My partner recommend reading the book "Traction Get A Grip On Your Business" by Gino Wickman. It offers practical advice on how to run a small business ($2M-$20M in revenue) smoothly and with a lot of structure around it.
Who is this book for?
This book is good read for any business owner and their management teams. It gives practical and simple advice for running and taking the business to the next level.
Usual Disclaimer
This post is by no means a summary of the book, the notes mentioned here are extracts from the book. If you find these interesting, please pickup a copy of the book and give it a go.
Book Notes
The Entrepreneurial Operating System (EOS)
Every great system is made up of a core group of basic components. The Entrepreneurial Operating System (EOS) identifies six key components of any organisation.
- Vision
- Successful business owners not only have compelling visions for their organisations, but also know how to communicate those visions to the people around them.
- People
- Successful leaders surround themselves with great people.
- Data
- The best leaders rely on a handful of metrics to help manage their business.
- Issues
- Issues are the obstacles that must be faced to execute your vision.
- Process
- Your processes are your way of doing business. Successful organisations see their way clearly and constantly refine it.
- Traction
- Most successful business leaders are the ones with traction. They execute well, and they know how to bring focus, accountability and discipline into their organisation.
Letting Go Of The Vine
Most business owners are unable to reach the next level because they are simply not ready to let go of the vine. You want to see your business grow, but at the same time, you're frustrated, tired and unwilling to take on any more risk. The truth is that before you can grow, you'll need to take a leap of faith.
With right vision structure and people in place, your company can evolve an realise its full potential. You must be willing to embrace the following four fundamental beliefs:
- Build and maintain a true leadership team
- Hitting the ceiling is inevitable
- Run your business on one operating system
- Be open-minded, growth-oriented and vulnerable.
The philosophy of this book advocates a healthy leadership team. This team of people define the company's vision with you. These leaders all have clearly accountabilities and must be able to take initiative over their respective departments.
Each of your departmental heads should be better than you in his or her respective position. You will need to give them clear expectations and instill a system of effective communication and accountability.
Reaching the natural limits of your existing resources is a by-product of growth, and a company continually needs to adjust its existing state if it hopes to expand through the next ceiling. If you're not growing, be it internally or externally, you're dying. Most companies strive for external growth, but internal growth also leads to future greatness. Most companies need to start with a focus on internal growth before they can even think about external growth.
Your leaders need to be able to simplify, delegate, predict, systemise and structure.
Delegate
You will need to learn how to delegate and elevate. As you figure out how to build and extension of yourself, your team can also extend the company by building teams under them.
Predict
Long-term predicting is the forecast of everything 90 days and beyond. To do so, your leadership team has to know where the organisation is going and how you expect to get there. You do this by starting with the far future and working your way back.
Short-term prediction focuses on the immediate future. These are the issue that will arise on a daily of weekly basis, and your ability to solve them will affect the long term greater good of the organisation.
Systemise
There are really only a handful of core processes that make any organisation function. Systemising involves clearly identifying what those core processes are and integrating them into a fully functioning machine. The processes must all work together in harmony, and the methods you use should be crystal clear to everyone at all levels of the organisation.
Structure
Your company needs to be organised in a way that reduces complexity and creates accountability. In addition, this structure should also be designed to boost you to the next level.
You must have one binding vision, one voice, one culture, and one operating system. This includes a uniform approach to how you meet, how you set priorities, how you plan and set your vision, the terminology you use and the way you communicate with employees. This is called the operating system of the business and this is what puts everyone on the same page.
You have to be willing to be open to new and different ideas. If you don't know something, you have to admit that you don't know. You have to be willing to ask for and receive help. Most of all, you have to know your strengths and weaknesses and let other people who are more skilled than you in certain areas take charge.
The Vision
Clarify your vision and you will make better decisions about people, processes, finances, strategies and customers.
Entrepreneurs must get their vision out of their heads and down onto paper. From there, they must share it with their organisation so that everyone can see where the company is going and determine if they want to go there with you.
If you could get all people in an organisation rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.
