The EOS® Process for Private Equity-Owned Businesses

A Guide for EOS Implementers® Working with Businesses Backed by Private Equity

Introduction: Why EOS Implementers Need to Rethink Board Engagement in Today’s Market

Here’s the deal: when EOS (Entrepreneurial Operating System®)was first developed, it wasn’t built with external investors in mind – it was all about the leadership team, getting everyone on the same page, and driving the business forward from within. But now, we’re facing a new reality. With baby boomers selling off their businesses in droves, EOS implementers are finding themselves working with companies that have a new dynamic – private equity (PE) investors in the Owners Box. And let’s be real: PE funds aren’t your everyday investors.  They have distinct needs, a stronger appetite for engagement, and they want to see results. Fast.

So, what’s the complication? Well, it’s both a challenge and an opportunity. Across the global EOS community, the numbers tell an interesting story—about 65% of all EOS clients now have some form of board, and a big chunk of those businesses are backed by PE .  As implementers, we’re experiencing challenges in effectively engaging with this dynamic while remaining pure to EOS implementation.

On the flip side, when a PE fund sees the power of EOS, and how it adds value to their investment, they become strong advocates and often seek to deploy EOS across their entire portfolio – forming a strong business relationship with one or a handful of EOS implementers.

And that leads us to the big question: How can EOS implementers best facilitate meaningful input and ongoing engagement with private equity owners? What’s the right balance to strike so that the PE fund is engaged, the leadership team is empowered, and the EOS implementer is able to facilitate Vision Traction Healthy with all engaged? That’s what we’re here to explore.

Understanding the Needs of Private Equity Investors and Different Types of Boards

When you’re working with private equity-backed businesses, it can be a whole different ball game. Unlike traditional, hands-off investors who might pop in once a year to approve a budget, private equity investors can be that keen kid in class who’s always raising their hand—they want in on the action. They are results-driven, detail-oriented, and often have a strong say in strategic decisions. For an EOS implementer, this means navigating expectations that range from “give us the numbers and we’ll sign off” to “we want a seat at the table for every strategic discussion.”

But first, a quick primer on private equity. Private equity (PE) typically operates through funds that have a set lifespan, usually around ten years, though this can vary. Each fund is structured with a clear goal: to maximize the return on investment within that time frame, often by driving significant growth or making improvements to the P&L, financial reengineering, or M&A (or all of the above!). This means PE investors are not just looking for passive returns—they’re actively involved in shaping the direction of the business to ensure it meets the fund’s financial targets.

And it’s not just about how much they want to be involved; it’s about what they’re bringing to the table. Some funds might be completely new to EOS—they’ve never heard of a Level 10 meeting, and think Vision/Traction Organizer® (V/TO®) sounds like something from Star Wars. Others might be all in, using EOS as their preferred operating system across their portfolio. Understanding where each board or investor sits on this spectrum is crucial to tailoring your approach.

Each fund has a different mode of engagement with their portfolio companies, ranging from a formal governance board with non-exec directors, to a hands-on Portfolio Manager who acts as the interface to the fund management.  For the purposes of this content, I’ll use the term ‘Board’ interchangeably and acknowledge that it won’t cover every single permutation.

Three Proven Approaches to Integrating Board Input in the EOS Process

When working with PE  backed businesses, finding the right level of  involvement is essential for maintaining strategic alignment without disrupting the EOS process. Below are three proven approaches for integrating board input, tailored to varying levels of board engagement:

1. Post-VB Presentation
2. Input During VB/Annual Planning
3. Dedicated Board Strategy Session

To help EOS implementers navigate these dynamics, we can use a 2×2 framework that categorizes board involvement based on two key factors: the board’s familiarity with EOS and their desired level of involvement. Understanding where a board falls on this matrix helps implementers choose the most effective approach to integrate board input.

Approach 1: Post-VB Presentation
EOS Implementer Involvement: Little to none.
In this approach, the EOS Implementer has minimal direct interaction with the board. The leadership team conducts the Vision Building (VB), Quarterlies, and Annual Planning sessions independently, without board involvement. After these sessions, the Vision/Traction Organizer (V/TO) is presented to the board for review and approval in a separate meeting. The EOS Implementer’s role is primarily to support the leadership team in preparing for the presentation.

• Ideal for: Boards that prefer a high-level overview rather than detailed involvement.
• Benefits: Keeps board meetings focused and efficient, reducing the need for board members to attend multiple EOS sessions.
• Potential Challenges: If the board requests significant changes after seeing the V/TO, it can lead to delays and a need to redo parts of the V/TO
• Tips for Implementers: Ensure the leadership team is well-prepared to present the V/TO and anticipate potential concerns, and be available to help talk through the implications of any changes.

Approach 2: Input During VB/Annual Planning
EOS Implementer Involvement: Moderate.
This approach offers flexibility, allowing the board or fund to join during Vision Building or Annual Planning, with their level of involvement varying based on where they sit on the X-axis of the 2×2 framework. The board can choose to participate in select agenda items or stay for the entire session, depending on their familiarity with EOS and how hands-on they want to be.

