- "Traction provides a step-by-step plan for startup businesses to navigate their initial stage and overcome growth obstacles. The book outlines 19 actionable strategies for achieving business success, which can help companies become more scalable and efficient by overcoming organizational challenges that hinder growth."
Read through the Traction book’s detailed summary and get the main points to build a business powered by an effective system instead of only willpower.
Chapter 1: The Entrepreneurial Operating System EOS®: Strengthening the Six Key Components
“A proven set of simple, practical tools that synchronizes how people in an organization meet, solve problems, plan, prioritize, follow processes, communicate, measure, structure, clarify roles, lead, and manage.”
The EOS model is comprised of Six Key Components. It consists of vision, people, issues, data, process, and Traction.
Defining clearly who and what your organization is, where it is going, and how it will get there.
Getting the right people into the right jobs.
Hard data of handful numbers gives a true pulse on where things are and where they are off track.
Your organization must be able to identify issues, address them and make them disappear forever.
Your business should be systemized to identify and document the core processes that define the way you run your business.
Business leaders should be able to execute their plans well and know how to bring focus, accountability, and discipline to their organization.
Leadership must manage and strengthen these six components to create a healthy and seamless business. You can determine every business’s health by analyzing these components.
Wickman has devised a 20-question survey to measure a company’s strength in the above six components. The survey is called Organizational Checkup. Most companies score below 50 per cent on this test. Wickman advises keeping checking your organization quarterly in a year. That means one checkup every 90 days, and the company must score above 80 per cent on implementing EOS for it to be healthy.
Chapter 2: Letting Go of The Vine
Most businesses don’t grow beyond a certain limit. This is usually because of the psychological barriers and mindset of the leadership. Wickman warns that for the smooth working of the EOS, the administration must be prepared to change the way they think. He offers four pieces of advice:
Build A Healthy Leadership Team
You can’t be the master of everything. You have to delegate the responsibility of specific areas to the people better equipped than you.
Elevate And Delegate
Remember that you will inevitably hit the ceiling at the individual, departmental, and company levels. To go beyond the top, you must simplify the complex issues, predict issues and develop the right structures for the next phase of progress.
One Operating System
Your organization should depend on and operate only on one system to be on the same page.
You must be honest and willing to face your vulnerabilities and adopt new ideas. You have to risk disengaging with the old ways.
Chapter 3: The Vision Component: Do They See What You Are Saying?
By developing a crystal clear vision for an organization, we create a collective laser-sharp focus that helps activate Traction. Wickman states, “getting everyone in the organization 100% on the same page with where your company is going and how you’re going to get there.”
However, the vision should be well-defined and not vague. Wickman advises the crystallization of an idea by putting it on paper.
Boiling down your vision to simple points or guidelines that can be communicated. Quoting from the book, “a two-page document that helps your leadership team define, document, agree on and share the company vision.”
Eight Questions To Help You Crystallize Vision
These eight questions will help you create your vision in a simple, well-defined form that will bring collective focus.
What are your Company’s Core Values?
Core values are timeless sets of guiding principles for your company. They define your culture and the behaviors you expect from each other. Your core values help you determine who fits and thrive in your culture and who doesn’t. They also help you attract like-minded people to your team.
What is your Core Focus?
Your core focus is the answer to the two questions. Why does your organization exist, and what is your organization’s niche? It will keep you focused on your expertise and the targeted market. With a clear core focus, the company will focus on the people, products, and processes that fit that core. It will keep your company genetically encoded to do what it is meant to do.
What is your 10-Year Target?
The leadership team should clearly understand where they are headed in the next ten years and what the company will look like in 10 years.
What is your Marketing Strategy?
Identify your ideal customers and your plans for serving them. It defines your market strategy.
What is your Three-Year Picture?
Clearly define the outlook of your business for the next three years. It will help in setting targets for one year. A mental picture of your business will facilitate the creation of revenue, profit, and other measurables. It also helps in motivating everyone to work towards the set goals.
What is your One-Year Plan?
Break down your three-year vision into small one-year goals. They should be specific, measurable, and achievable. It will help you facilitate the budget and resources for those set goals.
What are your Quarterly Rocks?
Smaller plans for the next 90 days are called rocks. Employees will be given 1-3 rocks each quarter, whereas leadership team members will typically have 3-7 individual rocks. Setting 90-day priorities will go a long way in achieving long-term goals.
What are your Issues?
Foresee the issues, threats, and obstacles that keep you from achieving your targets.
