Traction: Get a Grip on Your Business

by Gino Wickman

Your job is to hire, fire, review, reward, and recognize all of your people around core values and Unique Abilities®. That’s the way to build an organization with all of the right people in the right seats.

First, put the names of the people you’re going to analyze in the left column. Then list your core values across the top. Then rate each person according to his or her adherence to the core values. Give one of three ratings: + He or she exhibits that core value most of the time. +/− Sometimes he or she exhibits the core value and sometimes he or she doesn’t. − He or she doesn’t exhibit the core value most of the time.

The “bar” is the minimum standard you will accept from the People Analyzer results. The power of setting the bar is that you give all managers absolute clarity on what is acceptable and what is not. Once managers know your expectations, they will hold their people accountable accordingly. The recommended bar for a company with five core values is three pluses, two plus/minuses, and never a minus. This is strictly my recommendation based on past experience. I have clients with higher and lower bars, so you must decide for yourself. The key point is that anyone who is at or above the bar is the right person, and your goal is to get 100 percent of the right people in your organization.

What is the right structure to move your organization forward in the next six to 12 months?

For this exercise to have impact on your company, you’ll need to instill a few ground rules: 1. You must look forward. You cannot look back or get caught up in the present. It will distort your judgment. 2. You must detach yourself from the existing business, your current role, and your ego. 3. You must elevate yourself above the business, look down on it, and make decisions for the long-term greater good of the company.

In the middle box is the second: operations. In the box to the right, you have the third: finance and administration. You may call them by different names, but those are the three major functions. Sales and marketing generate business. Operations provides the service or manufactures the product, and takes care of the customer. Finance and administration manage the monies flowing in and out as well as the infrastructure.

The integrator is the glue that holds the company together.

Clear accountability will take you to the next level.

To reach the next level, you need the people that report to you to be able to take the ball and run with it.

The point is this: If you’re truly going to commit to building a great company, a strong leadership team, and getting the right people in the right seats, you must prepare for change on your leadership team.

Envision all of your direct reports’ responsibilities, problems, and issues as monkeys. When your direct report walks into your office with a problem, he or she is trying to leave his or her monkey with you. At the end of the day, after multiple people have walked into your office with their problems and left them with you, you end up with 20 monkeys jumping around your office. If someone walks in with a monkey, he or she needs to walk out with it. If he or she can’t or won’t, you’ve hired the wrong person.

At a growth rate of 20 percent, you will make a change to the Accountability Chart about every 90 days.

You must do a little pruning from time to time for the organization to flourish. Merely hoping that poorly fitting people will make it, sending them to a seminar, or giving them a pep talk is like overwatering the plant. It isn’t going to solve the problem. Once you do the necessary pruning, your organization will be revitalized.

If the People Analyzer shows you that someone is the wrong person for your organization, make the decision. And yes, there will be some pain, but only for about 36 hours.

Keep two important points in mind: 1. Be careful what you wish for because you’ll get it. If you want to grow, you have to understand that not everyone is going to be able to keep up and remain in the same seat forever. 2. Keeping people around just because you like them is destructive. You’re doing a disservice to the company, to everyone in it, and to the person. People must add value. I realize this may sound cold, but to the degree people are in the right seats, everyone is happier, especially them.

When a client completes its Accountability Chart, we ask three questions to confirm that it is at 100 percent. Please ask these three questions with your leadership team: 1. Is this the right structure to get us to the next level? 2. Are all of the right people in the right seats? 3. Does everyone have enough time to do the job well?

According to an old business maxim, anything that is measured and watched is improved.

A profit and loss statement is a trailing indicator. Its data comes after the fact, and you can’t change the past. With a Scorecard, however, you can change the future.

Numbers cut through murky subjective communication between manager and direct reports.

Numbers aren’t just for the person. They become a communication tool between manager and direct report, creating the basis of comparison, unemotional dialogue, and, ultimately, results.

Wrong people in the wrong seats usually resist measurables. Right people in the right seats love clarity.

In addition, the use of hard data cuts through all of the subjective and emotional opinions that create murkiness and lengthen the amount of time it takes to make the right decision.

With the vision clear, people in place, and data being managed through a Scorecard, you’re creating a transparent organization where there is nowhere to hide.

Your company is open and honest. Any obstacles that stand in the way of achieving your vision will be apparent. Your job is to now remove these barriers and solve the issues holding you back.

Successful companies solve their issues. They don’t let them linger for weeks, months, and years at a time. Problems are like mushrooms: When it’s dark and rainy, they multiply. Under bright light, they diminish.

As Napoleon Bonaparte said, “Nothing is more difficult and therefore more precious than to be able to decide.”

Your ability to succeed is in direct proportion to your ability to solve your problems. The better you are at solving problems, the more successful you become.

Most leadership teams spend their time discussing the heck out of everything but rarely solving anything. What is draining your energy is not having a lot of work to do; rather, it’s having unresolved issues.

“It is less important what you decide than it is that you decide.” More is lost by indecision than by wrong decisions.

