Traction: Get a Grip on Your Business

by Gino Wickman

The question you’re facing now is a new one: How can you elevate yourself to a position of true leadership?

If you’re like most entrepreneurs, you’re probably experiencing one or more of five common frustrations:

1. Lack of control: You don’t have enough control over your time, the market, or your company. Instead of controlling the business, the business is controlling you.

2. People: You’re frustrated with your employees, customers, vendors, or partners. They don’t seem to listen, understand you, or follow through with thei...

3. Profit: Simply put, there’s not ...

4. The ceiling: Your growth has stopped. No matter what you do, you can’t seem to break through and get to the next level. You feel over...

5. Nothing’s working: You’ve tried various strategies and quick-fix remedies. None have worked for long, and as a result, your staff has become numb to new initiatives. You’re spinning...

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.

Every great system is made up of a core group of basic components. The same applies to a business. The Entrepreneurial Operating System (EOS) identifies Six Key Components of any organization.

VISION

Successful business owners not only have compelling visions for their organizations, but also know how to communicate those visions to the people around them. They get everyone in the organization seeing the same clear image of where the business is going and how it’s going to get there.

The more clearly everyone can see your vision, the likelier you are to achieve it. Focus everyone’s energy toward one thing and amazing results will follow.

PEOPLE

Successful leaders surround themselves with great people. You can’t build a great company without help.

DATA

The best leaders rely on a handful of metrics to help manage their businesses. The Data Component frees you from the quagmire of managing personalities, egos, subjective issues, emotions, and intangibles by teaching you which metrics to focus on.

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

ISSUES

Issues are the obstacles that must be faced to execute your vision.

One helpful by-product of strengthening the first three EOS components is transparency. Execute them properly and you will have created an open organization where there is nowhere to hide. As a result, you will smoke out issues that have been holding you back.

PROCESS

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.

You will not get your company to the next level by keeping your processes in your head and winging it as you go. 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? By deciding what the process is and training everyone to follow it, you will ...

TRACTION

In the end, the most successful business leaders are the ones with traction. They execute well, and they know how to bring focus, accountability, and discipline to their organization.

Vision without traction is merely hallucination.

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.

Most business owners are unable to reach the next level because they are simply not ready to let go of the vine. You might know the feeling; 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. But don’t worry—you won’t have to act until you are comfortable and clear on all of the EOS tools.

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.

You need to change from believing that you are your company and letting it become its own entity. With the right vision, structure, and people in place, your company can evolve and realize its full potential. 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.

Dictatorships not only are exhausting, but also preclude future growth. It’s simple math. One person can only make so many decisions and solve so many problems. You cannot build an enduring, successful organization that lives beyond you if your organization is designed to crumble the minute you step aside.

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

His first rule of building a healthy organization: “Build and maintain a cohesive leadership team.”

Once your team is in place, each member needs to agree that the problems in the organization are also his or her responsibility. Once you take responsibility for a problem, you can help to solve it.

The next leap of faith you have to take is this: As goes the leadership team, so goes the company. Your leadership team must present a united front to the rest of your organization. In a nuclear family, when the child doesn’t like the answer from Mom, he or she might go to Dad. In your company, there can be only one answer, and your leadership team needs to parent everyone to greatness.

Organizations usually expand in spurts, by smashing through a series of ceilings. 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. 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.

In all of these instances, growth is your only option. 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. 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.

The good news is that you can survive hitting the ceiling by choosing a leadership team that possesses five core leadership abilities. Above all else, your leaders need to be able to simplify, delegate, predict, systemize, and structure. To the degree that you and your team apply these five abilities, you will grow to the next level.

Simplifying your organization is key. This entails streamlining the rules you operate under as well as how they’re communicated. The same goes for your processes, systems, messages, and vision. Most organizations are too complex when they begin. Use models, visuals, acronyms, and checklists to simplify processes and procedures, because as your organization grows, it will get more complex.

Your ability to break through the ceiling also depends on your ability to delegate. Be prepared to “delegate and elevate” to your true god-given skill set. You’ll have to delegate some of your responsibilities and elevate yourself to operate at your highest and best use. It’s not practical for you to remain chef, head waiter, and dishwasher as your company grows. By hanging on to all the tiny details, you’re actually constricting the company’s growth.

When you let go, however, you need to make sure you’re letting go of the right duties. The responsibilities that you delegate to other people have to be tasks that you have outgrown. These include things such as opening mail, writing proposals, approving invoices, and handling customer complaints.

Prediction in business is done on two basic levels: Long-term and Short-term.

Long-term prediction.

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?

Long-term predicting is not really about foretelling what will happen; it’s making a decision about what you will do tomorrow based on what you know today.

Short-term prediction. While the long-term view addresses business needs 90 days and beyond, short-term focuses on the immediate future. These are the issues that will arise on a daily or weekly basis, and your ability to solve them will affect the long-term greater good of the organization.

There are really only a handful of core processes that make any organization function. Systemizing involves clearly identifying what those core processes are and integrating them into a fully functioning machine. You will have a human resource process, a marketing process, a sales process, an operating process, a customer-retention process, an accounting process, and so on. These must all work together in harmony, and the methods you use should be crystal clear to everyone at all levels of the organization.

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.