Chapter 4: The People Component: Right People In The Right Seats
People are the key component of the EOS®. We can’t build a company without people’s help. To run a scalable and successful business, you have to pay attention to the most important essential ingredients of any team, the right people in the right places. The right people are the ones who share your company’s core values and understand the vision and blend in with the company culture. The right seat means that each of your employees operates within their area of greatest skill. It instils passion inside your organization. The roles and responsibilities expected of each employee fit with their Unique Ability.
People Analyzer Tool
The people analyzer tool is a simple tool to analyze people’s fitness to your company’s culture and how well they fit within the company. In addition, it helps you to ascertain their roles and conformity to the company’s business method.
The accountability Chart will clarify the roles and responsibilities of the people in your business. It will help each person in your organization know who to report to. It will facilitate efficient decision-making and problem-solving.
Chapter 5: The Data Component: Safety in Numbers
Numbers cut through subjectivity and present a clear picture. Without the numbers, you can not hold anyone accountable. They create competition and produce results. Through numbers, you can keep a pulse on your business by spotting problems in advance.
“What gets measured gets managed.” Everyone should have something they do to contribute value to the organization that is measured consistently. A measurable is “a single, meaningful, measurable number to guide people in their work.”
You’ll get the true picture by measuring the progress of your numbers with a scorecard.
- Choose 5 to 15 weekly activity-based numbers.
- It will allow you to forecast proactively, identify issues, and take action in the right direction.
- Keep flag categories and numbers that are off track and take corrective action.
Numbers remove subjectivity in the interactions between managers and subordinates.
Numbers will create accountability because everyone understands the expectations.
They create clarity and commitment as everyone understands their numbers and commits to achieving them.
Numbers promote competition among individuals and teams to perform within the organization.
They help us produce results as the numbers that get focused on will improve over time.
Numbers promote teamwork among individuals to work as a team to achieve their numbers.
Numbers help us overcome issues because they lead to proactive and objective problem-solving.
Chapter 6: The Issues Component: Decide!
To create Traction, one must foster a culture that identifies and solves problems regularly. Issues are inherent in all businesses. They are constraints that test our ability to solve them and make us more successful. Therefore, you must be proactive in identifying and solving issues instead of procrastinating.
The Issues List
Maintaining an issues list to anticipate and resolve problems will go a long way in gaining Traction. It is a way of keeping your problems organized in one grouping. Wickman advises creating an open and honest work environment that allows issues to be discussed and reach up to the leadership. The author proposes weekly and quarterly meetings to clarify matters. There are three subcategories of the issues list.
- Vision/Traction Organizer (V/TO) List:
The high-Level company-wide issues do not have to be resolved immediately. Instead, they can be resolved in future quarterly leadership meetings.
- Weekly Leadership Team List:
Such high-level company-wide issues have to be dealt with urgently and can be resolved during weekly leadership meetings.
- Departmental List:
These local-level issues can be pushed down to the department level and resolved during weekly meetings.
Issues Solving Track (IDS)
Instead of beating about the bush and never solving issues, you should solve them promptly and efficiently using the Issues Solving Track. Wickman suggests a three-step approach of Identifying, Discussing, and Solving matters on an ongoing basis.
Chapter 7: The Process Component: The Way of Doing Business
“Systemizing your business by identifying and documenting the processes defining how to run your business.”
Processes are powerful and can result in simplifying, scaling, and productivity. But, an organization should be run through a handful of methods that work together and result in a defined way of doing business. Gino Wickman proposes a 3-step process documenter.
3-Step Process Documenter
By systemizing processes, you can have more control and freedom over work. Here are the three steps of documenting proposed by Wickman
Identification of processes helps in reducing complexity and increasing productivity. Following are examples of core processes.
How to search, find, hire, orient, manage, review, promote, retain, and fire people.
The way you get your message to your target audience and generate interest in what you do and prospects for your salespeople.
How to convert a prospect into a customer.
The way you make your product or provide your service to your customer. It includes project management, customer service, and fulfilment.
The flow and management of all money coming in and going out.
The 80/20 rule means that 20% of documentation should capture 80% of the ideas and steps for a specific process. While capturing the process, look to simplify, remove redundancy, eliminate confusion, and add checklists.
Package all the processes in a handbook that you can use for reference and training. Then, train everyone in the company according to the reference book.
Chapter 8: The Traction Component: Set a Pulse on Your Business
You need two key components to materialize your vision and execute your plans to gain Traction. Rocks and Meeting Pulse. Productive meetings are the backbone of EOS.
Focus on Quarterly Rocks
To maintain focus and momentum, you must break down the long-term goals into short 90-day bursts. People have short-term attention spans, so it is advisable to identify 3-7 rocks yearly.
Set a Meeting Pulse
Meetings are essential for accountability, results, and efficiency. The Meeting Pulse comprises quarterly and weekly meetings where the leadership team meets to drive progress and iron out issues.