want to grow, you need to find the thing that you do well. Any leader should, like, cling to that, right? So the worst thing that happens is I in love with sales. I'm very good at it. And then what happens is you add more people to your team. What happens like, you're now Mr. Leader, you're now Mr. CEO. So what do you do is you take on a bunch of administrative functions and you can't focus on sales anymore because you're busy with people issues.

Derek Pittak [00:27:29]:
You're busy with reviewing contracts, you're busy with, you know, vendors and whatever. And so you start to lose the essence of what makes you great. And that's okay if you can teach people really well. But there comes a time where owner operator elevates or they don't, and that's usually what breaks it. So me saying if you really love to sell and that's what you're great at, maybe you're just the head of sales for that organization, even though you're the owner. That's an entirely different conversation that we don't have time for today. But it really does. You have to find people like delegate and elevate to your unique ability.

Derek Pittak [00:28:04]:
So you have to find people who can do that. And it all stems on trust, right? So if you don't trust the person, they're probably never Getting the freedom to shine and do what they do best, but it's really finding your wheelhouse and staying in that lane. And then, right. If your ultimate goal is to like, I want to move into this grand CEO visionary seat, and I don't really want to work so hard and I want everybody to do it well, great. Get to a point where you can afford that and now hire those trusting people that can truly own those. Those functions of the business.

Benjamin Mena [00:28:37]:
Amazing job explaining that. But I want to go back to a thing that you said earlier in the podcast a few times. People. Yeah. EOS helps with the people issues.

Derek Pittak [00:28:46]:
Yes. So eos, right, has six key components. And one of the first. The first thing that we go over with a company with a leadership team is really teaching them what we call the EOS model. That's made up of the six key components. The second component is people. Right? And within each component, there's two tools or disciplines that we teach. So vision components.

Derek Pittak [00:29:10]:
The first one, right? Gotta have vision plan, gotta know where you're going. Of course. Makes a lot of sense. Cool. You gotta have, right, great people to accomplish that vision, right? From there, right. You gotta have some semblance of data, the data component, right? Looking at the right scorecard of measurables, solving those issues, right. If you do those three things well, vision, people, data, it starts to bring out all the ugly warts, right? All the imperfections in your business, and there's nowhere to hide. So what does that do? That creates the fourth key component, which is issues.

Derek Pittak [00:29:38]:
Every business has them. I don't care how well your business runs, every business has issues. I dealt with six this morning already. And right. There's also a process component, which is so important, right. It is the secret sauce that so many teams avoid. And it's almost the number one reason why things aren't working well. And then you've got the traction component, which is all about execution, discipline, et cetera, et cetera.

Derek Pittak [00:29:59]:
So if we kind of go back to the people component, right. We know that a lot of teams use phrases like rock stars or a players, right. Whatever it might be to say like this is my guy or gal. But how do we define it? To make it really crystal clear, right. You got to have the right person in the right seat. And that phrase, right, rprs, right. Is stolen from Jim Collins, right. In the book good to great, right? Get them on or off the bus.

Derek Pittak [00:30:22]:
A right person aligns to your culture, right? To your core values. They're a right fit to be at your company and then being in the right seat means they get it, want it, and have the capacity to do their jobs well. So they have the right aptitude and DNA encoding to do the job. I get it, I want it. Passion, desire, right? And if you don't, right. I'm going to ride you until you do. And you're not going to like that. You're just not passionate about it.

Derek Pittak [00:30:45]:
You're never going to really like, want to do this. And then the capacities is physical, mental, emotional, time bound, spiritual capacity to do the job. Do you have the experience of tenure, et cetera, et cetera. So you have to have it or you're toast, right? It is the number one thing in my opinion. If you have 75 issues on your board, if you walk all those issues back far enough, it's usually because someone didn't do something. Even if it's a process issue and you're like, oh, the process is broken. Well, why is the process broken? Does it just not work? Because it worked before and all of a sudden now you changed out seven people and have you trained them well enough to do the process? So it's actually a people issue. Right.

Derek Pittak [00:31:26]:
Either the head of ops didn't train his recruiters or they don't know what the heck they're doing. And no matter what training you give them, they can't perform. So most commonly issues fall into that people bucket. And that is really hard because emotions are there, right? Loyalty is there, sometimes family members are there. And so it is a really hairy issue to solve, but is the number one issue to solve. And if I go back to the accountability chart, that's why it's the first exercise, because you can't get anywhere, right? You can't delegate and elevate, you can't grow, you can't do anything, unless you're just lucky without fixing your people issues. It's the easiest thing to pick on. It's the hardest thing to solve.

Benjamin Mena [00:32:10]:
Have you walked into an implementation, like ran the accountability chart and I sat down with a team and they literally said like, hey, we need to get rid of a bunch of people.

Derek Pittak [00:32:19]:
Yes.

Benjamin Mena [00:32:21]:
Often this is going to sound like super dumb, but like, how often is it like a friend from high school and they've been doing it for years together, or like, it's a family member, like, how do you like, yeah, how do you like navigate this kind of stuff? Or like, do people just skip over like, ah, on to the next part of the process?