To create a strong vision, answer eight important questions.
- What are your core values?
- What is your core focus?
- What is your 10-year target?
- What is your marketing strategy?
- What is your three year picture
- What is your one year plan
- What are your quarterly Rocks?
- What are your issues?
What are your core values?
Core values are small set of vital and timeless guiding principles for your company. Once they are defined, you must hire, fire, review reward and recognise people based on these core values. This is how to build a thriving culture around them.
What is your core focus?
Business can easily become distracted by opportunities that are wolves in sheep's clothing. Your job as a leadership team is to establish your organisation's core focus and not to let anything distract you from that.
What is your 10-year target?
This target is one larger-thank-life goal that everyone is working toward, the thing that gives everyone in the organisation a long range direction. Once your 10 year target is clear, you and your leadership team will start doing things differently in the here and now so as to get you there.
What is your marketing strategy?
Marketing strategy creates a laser sharp focus for your sales and marketing efforts. A focused effort will enable you to sell and close more of the right businesses. It will become the foundation upon which you create all future materials, plans, messages and advertising. It's made up of four elements:
- Your Target Market
- Your Three Uniques
- Your Proven Process
- Your Guarantee
Your Target Market
Identifying your target market involves defining your ideal customers. Who are they? Where are they? What are they?
Your Three Uniques
These are what makes you different, what make you stand out and what you're competing with.
Your Proven Process
There is a proven way you provide your service or product to your customers. You do it every time, and it produces the same result.
Your Guarantee
A guarantee is your opportunity to pinpoint an industry-wide problem and solve it. This is typically a service or quality problem. you must determine what your customers can count on from you.
What is your three year picture?
This illustrates what your business will look like three short years from now. This will accomplish two vital objectives. First your people will be able to "see" what you're saying. Second, it greatly improves the one year planning process.
What is your one-year plan?
This essentially means deciding what must get done this year. Most companies make the mistake of trying to accomplish too many objectives per year. By trying to get everything done all at once, they end up accomplishing very little and feeling frustrated.
What are your quarterly rocks?
This section determines what the most important priorities are for the coming quarter. Those priorities are called rocks. Quarterly Rocks create a 90-Day world of your organisation, a powerful concept that enables you to gain tremendous traction.
What are your issues?
This identifies all the obstacles that could prevent you from reaching your targets. The sooner you accept that you have issues, the better off you're going to be. Everyone has them; your success if in direct proportion to your ability to solve them.
The People
The right people are the ones who share your company's core values. They fit and thrive in your culture. They are people you enjoy being around and who make your organisation a better place to be.
The right seat means that each of your employees is operating within his or her area of greatest skill and passion inside your organisation and that the roles and responsibilities expected of each employee fit with his or her unique ability.
The Accountability Chart
This forces its users to view their organisation in a different way and to address people issues that have been holding them back for years.
Integrators
The integrator is the person who harmoniously integrates the major function of the business. When those major functions are strong and you have strong people accountable for each, great health friction and tension will occur between them. The integrator blends that friction into greater energy for the company as a whole.
Visionaries
This person typically has 10 new ideas a week, Nine of them might not be great, but one usually is, and it's that one idea each week that keep the organisation growing.
GWC
GWC stands for get it, want it, and capacity to do it.
Get it simply means that they truly understand their role, the culture, the systems, the pace, and how the job comes together.
Want It means they genuinely like the job. They understand the role, and they want to do it based on fair compensation and the responsibility.
Capacity To Do It means having the time as well as the mental, physical and emotional capacity to do a job well.
The Data
To gain the power of being able to manage your business though a chosen handful of numbers. These numbers will allow you to monitor your business on a weekly basis, quickly showing which activities are on track or off track.
Scorecard
It is handful of numbers that can tell you at a glance how your business is doing.
Measurables
What gets measured gets done. Everyone has a number, from the founder and chairman to the receptionist.
- Numbers cut through murky subjective communication between manager and direct reports.
- Numbers create accountability
- Accountable people appreciate numbers.
