by Gino Wickman

Traction will provide you with the principles of running a successful company. This is specifically designed for business owners or team leaders who want to take their organization to the next level. Whether you run a small business or large corporation, the practical tools presented in this book can help you stay consistent, focused on your goals and vision, achieve faster growth, and increase profitability. You can quickly transform your company using a guided system that helps you tackle the most complex business issues and make actionable decisions on time. You will detect the key components that make your business great and how to strengthen them to achieve your business goals. 

The easy-to-understand six-component system presented in this book will give you the confidence to step up your leadership and boost your business results.

Summary Notes

Define and focus on only six key components

“Focus everyone’s energy toward one thing, and amazing results will follow.”

As an entrepreneur, you are probably thinking about hundreds of things while also managing several different aspects of your business. However, only six business components are relevant to achieving your business vision, managing your team, and tracking your priorities. Your focus should be on those six core components. With fewer distractions, you will be able to achieve your goals quicker.

The Entrepreneurial Operating System (EOS) defines and explains these six components as: 

  • Vision: a clear statement that everyone sees and understands.
  • People: seeing your organization as a structure, understanding what’s vital, and then putting the right people in the right seats.
  • Data: having metrics is good, but a Scorecard is better. A Scorecard summarizes five to fifteen actual numbers each week, giving you the ability to identify problems and predict the future.
  • Issues: being transparent is the first way to cross obstacles. As with everything, issues can be categorized and prioritized and thus solved quickly and efficiently.
  • Process: your way of doing business is explicit, documented, and executed correctly. Defining your business process and then training everyone to follow it reduces error and increases your bottom line.
  • Traction: your focus, accountability, and discipline drive progress and your business. High achievers establish priorities for each employee and ensure that each team has a high level of trust, communication, and accountability.

You probably think that this requires a lot of change in your business. Change is scary. But it’s time to shift your thinking. Instead of continuing to hold onto the vine, you need to realize that hitting the ceiling is inevitable. You will reach that point when you need to keep growing, but you can’t break through that ceiling. You repeat the same processes, holding the vine, which leads to no progress. To apply EOS principles, you can take a leap of faith and let go of the vine to move forward. Before you start making changes, ask yourself the following questions to get an overview of your business.

Actions to take

Create a rock-solid vision that will lead to growth

“Never tell someone something you can show them.’’

Do you often ask others, “Do you see what I’m saying?” If the answer is yes, then you would agree with most entrepreneurs. Even though your vision is clear to you, others in your organization don’t see it in the same way. Because of that, grand ideas are left unrealized. 

A vision means defining who and what your organization is, where it’s going, and how it will get there. The best part is that it only needs to fit two pages. The process of gaining traction starts here – let go of everything and develop a clear vision that is not about you but the organization and the greater good. This will help you make better decisions about people, processes, finances, strategies, and customers. 

Working with your sales and marketing team leaders to define your vision is the best approach. This process often involves long talks and discussions. This includes listing all values, focus, and priorities and then narrowing them down to identify the unique values you and your business bring to your clients. These components are what form your vision. 

You will soon realize that your business only needs to focus on a small market share and give your full attention to only a few customers. You win if you don’t try to please everyone. When you have unique values, a core focus, and belief in your organization’s vision, you won’t need to apologize to your potential prospects.

Actions to take

Create an organizational structure with the right people in the right seats

“To break through the ceiling, you must make sure you have the right structure in place to get you to the next level.”

Many entrepreneurs and leaders credit success to having a ‘great team’ or ‘top talent,’ but leaders give different answers when asked to explain the meaning. In a nutshell, it comes down to putting the right people in the right seats. The right people are the ones who share your company’s core values, thrive in your culture, and make your organization a better place to be. The right seat means that each employee operates within their area of expertise or most outstanding skills. The tools presented in this book can help you recognize the best talent and have the right people in the right seats. 

Many entrepreneurs struggle to gain traction because roles, responsibilities, and job descriptions are unclear due to structural issues. You can have the right person in the wrong seat or the wrong person in the right seat. 

The right person-wrong seat happens when you have the right person who shares your core values, but this person is in a position where they can’t utilize their unique skills and ability. You have to either move this person to a different position or let them go, which is not easy. 

On the other hand, the wrong person-the right seat happens when a person is highly productive and excels in a position, but they do not share your core values. Even it seems small, this person is damaging your reputation in the long run, and thus you need to let them go. 

The people analyzer and an accountability chart are tools that can help structure your business where roles, responsibilities, and seats are clearly defined. With the people analyzer tool, you will clarify your current structure and whether you have the right employees. At the same time, the accountability chart will help you assign these people to the right seats. 

The critical question ‘What is the proper structure to move your organization forward in the next six to twelve months?’ will be quickly answered once you apply the action steps in this chapter.

Actions to take

Become proactive with metrics

“Anything that is measured and watched is improved.”

Many entrepreneurs fall into the trap of running a business without data. In other words, they have no data that tells them where they are, where they are going, or if they are heading in the right direction. 

This often causes anxiety because there is no factual information upon which entrepreneurs can rely and decide. Business data helps you manage your business consistently, accurately, and objectively. The scorecard is here to help you track your numbers every week and quantify your company’s results. Thus, you will see patterns and trends and predict the outcome.  At any moment, you can get an overview of your business and see if you are on track to reach your business results.

There is a difference between a scorecard and business statements, such as profit and loss statements. Your profit and loss statement, P&L, is a trailing indicator, and its data comes after the fact, and you can’t change the past. However, with a scorecard, you can influence the future outcome. Think of the scorecard as a proactive tool that helps you anticipate problems and thus act on time. When you give numbers to your goals, you provide more clarity, accountability, and commitment. It is easier to see what is expected of people and solve problems faster. The scorecard is also suitable for creating teamwork. When each department has its goals, you can expect people to work together to reach that goal.