• Ideal for: Boards that want to provide strategic input on critical elements of the V/TO and have a say in the company’s goals but prefer to stay out of the operational details.
• Benefits: Allows the board to contribute at a level that fits their knowledge and involvement needs, ensuring early buy-in and reducing the risk of misalignment later on.
• Potential Challenges: High involvement can risk taking the session off track if not well-facilitated, while low involvement could lead to gaps in strategic alignment if the board doesn’t feel fully included.
• Tips for Implementers: Adjust the agenda according to the board’s involvement level. For high-involvement boards, create time blocks for them to contribute meaningfully without derailing the leadership team’s process. For low-involvement boards, ensure the final presentation of the 1-Year Plan and rocks is clear and concise, with room for feedback.
  • Boundaries and Ground Rules – Before the session the EOS Implementer should set out clear ground rules and boundaries – ie the “EOS Healthy Rules” and, for example “no direct criticism of the team”, how we use “The Issues List” etc
  • RACI – using the RACI tool (detailed below) can help determine which sections to include the Board.
     

Approach 3: Dedicated Board Strategy Session
EOS Implementer Involvement: High.

This approach involves the highest level of EOS Implementer engagement. It includes running a dedicated, Board Strategy Session prior to the EOS Annual Planning. The EOS Implementer is deeply involved in facilitating this session, working with both the board and the leadership team to align on the company’s vision, goals, and key strategic issues. This approach is often used during significant transitions or when the board has a strong desire to shape the strategic direction.

• Ideal for: Boards that want to be very hands-on and play a critical role in setting the strategic agenda, particularly in times of change.
• Benefits: Ensures thorough alignment and integration of the board’s strategic input with the EOS process, leading to a more cohesive planning outcome.
• Potential Challenges: Requires careful facilitation to manage differing opinions and keep the session productive. Without clear objectives, it can risk becoming unfocused.
• Tips for Implementers: Prepare extensively by setting a clear agenda, roles, and expectations. Conduct a same-page meeting prior with the Visionary / Integrator and key board members to outline strategic priorities and potential areas of contention.
• Note: This format is not recommended for EOS Implementers with fewer than 200 session days of experience 

Example Board Strategy Session Objectives:

• Alignment on Vision for the Business
• Endorsement of the Draft Plan to Achieve the Vision
• Identify All Key Issues

Example Agenda

• Check-In
• Review Prior Year
• EOS Implementation Update / Org checkup results
• SWOT / Issues List
• Vision / Traction Organizer Review
• Review of Draft 1-Year Plan
• IDS (Identify, Discuss, Solve)
• Next Steps
• Conclude

The Draft 1 Year plan:
 
As preparation for this session it might be necessary for the business to prepare a ‘draft 1 year plan’ for the budget numbers for Revenue and Profit for signoff by the Board.  If this is the case, the leadership team should use time during the Q3 EOS Quarterly to align on the numbers, and if necessary, identify any major capital expenditure for the following financial year.
 
Another Tool for Engaging Boards: Using the RACI Framework for Clear Expectations

In addition to the proven approaches for integrating board input, one helpful framework that EOS implementers can use to set clear expectations between the fund, the portfolio company, and the EOS Implementer is the RACI framework. This framework helps define roles and responsibilities across all the stakeholders involved, ensuring alignment and avoiding misunderstandings throughout the EOS process.

What is the RACI Framework?
The RACI framework assigns roles to various individuals or groups involved in decision-making and execution. The acronym stands for:

• R – Responsible: Who is responsible for completing the task or achieving the goal? This is the person or group doing the work.
• A – Accountable: Who is ultimately accountable for the outcome or decision? There should only be one person accountable for each task or deliverable.
• C – Consulted: Who needs to be consulted or provide input before a decision is made? These are usually subject-matter experts or stakeholders.
• I – Informed: Who needs to be kept informed of decisions, progress, and outcomes? They are not directly involved in the work but need to be kept in the loop.

Using the RACI framework, you can define roles for different elements within the EOS—such as the 8 Questions within the Vision/Traction Organizer (V/TO), Scorecard Measurables, or any Right People Right Seat Issues within the Leadership Team  —ensuring that everyone knows their level of involvement and responsibility. Setting this framework at the start of an EOS engagement establishes clear boundaries and expectations, which is especially critical when working with private equity-backed businesses and leadership teams.

Setting Up the RACI Framework for EOS Implementation

Here’s how EOS implementers can use the RACI framework when working with private equity-backed businesses:

• Start of Engagement:
  At the beginning of the EOS engagement, hold a meeting with the private equity fund (or portfolio manager) and the Visionary/Integrator to define roles using the RACI framework.
• Clarify Roles for Each Deliverable:
  Go through each key of the EOS Foundational Tools and assign roles. For example:
• Core Year Target: The leadership team is Responsible, and Accountable, the Board is Consulted and Informed
• Scorecard Measurables: the leadership team is Responsible, and Accountable, the Board is Informed
• Use RACI to Navigate Key Discussions:
  Throughout the EOS process, use the RACI framework to guide decision-making and ensure that each party understands their role. For example, if there is a conflict over strategic direction, the framework can clarify who is responsible and who should be consulted to resolve the issue.

