Traction: Get a Grip on Your Business

by Gino Wickman

You need skills, tools, and a system to optimize your people, processes, execution, management, and communication. You need strong guiding principles that will work for your company day in and day out.

EOS is a holistic, self-sustaining system that addresses the six aspects of your business.

After EOS, you’ll make quicker decisions to change people, strategy, systems, and processes where necessary. It will help you reduce needless complexity, identify and remove distractions, identify and troubleshoot any problems, and keep you and your people engaged and focused on a single vision.

Are your staff all rowing in the same direction? Chances are they’re not. Some are rowing to the right, some are rowing to the left, and some probably aren’t rowing at all. If you met individually with each of your employees and asked them what the company’s vision was, you’d likely get a range of different answers.

The sun provides the earth with billions of kilowatts of energy, yet if you stand in it for an hour, the worst you will get is a little sunburn. On the other hand, a few watts of energy focused in one direction is all a laser beam needs to cut through diamonds.

two essential ingredients of any great team: the right people in the right seats.

A Scorecard is a weekly report containing five to 15 high-level numbers for the organization.

Your processes are your Way of doing business. Successful organizations see their Way clearly and constantly refine it. Due to lack of knowledge, this secret ingredient in business is the most neglected of the Six Key Components.

Most entrepreneurs don’t understand how powerful process can be, but when you apply it correctly, it works like magic, resulting in simplicity, scalability, efficiency, and profitability.

Ask yourself: Have you documented the way you want everything done in your organization? Do your people know what processes they are following and why? Are they all executing the required procedures uniformly? Are they skipping steps?

Gaining traction requires two disciplines. First, everyone in the organization should have Rocks, which are clear 90-day priorities designed to keep them focused on what is most important. The second discipline requires implementing what is called a Meeting Pulse at all levels in the organization, which will keep everyone focused, aligned, and in communication.

In summary, successful businesses operate with a crystal clear vision that is shared by everyone. They have the right people in the right seats. They have a pulse on their operations by watching and managing a handful of numbers on a weekly basis. They identify and solve issues promptly in an open and honest environment. They document their processes and ensure that they are followed by everyone. They establish priorities for each employee and ensure that a high level of trust, communication, and accountability exists on each team.

If you’re not happy with the current state of your company, you have three choices. You can live with it, leave it, or change it. If the first two are not an option, it’s time to admit that you don’t want to live this way any longer.

To be truly ready for this change, you must be willing to embrace the following four fundamental beliefs: 1. You must build and maintain a true leadership team. 2. Hitting the ceiling is inevitable. 3. You can only run your business on one operating system. 4. You must be open-minded, growth-oriented, and vulnerable.

Each of your departmental heads should be better than you in his or her respective position.

Best-selling author and highly sought-after speaker Patrick Lencioni summarizes this very point in his book Obsessions of an Extraordinary Executive: The Four Disciplines at the Heart of Making Any Organization World Class. His first rule of building a healthy organization: “Build and maintain a cohesive leadership team.”

You and your leadership team need to understand this, because you will hit the ceiling on three different levels: as an organization, departmentally, and as individuals.

Most companies strive for external growth, but internal growth also leads to future greatness. In fact, most companies need to start with a focus on internal growth before they can even think about external growth. The paradox is that they will actually grow faster externally in the long run if they are focused internally from the outset.

If your organization needs an internal transformation first, be honest with yourself and spend the next one or two years growing internally and honing your business model so it can support external revenue growth.

Above all else, your leaders need to be able to simplify, delegate, predict, systemize, and structure.

Not only will you need to learn how to delegate and elevate, but the people around you will as well. Just as you need to figure out how to build an extension of yourself, your team can also extend the company by building teams under them, thus ensuring the company’s continued growth.

Long-term predicting is the forecast of everything 90 days and beyond. To do so, your leadership team has to know where the organization is going and how you expect to get there. You do this by starting with the far future and working your way back. What is your 10-year target? What is your three-year picture? Your one-year plan? What do you have to accomplish in the next 90 days in order to be on track?

The first step is to agree as a leadership team on what these processes are and then to give them a name. This is your company’s Way of doing business. Once you all agree on your Way, you will simplify, apply technology to, document, and fine-tune these core processes. In doing so, you will realize tremendous efficiencies, eliminate mistakes, and make it easier for managers to manage and for you to increase your profitability.

