Traction: Get a Grip on Your Business

An in-depth system for managing your business. The initial exercises were valuable, but the overall system is too rigid for me. I found it strange that the example company went bankrupt before the book went to print.

My Notes

 

The downside is that after making you feel warm and fuzzy about your direction, these same consultants rarely teach how to bring your vision down to the ground and make it work in the real world.

If you want to grow, it’s not possible to maintain a hand in sales, service, accounting, complaints, and follow-up on a regular basis.

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

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.

Your company needs to be organized in a way that reduces complexity and creates accountability.

Dr. David Viscott, author of Risking, wrote, “If you cannot risk, you cannot grow. If you cannot grow, you cannot become your best. If you cannot become your best, you cannot be happy. If you cannot be happy, what else matters?”

Similarly, in your business environment, you have to be willing to be open to new and different ideas.

You must also be growth-oriented to take this journey.

Clarify your vision and you will make better decisions about people, processes, finances, strategies, and customers.

an electronic version of the V/TO can be downloaded free at www.eosworldwide.com/vto.

What is vision? It’s clearly defining who and what your organization is, where it’s going and how it’s going to get there.

To the degree everyone on the team can answer the following eight questions and absolutely agree, you will have a clear vision.

I recommend a minimum of two hours, preferably away from the office, as strategic thinking is always best done off-premises. In that meeting, you proceed as follows:

Most people are sitting on their own diamond mines. The surest ways to lose your diamond mine are to get bored, become overambitious, or start thinking that the grass is greener on the other side. Find your core focus, stick to it, and devote your time and resources to excelling at it.

Aren’t there just as many companies that have found success in other businesses? Basecamp? Coudal? Thoughtbot? The decisions are only brilliant or horrible in retrospect.

Decide what business you are in, and be in that business.

HOW TO DETERMINE YOUR CORE FOCUS First, you and your leadership team should define, with absolute clarity, your two truths: your reason for being and your niche.

Core focus is actually very simple. Don’t overthink it. After reading this section of this book, lock your leadership team in a room for a minimum of two uninterrupted hours.

Start by asking them to write the answers to the two questions below.

1. Why does your organization exist? What is its purpose, cause, or passion?

2. What is your organization’s niche?

Your niche should be simple.

With your niche and your organization’s reason for being crystal clear, you now have a core focus.

The task of clarifying your core focus assumes that you already have a financial model that works. If that’s the case, it’s just a matter of focusing on and executing your vision so that the profit will follow.

What is your 10-year target? Where do you want your organization to be a decade from now?

One common thread unites successful people and successful companies. All of them have a habit of setting and achieving goals.

Built to Last, Jim Collins and Jerry I. Porras found that organizations that have endured for decades share another common practice: They all set massive 10- to 25-year goals.

“You must focus on ends, rather than means.”

HOW TO SET A 10-YEAR TARGET Meet with your leadership team and discuss where you want to take your organization.

everyone how far out they would like to look.

If you try to please everyone, you’re going to lose your ass.

Douglas Rushkoff makes the point that companies have to stop looking everywhere else for the answers.

Rather than hiring marketers and consultants, he urges companies to draw on their own experience, core values, and core competencies (core focus).

Marketing strategy is made up of four elements, which are contained in the fourth section of the V/TO:

1. Your Target Market/“The List”
2. Your Three Uniques
3. Your Proven Process
4. Your Guarantee

Most companies realize that the best way to reach their newly clarified target market is through referrals, using their clients to connect with their prospects.

ZenaComp uses networking.

YOUR THREE UNIQUES Other common marketing terms for this are “differentiators” and “value proposition.”

Plainly put, these are what make you different, what make you stand out, and what you’re competing with.

Some of you may even share two, but no one else should have the three you do.

There is a proven way you provide your service or product to your customers. You do it every time,

What you need to do is capture that process in a visual format to guide your sales team.

it must illustrate your proven process, and it must have a name. It should show each step, from the first client interaction to the ongoing follow-up once your product or service has been delivered.

“Let me show you exactly how we are able to accomplish great results for our customers. We have a proven process that we follow called The (your company name) Difference.”

there is little value in detailed strategic planning beyond a three-year window.

Begin by selecting a future date. I recommend keeping it within the end of the calendar year, thus making it easier for people to envision.

Start by asking your team this question: What is the annual revenue going to be three years from now?

The next step is to agree on the profit number.

After that, you’ll want to determine your specific measurables.

In addition, each person on the leadership team should verbalize his or her vision for his or her individual role in the organization in that time frame.

Most companies make the mistake of trying to accomplish too many objectives per year.