Case Studies: Different Approaches to EOS Integration with Private Equity
When implementing EOS in private equity-backed businesses, the level and nature of board and investor involvement can vary significantly. Here are four case studies that showcase how different funds integrate EOS into their operating strategies.

1. Example Fund 1 – Championing EOS Across the Portfolio
Example Fund 1 integrates EOS as a core part of its operating strategy for all its portfolio companies. Rather than having a traditional board structure, they use a portfolio manager who acts as a chairman:

• How It Works: The portfolio manager participates in Vision Building (VB) sessions to provide strategic input but otherwise stays out of day-to-day EOS involvement. They focus on quarterly Vision/Traction Organizer (V/TO) reviews and monthly budget check-ins.
• Key Insight: This approach allows for early strategic alignment while maintaining streamlined, focused engagement throughout the year.

2. Example Fund 2 – Visionary from the Fund, Integrator in the Business
Example Fund 2 takes a unique approach where the visionary role is assumed by a portfolio manager from the fund, while the integrator operates within the business:

• How It Works: The visionary is not directly involved in EOS sessions. Instead, the fund conducts a dedicated board strategy session once a year before the EOS Annual Planning session. During this session, the visionary, chairman, and other board members provide input to the leadership team, who then create the V/TO based on this guidance.
• Key Insight: This model allows the leadership team to take ownership of the EOS process while ensuring strategic alignment with the fund’s objectives.

3. Example Fund 3 – Approval-Driven Involvement
Example Fund 3 is relatively new to EOS and has taken a more hands-off approach, characterized by minimal involvement in EOS sessions but maintaining final control over budget approval:

• How It Works: After the Vision Building (VB) and Annual Planning sessions, the visionary and integrator present the V/TO, including the proposed budget, to the fund. The fund does not participate in these EOS sessions but reviews the V/TO afterward to approve the numbers and budget for the upcoming year.
• Important considerations: This setup can lead to complications if the fund finds the budget inadequate or misaligned with their expectations, sometimes requiring the leadership team to rework the plan.
• Key Insight: Setting clear expectations during the Vision Building and Annual Planning sessions that the numbers are subject to fund approval helps manage expectations and prepares the team for possible revisions.

4. Example Fund 4 – Highly Involved Fund with Strong EOS Understanding
Example Fund 4 has a deep understanding of EOS and uses it across their entire portfolio. Their involvement is highly detailed, focusing on accountability and measurable outcomes:

• How It Works: Before Focus Day, a meeting is held between the visionary, integrator (if defined), the fund portfolio manager, and the EOS implementer. This meeting reviews the accountability chart with a critical question: “Who’s going to be here in a year?” This helps the implementer shape the narrative and focus of the accountability discussion for Focus Day.
• Post-Focus Day Involvement: After Focus Day, and during the quarterly rhythm, the implementer, visionary, integrator, and fund portfolio manager meet to set priorities. The fund identifies their top three rocks for the quarter and leaves the remaining rocks up to the leadership team.
• Accountability Through Milestones: The fund requires each rock to be broken down into milestones, which are uploaded into the EOS software. The fund has access to monitor the progress on these rocks to ensure that strategic priorities are being executed as planned.
• Key Insight: This approach ensures transparency, sets clear expectations, and provides the leadership team with the autonomy to manage their areas within a framework of accountability.

Lessons from These Case Studies:

• Adaptability is Key: EOS implementers need to flexibly manage varying levels of board involvement, from hands-off to highly engaged. Each fund’s preferences differ, and your approach should adjust to their level of oversight without disrupting the EOS process.
• Clear Expectations: Establish expectations early. Whether it’s budget approvals or strategic input, clarifying who’s involved and when ensures smooth decision-making and prevents misalignment down the road.

Final thoughts
So, here’s the bottom line: Working with Private Equity Investors is about understanding the dynamics at play and finding the right approach to keep everyone on the same page. Whether it’s a quick post-VB same page meeting or a full day board strategy session, a successful implementation will come to adapting your approach to the needs of all stakeholders.  To be clear, it is not about deviating from pure EOS Implementation, and more about accommodating additional stakeholders into the existing proven process.

PE boards want results, but they also want to feel involved. That’s where tools like the 2×2 matrix and the RACI framework come into play—helping you navigate different levels of engagement without losing focus on what matters most: Vision, Traction and Healthy.
As an EOS Implementer, your job is to deliver EOS purely and, in the case of PE funding, find that sweet spot of engagement where board input supports the process without overshadowing the leadership team’s ownership. 

Trusting the process, understanding needs, clear communication, and a willingness to push for what’s best for the business are key.  Let’s not forget—EOS gets results and the leadership team and the fund should be in agreeance with that, if not, then it’s an issue for discussion
If you can strike the right balance between engaging the fund and empower the leadership team, you’re not just meeting expectations—you’ll deliver phenomenal returns for everyone.