- Numbers create clarity and commitment
- Numbers create competition
- Numbers produce results
- Numbers create teamwork.
- Numbers help you solve problems faster.
The Issues Component
The forth essential component of gaining traction is having the discipline to face and solve your organisation's issues as they arise. Successful companies solve their issues. They don't let the linger for weeks, months and years at a time.
To solve the issues first you need to list them. The three steps to solving the issues are
- Identify
- Discuss
- Solve
Identify
Clearly identify the real issue, because the stated problem is rarely the real one. The underlying issue is always a few layers down. Most of the time, the stated problem is a symptom of the real issue, so you must find the root of the matter.
Discuss
In its simplest form, the discussion step is everyone's opportunity to say everything they have to say about the issue. You get everything on the table in an open environment where nothing is sacred.
Solve
This step is a conclusion or solution that usually becomes an action item for someone to do. The item ends up on the ToDo list, and when the action item is completed, the issue goes away forever. Solving issues takes time. By solving issues now, you'll save time exponentially across departments by eliminating all future symptomatic issues.
The 10 commandments of Solving Issues
- Thou Shalt Not Rule by Consensus
- Thou Shalt Not Be a Weenie
- Thou Shalt Be Decisive
- Thou Shalt Not Rely on Secondhand Information
- Thou Shalt Fight for the Greater Good
- Thou Shalt Not Try to Solve Them All
- Thou Shalt Live with It, End It or Change It
- Thou Shalt Choose Short-Term Pain and Suffering
- Thou Shalt Enter the Danger
- Thou Shalt Take a Shot
The Process
Nothing can be fine-tuned until it's first consistent. The process component is strengthened through your understanding of handful of core processes that make up your unique business model.
First step in fine-tuning the process is to document it. The steps that need to be followed are:
- Identify your core processes
- Document each of the core processes
- Package It
Once the processes are documented, everyone needs to start following the processes. The clear lines of process enable you to let go and gain more control.
The Traction
Gaining traction means making your vision a reality. At this moment, your vision is crystal clear, you have the right people in the right seats, you're managing data, you're solving your issues, and you've defined your Way of doing business and everyone is following it.
Rocks
With a clear long-term vision in place, you're ready to establish short-term priorities that contribute to achieving your vision. These 3-7 most important priorities for the company myst be done in the next 90 days. These priorities are called Rocks.
A rock must be clear so that at the end of the quarter, there is no ambiguity whether it was done or not.
Meeting Pulse
It's possible to hold extremely productive meetings that actually save time. The Meeting Pulse is your organisation's heartbeat. Rather than long, meandering meetings, a Meeting Pulse with a specific agenda throughout your departments will keep your organisation healthy.
The 90-Day World
As a part of your vision, you created a three year picture. After that came a one-year plan and now a 90-Day world.
The Weekly Meeting Pulse
Once the quarterly priorities are set, you must meet on a weekly basis to stay focused, solve issues, and communicate. Weekly meeting pulse is your opportunity to make sure that everything is on track.
Always A Level 10 Meeting
Most meetings in business are weak and. not very productive. A Weekly Level 10 Meeting keeps you focused on what's important, helps you spot developing problems, and then drives you to solve them. What makes for great meetings is solving problems.
Pulling It All Together
The combination of strengthening the Vision, People, Data, Issues, Process and Traction components is what makes the real magic occur.
Everything has its place. Anything that must be accomplished this year becomes a goal. If it needs to get done this quarter and will take weeks or months to accomplish, it becomes a Rock. Any issues that arise during the quarter and must be solved now go onto your weekly level 10 meeting.
It's crucial for greater good of the company, its culture, and people that the leadership is 100% on the same page.
Most leaders spend most of the time overwhelmed, tired and buried in the day-to-day routine, unable to see beyond tomorrow. As a result, they don't solve problems as well as they could, they don't lead their people as well as they could. Great leaders have a habit of taking quite thinking time.
Conclusion
This book provides a practical guide to putting a structure in place for small sized companies. It a small book and a good read for any person in the leadership position.