Lastly, you and your leadership team will need to structure your organization correctly. Your company needs to be organized in a way that reduces complexity and creates accountability. In addition, this structure should also be designed to boost you to the next level. Too many organizations become stuck because they are set in their old ways and unwilling to change to fit their expansion.

In summary, once you understand that hitting the ceiling is inevitable, you and your leadership team must employ these five leadership abilities to reach the next level: (1) simplify the organization, (2) delegate and elevate, (3) predict both long-term and short-term, (4) systemize, and (5) structure your company the right way.

You must have one abiding vision, one voice, one culture, and one operating system.

When systems work at cross purposes, your company is the ultimate loser. You cannot build a great organization on multiple operating systems—you must choose one.

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 a certain area take charge.

most entrepreneurs can clearly see their vision. Their problem is that they make the mistake of thinking that everyone else in the organization sees it too. In most cases, they don’t, and as a result, leaders end up frustrated, staff ends up confused, and great visions are left unrealized.

The process of gaining traction starts here. Clarify your vision and you will make better decisions about people, processes, finances, strategies, and customers.

“If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.”

What is vision? It’s clearly defining who and what your organization is, where it’s going and how it’s going to get there.

By answering the following eight questions and filling out the V/TO, we will clarify exactly what your vision is. Let’s get started. The eight questions are as follows: 1. What are your core values? 2. What is your core focus? 3. What is your 10-year target? 4. What is your marketing strategy? 5. What is your three-year picture? 6. What is your one-year plan? 7. What are your quarterly Rocks? 8. What are your issues?

What are core values? They are a small set of vital and timeless guiding principles for your company.

These core values define your culture and who you truly are as people.

When they are clear, you’ll find they attract like-minded people to your organization. You will also find that when they are applied in your organization, they will weed out the people that don’t fit. Once they’re defined, you must hire, fire, review, reward, and recognize people based on these core values. This is how to build a thriving culture around them.

One important thing to understand is that core values already exist within your organization—they’ve just been lost in the day-to-day chaos. Your task is merely a matter of rediscovering what they are and instilling them as the rules you play by.

The following is the exact process all EOS clients follow for discovering their core values. First, schedule time with your leadership team. I recommend a minimum of two hours,

Have each member list three people who, if you could clone them, would lead you to market domination. These three names should preferably come from inside the organization.

As with all goal-setting activities, your 10-year target must be specific and measurable so that there can’t be any gray areas. You will know the right goal when you have it. It will be the one that creates passion, excitement, and energy for every single person in the organization whenever it’s repeated.

This helter-skelter method may have gotten you to where you are today and helped you survive the early drought, but to break through the ceiling, you have to create some focus.

All of your people will have clear direction on who your ideal customer is, what you’re supposed to be doing for them, and how you will do it. Ultimately, you will know which customers you should and should not be doing business with. That means you can stop trying to be all things to all people.

Marketing strategy is made up of four elements, which are contained in the fourth section of the V/TO: 1. Your Target Market/“The List” 2. Your Three Uniques 3. Your Proven Process 4. Your Guarantee

They no longer waste valuable time with prospects that are not right for them. In addition, they’ve dropped existing customers that are not in their target market and creating stress via unreasonable demands and low profitability.

How to Make The List Have everyone on the leadership team brainstorm what they believe to be the following: • The geographic characteristics of your ideal customers. Where are they? • The demographic characteristics of your ideal customers. What are they? (If you’re marketing business-to-business, consider characteristics such as job title, industry, size, and type of business. If business-to-consumer, then age, sex, income or profession.) • The psychographic characteristics of your ideal customers. How do they think? What do they need? What do they appreciate?

Plainly put, these are what make you different, what make you stand out, and what you’re competing with. If you line yourself up against 10 of your competitors, you might all share one of these uniques. Some of you may even share two, but no one else should have the three you do. You need to settle on three qualities that will truly make your company unique to the ideal customer.

Again, what you’re creating here is focus. The most common mistake that most organizations make involves competing in too many sectors, markets, services, or product lines, and trying to be all things to all people. It’s a game you will not win.

If you believe in your Three Uniques, and you believe they matter to your ideal customer, you should never apologize for them.

The individual uniques don’t have to be different from those of your competition. It’s the combination of all Three Uniques that makes you different. No one else should do all three the way you do.

“Never tell someone something you can show them.”