Simple is not so simple, or is it?

I recently completed 4 days of board meetings with the Entrepreneurs Organization in Tokyo.  The meetings were effective and robust, and I believe they continued to achieve our purpose of moving the world forward by unlocking the potential of entrepreneurs.

The success of EO is measured in a number of ways, including growth, which for many of our businesses is a key indicator of achieving our vision.  EO has certainly grown since its inception in 1988, to over 17,000 members, 200+ chapters in 63 countries.  Our global growth has averaged 6-7% per year.

During my tenure on the board, I’ve had the pleasure of being the liaison to the North Asian region, which includes the countries of Japan, China and Korea.  During a dinner in Tokyo, we celebrated the achievements of Japan and its growth over the last 8 years, possibly the highest percentage of growth in the organization, achieving 21% annualized growth!

Imagine if you could achieve 21% annual growth in your business every year!

In 2014 a group of Japanese members created an initiative called 5-5-5:

• To establish 5 chapters in Japan
• To have 555 active members in Japan
• To have 5 members in senior volunteer leadership positions in EO

Not only did they achieve these goals, but they also created the enviable position of being the go-to organization for entrepreneurs in Japan.  Japan just crossed the 1000-member mark earlier this (fiscal) year, with 14 chapters (2 of which launched during Covid) and 16 members in senior leadership positions.

So what happened?  Why did Japan grow at 21% while the rest of the world only achieved 6-7%

When establishing this initiative, it was identified that it could not succeed if the leadership continued to focus only on their own chapter.  There was an essential need for collaboration and communication.  What emerged was a sharing of experiences between chapters for recruitment, onboarding and retention – teamwork!  There was a rising energy that became contagious – an experience that EO members in Japan shared with their fellow entrepreneurs in their networks.

The growth of the organization started to take off, and the growth of the individual entrepreneur became abundantly clear.  One of the many shared goals of entrepreneurs in Japan is to take their company public.  Anyone who has gone through this process knows that it is no small undertaking.  During this 8-year period, more that 100 EO member companies successfully launched IPO’s in Japan!  The word on the street now, is that if you want to take your company public, you have to be a member of EO!

It comes down to the simple goal of 5-5-5.  But reflecting on how Japan achieved this goal is both in what they did, and what they didn’t do.

To start with, there was clarity of vision.  What did success look like in 5 years? Well, this was very clear.  They focused on one goal that had 3 objectives, rather than multiple goals that had many objectives.  The goal did not change for 5 years, and in fact due to covid, the goal did not change until this year.

Many of the goals in business, along with strategies and objectives change far too fast and often well before they have matured.

In addition, they recognized that it was a team effort and one that required good communication. A monthly in person meeting was scheduled, hosted by a different chapter every month and attended by chapter board members from across the region (Japan’s amazing train network made this very easy).  Called the “Japan Meeting” each chapter has a chance to share what is successful and what challenges they have, and collectively they learn and grow.  When discussing recruitment and growth a simple practice emerged – a request to chapter members that when they attend an event, invite a business owner in their network to join them.  This is referred to in Japan as 1+1 events.

Some would suggest that discipline was required to achieve this growth, and while I would agree that there had to be discipline in sticking to the original goal, I would offer that a culture emerged that established a DNA and formed its habits of what EO in Japan is all about.  Chapter leadership changes every year, and  to continue on the same path, habits needed to be simple and transferrable.

Are the processes in your company simple and transferrable to the next employee?

The additional benefit that emerged in achieving this goal was exceptional member engagement.  This is typically measured by the renewal percentage each year, for which Japan averages 98% (globally 90%).  However, member engagement was not a goal that was added to the original objectives, that may have further complicated the efforts.

Is the culture in your company resulting in 2% turnover?

5 chapters was the goal but 14 emerged.  Launching a chapter, like a new product, has to reach a critical mass to be sustainable and considered successful.  In EO, typical sustainability for a chapter occurs with 50 members, and success really emerges with 75 or more members.  With the overall country average of 21% average annual growth, most of the new chapters grew even faster, typically only taking 3 years to hit 50 members from a starting point of 16 (46% growth).

Does your company have a successful repeatable model that is used to scale your business?

Often times our plans become more complicated than they intended to be.  Goals often don’t seem as important than when they were first set, and distractions typically get in the way of remembering the goals.

Simple is not so simple, or is it?

Let’s chat.