In the past 3 years I’ve learned quite a few lessons in how to run a business as I’ve brought PassportParking from an idea to a new leader in the parking industry. Of all of these lessons, the most important lesson is that you can’t do it by yourself. You need great teammates to make it happen. But, how do you find those great teammates? I’d say a big part of it is luck. But, another large part of it is seeking out the right characteristics. The most important of these characteristics, to me, has become the Entitlement over Output ratio, or the EO ratio. (I made that up, don’t bother looking it up.)
Of course, you also want smarts and tenacity and charisma. And of course, there are other schools of thought, but it seems that all of these fade into the background for me in comparison to the EO ratio. I’ve found if you can find teammates with a low EO (ie low entitlement and high output) you will find yourself in great shape as a manager in a company.
Now what is meant by Entitlement? I believe it’s pretty self explanatory, but the concept is that you want teammates that don’t inherently believe that they are owed something before they even begin to prove their worth. An example of this was a hire Passport had from a couple years back that wanted to discuss his option pool before he even started. Looking back, I could see that this was where the trouble started for this person. They believed that the company owed them something extravagant before they had even proved their worth to the company.
A coworker with low entitlement, on the other hand, will pull the extra mile without a question. These teammates can see when their help is needed and they just get things done. There’s no asking for overtime pay or special perks. These are the kind of people that only believe they should get rewarded because they earned it. And you had better reward them.
And with regard to output… Well, I doubt that needs much explanation. You need people that get things done and in a quality manner. You need teammates that you can count on to get the job done. You need to be able to turn your back and work on another project and trust that they’ll get the job done so well, you’d wish you could say you’d done it.
The reason I believe that a ratio concept is important here, though, is that there’s no solid rule here. Take Kobe Bryant for example. He’s as entitled as they come, but he also has about as high an output as you can get. In this case, even with a high amount of entitlement, you probably have a pretty good teammate. The same is true in the business world. If that former teammate of mine (the one that asked for the options) had performed at a level that deserved the options, then there would not be an issue. But, he didn’t, and his EO ratio ended up on the very high end of the scale.
The converse is also true. If you find a teammate who may not be the superstar, but rather is a contributor, but you find that they are the most selfless person and coworker, then you have probably found yourself a great individual to add to the organization.
I may have just invented this term, but I don’t think I invented the concept. I believe that you can see it everywhere you look in business. Age discrimination is an excellent example of the EO ratio in practice. It would be no surprise to find that older employees believe that they are entitled to more, including benefits, salary, and vacation to name a few. After all, they have probably been successful, and have probably earned it in the past. All things being equal, this can make it harder for an older hire to find success as the EO ratio has begun weighted in the wrong direction.
The concept can also be seen in action every May and June time frame, when the college graduates join the ranks. These hires generally have an entitlement level near zero, and the best of them can output beyond your belief, which is what makes them such an attractive hire.
The important metrics for your business and your management style will forever be changing and updating, but I believe that it will be found that the EO ratio is an important metric as any, and I plan on using it going forward to help build a superstar cast for my companies, now and in the future.