Derek Pittak [00:32:39]:
Yes, to all of those. But the reality is, you know, when the pain is bad enough, right. You know, it's funny, I was watching Charlie Sheen's documentary on Netflix last night and when the pain is bad enough, you get help. Right. And so don't need to be overly dramatic here, but I, I tend to bring a dramatic statements into my session rooms because I want teams to understand, you know, what good looks like, what reality looks like and are they willing to make those changes. So yes, I've dealt with. We're not there to force, you know, someone getting fired in the room. But has it happened? Yes.

Derek Pittak [00:33:16]:
Long term employees who just what got you here isn't going to get you there. You've probably heard that, the listeners have probably heard that phrase a thousand times, but it's so true. The people who helped you get to where you are today and you put them in a leadership position and they're not a real leader, like that is a major issue. And if you don't solve that, regardless of the loyalties, the friendships, the family, like that all happens in business. And you just have to navigate, navigate it carefully. You have to be open and honest with the owner. You have to. Right.

Derek Pittak [00:33:49]:
Say when is the time to solve this? Because I'm going to keep bringing it up. It's my job as the implementer to enter the danger and take a flashlight and shine it against the alarming issue. And the alarming issue is the brother who doesn't do anything but sits as the head of whatever for the company and he's got minority ownership or Maybe he's got 50, 50 ownership or it's split a third, a third, a third with the other two siblings. Solving that issue is critical. And if they don't do it, I can't help you. I can't make you right go to rehab. You have to choose to go to rehab. And so what I tell you is when the pain is bad enough, they ultimately make it.

Derek Pittak [00:34:26]:
It's my job to continue to impart that on them so they will or won't make the change.

Benjamin Mena [00:34:31]:
Do you ever see a point where somebody like they're the right cultural fit but they're in the wrong spot? Have you seen people successfully move to a different spot?

Derek Pittak [00:34:42]:
Yes, when they can remove their ego right at the end of the day. If I just cut to the chase on that one. I have seen it done successfully, but only a handful of times. And when I say handful, I probably mean like two or three times, you know, because what often happens is, is people, you know, generally develop some ego about them. It could be we promoted somebody Becoming a branch manager, and one year later it didn't work out. And they're great as a recruiter and we have an honest conversation with them and say, hey, Mr. Branch Manager, here's the facts. And you've seen it, you've heard it, you've got a lot of coaching.

Derek Pittak [00:35:16]:
For this to work, you have to move back. And if you don't want it, that's okay, let's talk about it, but we'll put you back in that seat. That doesn't happen a lot because sour grapes ensue and they want to make excuses and blame. But at the end of the day, I have seen it successfully work when done correctly. And a lot of that comes down to the communication of how you do it. But yes, it can work. And that is prevalent. That happens a lot.

Derek Pittak [00:35:37]:
You know, what you're saying is, right person, wrong seat.

Benjamin Mena [00:35:40]:
So with all this, we'll just say, like, I'm afraid to fire my brother or fire my sister or somebody that has a minority of partial equity. I mean, the legal work of firing that person is crazy. But from my understanding of chatting with you before we went live in our pregame, data is important to get to all those points.

Derek Pittak [00:36:02]:
Yeah. So if you think about the data component, it's chalked up into two things, right? Scorecard and measurables. And EOS is very specific on its words, and you'll hear KPIs a lot, but EOS uses the phrase measurables to define it. And so that is something. Again, we set up the company scorecard with an organization, right? What's the handful? Right. Truly handful, 5 to 15 to 20, you know, if so measurables that really guide the organization. And eventually you start to break that down into departmental scorecards, right? So the recruiting department, potentially, or branch scorecard, sales scorecard, the accounting and finance scorecard, whatever. You know, keep going on down the list on how deep you want to go.

Derek Pittak [00:36:46]:
And then if a team's done it really well, they start to assign individual measurables for people. So if you think about it, it cascades down, right? Down and up. A waterfall effect, you know, rolls up and down whatever metaphor we want to use. But at the end of the day, right, if the company scorecard for sales is this, and you've got five measurables that define it, those ultimately just break down into the department and they just get a little bit larger and larger into eventually individual measurables for everybody on the team. So that is super critical. And you know what I tell teams is you're either going to get it right on the first try, but most likely it's going to take you six to nine months to figure it out because it's going to evolve. You're going to learn new stuff, you're going to see stuff that doesn't work. You're going to say, this no longer applies to us.

Derek Pittak [00:37:31]:
It's not telling us anything. I saw a team take two years to get their scorecard to a place where they felt really good that it was providing useful data. Heck, I was just on a client call a couple of days ago and explained to them the importance of the scorecard they built. And again, trying to avoid being a consultant in the room because that's not my job. My job is to be a facilitator. My job is to, you know, help get them to a common answer. And at the end of the day, if it's their scorecard and they love it, that's great. But I say, you know, what is wrong with your scorecard is it's filled with nothing but lagging indicators.

