Traction: Get a Grip on Your Business is a book that I kept on hearing about in some of the podcasts I listen to, and I was really looking forward to reading it. I have to say that it lived up to my expectations 🙂
Think about it as the EOS book, the Entrepreneurial Operating System book. This is the part that caught my eye, the operations part.
Do not mistake this book with Traction: A Startup Guide to Getting Customers which is an interesting marketing reading.
The basic premise of Traction is that you run your business as a self sustaining organism based on the key six components of the EOS (Entrepreneurial Operating System):
- Vision: a compelling and well communicated vision helps focus the company into achieving that one thing.
- People: the right people in the right seats.
- Data: focus on a handful of metrics to help manage your business and free yourself from personalities, egos, emotions and other intangibles.
- Issues: the obstacles you have to overcome to execute your vision.
- Process: your documented way of doing business.
- Traction: with execution you bring focus, accountability and discipline to your company.
This quote the book summarizes it well:
successful businesses operate with a crystal clear vision that is shared by everyone. They have the right people inTraction: Get a Grip on Your Business
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 are not happy with where your company is at, you can live with it, change it or leave it. If you want to do something about it, then you can use the EOS tools to change things (you can start by downloading, reading and using all their toolbox documents and their free tools but I do recommend you read the book).
With a clear vision you will make better decisions about people, processes, finances, strategies, and customers. It has to go from head to paper and shared with everybody in your organization. This will allow them to see where the company is going and if they want to go there or leave.
You need a vision that goes beyond yourself and points to a greater good. It should say who and what your organization is, where it is going, and how it is going to get there.
They recommend using their Vision Traction Organizer and to start with where you see your company in 10 years and work backwards.
Your vision is your core focus, to which you dedicate your time and resources. It should be defined by your reason for being and your niche. Keep it simple and don’t overthink it: it already exists.
Your three year picture will change with the progress and growth of your team and your company.
Your core values are capital. You hire, fire, review, reward and recognize people based on them. Evaluate the core values of candidates before their skill, they matter more. You want core value fit.
They advocate for an open minded, growth oriented and vulnerable (honest) leadership team approach, where you build the vision of the company with a team of leaders that you build too. They should be accountable and able to take initiative in their departments. Your common objective is to do what is good for the company as a whole to reach that vision. Each one of them should be better than you in their position. Everyone should rise to their unique abilities.
Once you have the leadership in place, they have to agree that the company’s problems are their responsibility. Once anyone takes responsibility for a problem they can start solving it.
Because of the way companies grow in spurts, breaking previous ceilings, they need to continually adapt to the new state to break through to the next level as an organization, by departments, and as individuals.
Internal growth leads to future greatness. To accelerate internal growth you need to:
- Simplify the organization
- Delegate and elevate
- Predict both long-term and short-term
- Structure your company the right way
You want to have one vision, one voice, one culture, and one operating system.
Through delegation you elevate yourself and others as long as you let go of the right responsibilities to the right people. Typically these are tasks that you have outgrown. So should do your leadership team.
People need to be able to take risks to grow. Without growing you cannot become your best nor be happy.
Each person should be working within their own unique ability. If you don’t have the right seat for a person you should part ways unless you can allow yourself the luxury of keeping people around because you like them. You are aiming for 100% right people in the right seat.
One of the tools they propose to use in combination with your core values is the People Analyzer:
You set up your own bar and cannot reach perfection. Beyond the core values it is really important to assess if the person understands the role and culture, the systems, the pace and how the job comes together (gets it); wants to do it; and has the capacity to do it.
This should also be done with all the people currently in your organization. Start with the leadership team analyzing each other and then the people under them.
For the people that are not a good fit, follow the Three Strike Rule and communicate the results of the people analyzer (most of the time they’ll improve):
- Discuss issues and expectations and give them 30 days to correct the problem
- If you don’t see improvement, discuss again and give them another 30 days
- If there’s still no improvement the person must go.
You should also have an Accountability Chart that represents the right structure for attaining your goals in the next 12 months. It should include the major functions (at least sales and marketing, operations, and finance and administration) and who is ultimately in charge. There should only be one person accountable for each function, or there will be no accountability.
Then you should also have an integrator that integrates the major functions of the business harmoniously. This is the person that has the unique ability to run the business, the glue that holds the company together.