The EOS approach is going to force you to focus on a few goals rather than too many.

The right people are the ones who share your company’s core values.

sales and marketing. In the middle box is the second: operations. In the box to the right, you have the third: finance and administration.

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.

In order to maintain accountability, only one person can ultimately be in charge of any major function within an organization. Only one person oversees sales and marketing, only one person runs operations, and only one person manages finance and administration. When more than one person is accountable, nobody is.

all great organizations have another major function, a role that I like to call the integrator.

I use the term “integrator” to cut through all the wonderful titles for this role, such as CEO, president, general manager, king, or queen. It doesn’t matter what you call it, but the bottom line is that the integrator is the person who has the Unique Ability® to run the organization, manage day-to-day issues that arise, and integrate the three major functions.

The integrator is the glue that holds the company together.

when customizing the Accountability Chart for your company, the three major functions might split into more functions.

besides an integrator integrating the major functions, there’s another very powerful role in the organization. This role shows up above the integrator function, and it’s called the visionary.

The visionary and the integrator couldn’t be more different.

The visionary typically has 10 new ideas a week. Nine of them might not be so great, but one usually is, and it’s that one idea each week that keeps the organization growing.

By contrast, integrators are typically very good at leading, managing, and holding people accountable. They love running the day-to-day aspects of the business. They are accountable for profit and loss, plus the overall business plan for the organization.

GWC stands for get it, want it, and capacity to do it.

The data shows that 80 percent of the time, there’s a change in the leadership team as a result of this process.

If you’re at a point where you have people in more than one seat—for instance, your bookkeeper is also your shipping person and your customer service person—that is okay, as long they have enough time to do both jobs

delegate. If you’re at 120 percent, you’re holding the organization back and probably starting to burn out.

If the only reason you’re not letting go is because of the person occupying the seat, it’s time to make that tough decision. You can’t keep doing this person’s work for him or her.

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? A “yes” on all three confirms that you’re at 100 percent in this essential component.

Imagine you’re on a desert island somewhere. None of you can talk to anyone, access e-mail, or talk on the phone. All you have is a piece of paper with a handful of numbers on it. These numbers must allow you to have an absolute pulse on your business. What are all of the numbers that must be on that piece of paper?

These categories should include items such as weekly revenue, cash balances, weekly sales activity, customer satisfaction/problems, accounts receivable and payable, and client project or production status, to name a few.

THREE SCORECARD RULES OF THUMB

1. The numbers in the Scorecard should be weekly activity-based numbers, not the type of high-level numbers you see in a profit and loss statement (P&L).

2. The Scorecard is much more of a proactive tool, helping you to anticipate problems before they actually happen.

3. When managing a Scorecard, many clients find value in red-flagging categories that are off track.

Think & Grow Rich, Napoleon Hill cited a study that analyzed 25,000 people who had experienced failure. Lack of decision, or procrastination, was one of their major causes of failure.

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

A vital first step is creating a workplace where people feel comfortable calling out the issues that stand in the way of your vision.

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.

The Issues Solving Track consists of three steps:
1. Identify
2. Discuss
3. Solve

Clearly identify the real issue, because the stated problem is rarely the real one. The underlying issue is always a few layers down.

Most people spend the majority of their time at this step. They rarely identify the real problem before they start discussing, and thus they rarely solve anything. They just discuss everything ad nauseam, and they actually think they are being productive.

Sometimes you don’t have to spend much time in the discussion step, because the issue is so clear and the solution is so obvious.

It’s important to note that you cannot jump right to solving issues without implementing the Vision Component first.

Thou Shalt Live with It, End It, or Change It

The Issues Solving Track always follows the three steps: identify, discuss, and solve.

you must take two major steps. First, you have to document the core processes. Second, you have to ensure that they are followed by all.

document the 20 percent that produces 80 percent of the results. In other words, document at a very high level. You should not be creating a 500-page document.

Your people doing things because they’ve always done them that way is not good enough.

This is what people that purchase businesses are looking for: a turnkey system.

A luftmensch is an “air-person,” someone who has his or her head in the clouds.

What are the two disciplines needed to gain traction? First, everyone must set specific, measurable priorities. Second, you must meet better as an organization. These two essentials are called: Rocks and a Meeting Pulse.

You will establish the three to seven most important priorities for the company, the ones that must be done in the next 90 days. Those priorities are called Rocks.

THE EOS QUARTERLY MEETING PULSE
Who: The leadership team
Where: Off-site
Duration: Eight hours
Frequency: Every 90 days
Prework: Vision/Traction Organizer complete  (Everyone brings his or her issues and proposed priorities for the coming quarter)