Each unresolved issue is an incomplete project weighing down your organization and holding you back.

It’s normal to have issues. The sooner you can admit that you have them and not view that as negative thinking or some kind of a weakness, the faster you will move forward.

As goes the leadership team, so goes the company. If the leadership team is open and honest, issues will flow freely.

You cannot achieve this openness if people in the organization fear losing their jobs or some other terrible ramification. Therefore, trust starts with you. You set the tone by openly admitting mistakes and issues and then working together to solve them. Everyone must know that it’s okay to raise issues as long as they are corrected.

When addressing issues, leadership teams spend most of their time discussing the heck out of everything, rarely identifying anything, and hardly ever solving something. It’s truly an epidemic within the business world.

Plan on getting a little bit uncomfortable. Most causes of real issues are people. The discussion can hit close to home if either someone on the leadership team or one of his or her staff is responsible. You have to be able to talk about the elephant in the room. That is why trust is so important. You have to become more vulnerable with each other and be willing to be straight about real problems. Remember the greater good.

One helpful context when identifying is to understand that there are three types of issues. One is a true problem that has to be solved. The second is information that needs to be communicated and agreed to by the team. The third is an idea or opportunity that needs feedback, brainstorming, insight, and/or a green light from the team. As a result, in the identify step, it’s the issue owner’s responsibility to make it clear what type of issue it is and what is needed.

Everyone should say what they believe but they should say it only once, because more than once is politicking. In the discussion step, you’ll need to fight for the greater good, not what is best for you or your department. If an issue is starting to hit home and the solution causes you discomfort, you must try not to push the solution in a direction that’s more favorable to you or your team. If you do, you aren’t fighting for the greater good of the company; you’re just protecting your turf. You should have healthy conflict and let the best solution come to light, even if it causes you some pain.

The solve step is a conclusion or solution that usually becomes an action item for someone to do. The item ends up on the To-Do List, and when the action item is completed, the issue goes away forever.

You should make all of your decisions as though you are going to your own Super Bowl—as though you were achieving your vision.

Three types of resolutions will emerge from an issues-solving session. The first is when the issue is solved and requires action. For instance, “John is going to revise the accounts receivable past-due letter to include the new language.” In this case, John takes the action item and completes it, and it is solved. The second is when the issue is merely awareness, and the conclusion is that everyone concurs with that awareness. For instance, “Okay, so we all agree that meetings will start on time.” The third is when the issue needs more research or facts. In this case someone is assigned an action item to do the research and bring it to a subsequent meeting. For example, “Bill will gather the client data for the last two years, and we will make the issue a top priority in next week’s meeting.”

Consensus management does not work, period. Eventually, it will put you out of business. Not everyone will be pleased in these situations, but as long as they have been heard and if the team is healthy, they can usually live with it and will support the decision. From there, you must present a united front moving forward.

In solving an issue, you have three options: You can either live with it, end it, or change it.

Both long-term and short-term pain require suffering. Remember the “36 hours of pain” rule, and solve your problem now rather than later.

To paraphrase philosopher and logician Kurt Gödel, you can’t be in a system while at the same time understanding the system you’re in. In other words, you need to raise your head from time to time and see the system for what it is, whether it’s good or bad. We are normally so buried in the day-to-day scramble that we never take the time to do this. Yet, you’ll see something new every time you do.

To the degree you can clarify your systems and hone them, you will run your business as opposed to having your business run you. The culmination of identifying, documenting, and having everyone follow the core processes of your business is your Way. When you have a clear Way, you immediately increase the value of your business, strengthen your control over it, and give yourself options. From there, you may grow the business, let someone else run it, sell it, or simply take more time off.

In many organizations, people do their jobs however they want, resulting in tremendous inefficiencies and inconsistencies being embedded in the system.

Your core processes typically include the following: The HR process is the way you search, find, hire, orient, manage, review, promote, retain, and fire people. The marketing process is the way you get your message to your target audience and generate interest in what you do and prospects for your salespeople. The sales process is the way you convert a prospect into a customer. The operations processes are the way you make your product or provide your service to your customer. There are typically one to three core processes within operations (e.g., project management, logistics, warehouse, distribution, service technicians, account management, service delivery, production, quality control, customer service). The accounting process is the flow and management of all monies coming in and going out. The customer-retention process is the proactive way that you take care of your customers after your product or service has been delivered and the way you retain customers so that they continue to come back and send you referrals.

The trap many organizations fall into is wasting valuable time trying to document 100 percent of everything. If you document 100 percent of a core process, it might take 30 pages. If you document the most important 20 percent, you should need around six pages.

Your people doing things because they’ve always done them that way is not good enough. With the opportunity to build a well-oiled machine, you must now be able to show them a better way.

“FOLLOWED BY ALL” ACTION STEPS 1. Create your Circle of Life visual. 2. Schedule a company meeting to share your Way or share it at your next quarterly company meeting. 3. Retrain everyone. 4. Manage your people to follow the processes.