You should also have a visionary, the entrepreneur that has the ideas, solves the big problems and builds relationships.
First you create the structure, then you add names.
If it is measured it is improved. You are looking for activity based numbers that you are going to review on a regular basis.
Using the three year picture of your vision you decide on the one year plan. You have to have a budget in place to support your plan.
Start with the leadership team and then work it down to every employee. What are your revenue and profit goals? What are the measurables? Which are the three to seven most important priorities that need to be accomplished within this year to reach your three year picture? These are your goals.
Your quarterly rocks are your priorities for the coming quarter. Every 90 days the leadership team comes together and establish the priorities for the next quarter.
Three rules of thumb for the scorecard:
- The numbers in the scorecard should be weekly activity-based numbers that predict your P&L (profits and loss statement)
- You still look at either monthly or quarterly financial statements and monitor your budget
- Red flag categories that are off track.
You should end up with weekly goals and review the scorecard with the leadership team weekly.
Less is more. Rule of thumb is five to 15 numbers. Keep your scorecard simple and understandable even by an outsider. The team has to believe they can hit the goal to hold themselves accountable. One person has to be accountable for updating the scorecard. Everyone accountable for a number should be listed (usually a person heading a major function).
At the end you will be able to see what happened in the last 13 weeks at a glance.
Every person in the company should have a single meaningful and manageable number that guides them in their work. Numbers create accountability, clarity, commitment, and competition. They can also create teamwork and they help you solve problems faster.
Important numbers are on-time completion of projects, margins, and client satisfaction. Quality standards may be included too.
Once you have your rocks you can draft a list of the obstacles you have to tackle to reach to realize them. Put them down in an Issues List. Solve them and take them out of the list. As new issues come up, add them to the list.
You first identify the issues, then discuss them (no tangents, grouping them together and ordering by priority), and then you solve them (action item for someone to do). You are looking for the real issue, not the stated problem. Most causes of real issues are people.
If the issue can be solved at a department level push the issue down so they take care of it.
There’s also a personal issues solving session to ensure that you have a functional and cohesive team.
You need to understand the core processes that make you unique (seven on average). Identify them. They typically include HR, Marketing, Sales, Operations, Accounting, and Customer Retention.
To be fine-tuned processes need to be consistent.
You have to deliver your product or service the proven way every time to produce the same result. Capture this process in a visual and simple way to guide your teams: one single page of paper with three to seven major steps (touchpoints with your clients) and a name for the whole process. Everyone should always use that name when referring to that process.
Bind all your processes together and you have the way of doing business of your company.
Action is the process of doing. You have to be able to create accountability, discipline and to execute.
To reach and manage traction they recommend using clear 90 days priorities for everyone in the organization and a scorecard, much like in the 12 Week Year (summary here). This priorities are what they call rocks, following the rocks, sand and water analogy.
Do the rocks first. By doing less you end up accomplishing more. They are specific, measurable, and attainable.
The moment of truth for accountability are meetings. You can have meetings that are extremely productive and save time. They can increase communication, accountability, team health, and results. Follow the Meeting Pulse of your organization.
You have annual, quarterly and weekly meetings (detailed instructions included in the book). At the end of every meeting the participants share three things>
- Feedback on the meeting
- Whether their expectations were met or not (they expose them at the start of the meeting)
- Their rating of the meeting from 1 to 10 (you want your average to be above 8)
You can take their organizational checkup here to see where your business strength stands. [My result was 61 (above average but room for improvement), but I don’t think it really counts as I’m a single person organization in search of a business (yes, that’s my current business).] The goal is 80 to 100% and the EOS is what they propose as the tool to reach it. The best score ever is 88%. They recommend taking it twice a year. What matters the most here is not the number itself but the progress you’ve made since the last one.
Gino Wickman has written a useful instructional book that should be read in every business school. Traction helps to structure work and to get the things that matter done. It goes along really well with The 12 Week Year (summary) and both stress to work within 90 days (a quarter, three months).
This is definitely a book that I will re-read, to implement it and to refresh my memory (like I’ve done already with Getting Things Done). I wish they made a set of cards like the ones for GTD. They make it much easier to recall and integrate key concepts.
If you are curious about the books I’m reading, check out my Goodreads profile. There are already over a thousand books there.