Derek Pittak [00:38:07]:
It tells you a story that's cool, but you can't do anything with that story, right? Sure. If all you're looking at is revenue, gross profit, job orders and placements, great. That tells you how your team did that week, that's awesome. But if it's not working properly, you're not diving into the details as to why. So the leading indicators, right. You're not digging into diagnosing the problem. You don't know where to go. So if you focus on if you wanted to look at those five things, that's cool.

Derek Pittak [00:38:37]:
But if you had 10 things before that on the sales and recruitment side of interviews, submittals, client check in calls, sales, outbound calls, Right. Drops, meetings, proposals. Right. If you have all of those pieces before all the lagging, when you see red in your scorecard, you can now jump back to where the issue is. Big, giant, Right. Circle around interviews are super low. Okay, Right. So inputs and outputs, I really love to look.

Derek Pittak [00:39:07]:
And you have the sales engine. The major output in my opinion is a job order, not a signed agreement. Right. I don't care about your signed agreement unless that is orders attached. But if you talk about the, the result of all things sales leads to a handful of orders that order. Those orders now kick off the recruiting engine. Right. The recruiting process can now start because they have something to work on.

Derek Pittak [00:39:32]:
And so you start to diagnose and understand inputs and outputs and you're really trying to measure are the teams doing the Activities, because that's what you can change week to week to get to the result. So if I a real example here, let's just say I expect my, you know, sales is easy to pick on. Let's say I expect my sales rep, my sales director to make 100 phone calls in the week, right? I sound low for people listening, but let's just say that's it for simple math reasons. So at the end of the week, I see that, you know, Johnny only did 50 sales calls, okay? And I held him accountable and said, did you hit this measurable or didn't you? And they say, nope, I didn't. I only got 50. I was saying, okay, well if you miss the week, you're most likely to miss the month. And if you miss the month, you're most likely to miss the quarter. And if you miss the quarter, you're most likely to miss the year, right? So super important.

Derek Pittak [00:40:28]:
And using this as a tool to have the right conversations and then help your team understand what they need to do to get it back on track. So that 50 that you missed. Now guess what your to do for next week in order to stay on track for the month is to make 150 sales calls, right? And then you assess how they're doing against that. So that may sound trivial and that may sound elementary to most people, but I will tell you, the vast majority of people I have worked with in my past and still to this day do not do that. They miss it and they're like, okay, reset for next week. It is so important that we use the tools that way and you make it simplistic enough so they can. So if you're going to all of a sudden insert a bunch of ratios into your scorecard and ratios for some people that have very advanced leadership teams or very advanced and sophisticated tools to do all that, that's cool. But you can't manage around ratios from a week to week perspective, generally because it's just results and results and results of activity to give you some type of monthly or average ratio over a period of time.

Derek Pittak [00:41:29]:
But generally doesn't change from week to week as much. So like giving people real things to say, here's the three things you need to hit every single week. Just focus on these three. And now if they're activity based, you can actually attack them, address them, and help them improve to get back on track.

Benjamin Mena [00:41:42]:
How often when you're working with these organizations and you're helping build these scorecards out, do they have 40, 50 things? And I'm probably way when it really should be three to what, five.

Derek Pittak [00:41:56]:
Yeah, I'd say, you know, the general rule of thumb that we use is five to 15 departments, three to 10. But if we're sticking with five to 15, what generally happens is teams often are finishing up with like 18 or 20 things they want to see. And sometimes that's that's right and sometimes it's wrong. Again, not my major job. But I do think in staffing and recruiting, again, this is not EOS implementer talking, this is, you know, staffing talking. But I do believe you can measure what you need to measure in less than 10 measurables to know if your staffing recruiting company is working well. Right. And so if you wanted to say like three on the sales side, three on the recruiting side and three on the finance side, sure.

Derek Pittak [00:42:40]:
Done. It's not that hard. Teams get excited with a bunch of data and then they don't know what to do with it all. And it becomes very overwhelming to look at.

Benjamin Mena [00:42:49]:
So you don't want too much data because it becomes overwhelming.

Derek Pittak [00:42:52]:
Yeah, I mean, I think there, there are things to look at in points of time. That's cool. I'm not honing in on all this. And if I do work with the team and even internally, our scorecard's a little bit bigger. You know, I will say, you know, sins of an EOS implementer here that runs a business is that our scorecard is a little bit longer. But I have an agreement that there are only a handful of things that I actually want to issue solve when they're red. Other things are just pinpoints. Right.

Derek Pittak [00:43:17]:
They're data points for me. I'm not getting laser focused on whether or not you hit your networking goal for the week. Right. I'm getting laser focused on the things that are like week to week going to drive the results. We need to increase our headcount every single week. The networking stuff's a long play. So while we're tracking it to see how the team's doing, I'm not ever issue solving that, at least not in a weekly, you know, week to week perspective.

Benjamin Mena [00:43:42]:
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Benjamin Mena [00:44:06]:
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Benjamin Mena [00:44:49]:
Don't miss the future of recruitment. Get started with Atlas today and unlock your exclusive listener offer at recruit with atlas.com thanks for listening to this episode of the Elite Recruiter podcast with Benjamin Mena.

Derek Pittak [00:45:01]:
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