Actions to take

Quickly identify a root cause of an issue

“The better you are at solving problems, the more successful you become.”

It is entirely normal to have issues in your business. But you need to admit that you have them. Successful companies solve their problems on time. Addressing issues is crucial for open, transparent communication and progress. 

Procrastination is one of the significant causes of failure, and unresolved issues can drag your organization and hold you from reaching your vision. Thus, it’s better to admit that a business has problems, discuss solutions, and decide the next steps.

Many companies fall into the trap of spending too much time discussing issues and then never coming to a decision on how to solve them. This happens due to a fear of conflict and lack of commitment. 

It is more critical to decide than what you choose to do. Moving quickly is the key. Find the root of a problem or issue and then propose a solution and act upon it. 

If you think that your issues are one of a kind, you need to change your perspective. The history of business taught us that only a few problems arise. And these come in cycles. What changes is how you approach these issues and how you solve them. Every business will have its way of handling problems, and there might be a different approach to the same problem the second time.

Actions to take

Systemizing core processes can take you a long way

“To break through the ceiling and build a well-oiled machine, you need to possess the ability to systemize.”

Consistency is critical in almost everything you do, and it applies to business as well. The Entrepreneurial Operating System (EOS) process component helps you discover your business core process that makes your business model. This means that you and your employees understand and follow your strategy.

The lack of this cohesion is costing you money, valuable time, and control. That is why it’s essential to rise above and look down on your business to see your process and imagine the business flow. It’s okay to take a two-week vacation without worrying if the company is still up and running.

Every organization has its processes, typically seven core ones (i.e., HR process, Sales and marketing process, Operations process, etc.). These are systemized, and each approach has clearly defined steps and consistent methods. In short, it’s your way of doing business. With this, you control your business instead of allowing your company to control you. 

You will notice inconsistencies and inefficiency when you write your processes on paper. And that is okay because you can fix them and reduce complexity. By listing and documenting your core processes, you will remove redundant steps. By reducing complexity, you can bring more customers and revenue to your business. 

Your core processes address and categorize all critical activities in your business. By calling your methods by consistent names, you increase efficiency in your business and reduce complexity. A good rule of thumb is to follow the 20/80 rule. It’s about having to document only twenty percent that produces eighty percent of the results for your business. It is similar to listing the priorities and focusing on the key activities that bring results. Working on your core processes gives you options. You can grow it, sell it, maintain it, replicate it in another city or country, and step away from it when you are on vacation. It’s about creating a system that works even when you’re not around.

Actions to take

Gain traction with the right priorities

“Gaining traction means making your vision a reality.”

At this stage, your vision is crystal clear, you have the right people in the right seats, you’re managing data, solving your issues, and you have a defined way of doing business. The last piece of the Entrepreneurial Operating System (EOS) puzzle is traction, where you’re making your vision a reality. Most leaders get stuck because there were no concrete actions before creating accountability and discipline. Why? Because these steps require uncomfortable and difficult decisions. This fear of creating discomfort slows the progress to gaining traction. To break a cycle of stagnation, you only need two disciplines to gain traction. And these two are called rocks and meeting pulse. 

Rocks are three to seven most important priorities for the company in the next ninety days. It is easier to achieve something when you break a task or goal into smaller steps. This will encourage you to move forward and shift your focus to only one thing rather than on everything. Your first focus on what’s most important for the first ninety days, and then you move to the next ninety days. Do less, accomplish more. However, this means that you need to spend enough time setting the right priorities. Correct rocks can lead you the right way, but the wrong set of rocks can guide you in the wrong direction and waste valuable time. With time and practice, usually after two quarters, you will master your rock setting process.

Actions to take

Meeting consistency is the key to success

“If you’re on track for the week, then you’re on track for the quarter, and if you’re on track for the quarter, then you’re on track for the year.”

Repeating specific steps each week and a quarter is key to leading a successful business and keeping everyone on track. Meetings don’t have to be dull. They can be fun and productive. However, you have to have some consistency with setting business meetings. This consistency can be called a meeting pulse. 

A meeting pulse can be described as a heartbeat of your business. The longer the meeting intervals, the better are the results. With meetings, you can improve communication which is a crucial component of accountability and making decisions. Quarterly and weekly meetings can achieve the meeting pulse.

It’s like going through a funnel where you started with a big idea or vision, then you crafted your three-year plan, then you moved to a one-year program, and you arrived at a ninety-day plan where you have to be laser-focused on your priorities.  But as you’re progressing from quarter to quarter, you need to align with everyone and keep everyone on track. Hence, productive, quarterly, and weekly meetings are relevant for staying on course and solving issues on time.

Actions to take

Review and revise your key components

“Remember that less is more. When everything is important, nothing is important.”

The Entrepreneurial Operating System (EOS) showed you how all disciplines had been put together to create a complete, practical method for running your business. Each activity, department, process, piece of your organization is split and divided into different categories. Once this categorization is worked out, you can easily spot issues and point out which type needs improvement. 

Undoubtedly, understanding all the tools and steps of EOS and how they work together will make you a master. It will take some time to reach mastery. Nonetheless, it would be best if you stayed consistent with strengthening six components of your business: vision, data, process, people, issues, and traction. Committing time to these six components will help you transform your everyday operations and reach the goals you have for your business. Remember that this is an ongoing discussion, revision, and routine maintenance, so it’s vital to be patient with the process. You will have to make tough decisions along the way to get traction in your business.

Actions to take

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