Gino Wickman's "Traction": The Summary of 6 Core Components of Entrepreneurial Operating System

If you have a business, then it will require more than just a product or determination to succeed. You will need skills, tools, and systems to optimise your people, processes, execution, management, and communications - and strong guiding principles that can work for your company.

EOS (Entrepreneurial Operating System) is a holistic, self-sustaining system that addresses the 6 aspects of your business, which will enable you to make quicker decisions to change people, strategy, systems, and processes when needed. It will also help you reduce unnecessary complexity, identify and remove distractions, identify and troubleshoot any problems, and keep you and your people engaged and focused on a single vision.

EOS consists of timeless, practical, and universal principles that have been tested in almost every kind of organisation and have been proven to endure for decades.

The 6 Key Components Are:

1️⃣ The Vision Component

Entrepreneurs should clarify their vision and make better decisions about people, processes, finances, strategies, and customers.

This vision should be out of the head and down on the paper. Then it must be shared with the whole team so that everyone can see where the company is going. This will help them figure out whether they there with you.

The 1st step is letting go because the vision you need to clarify is not about you - it has to define something bigger! To learn how to create a strong vision, you first need to answer 8 important questions:

1. What are your core values?

2. What is your core focus?

3. What is your 10-year target?

4. What is your marketing strategy?

5. What is your 3-year picture?

6. What is your 1-year plan?

7. What are your quarterly rocks?

8. What are your issues?
   
   

👀 What are Your Core Values?

Core values define your culture and who you are as people - when they are clear, you will automatically attract like-minded people to your organisation and it will make it easier to weed out people who don’t fit your ideal. Once your values are defined, you should hire, fire, review, reward, and recognise people based on these core values.

Use the below process to discover and define your core values. It should take you a minimum of 2 hours, preferably away from the office to do this:

1. Have each member of the leadership team list 3 people who, if you could clone them, would lead you to market domination - preferably from inside the organisation. Write these names on the whiteboard.

2. Go over the names and list the characteristics that those people embody - what are the qualities they exemplify? What do they do that puts them on the list? Start with a long list to see all the possibilities (e.g. wins, does the right thing, honesty and integrity, compassion, hunger for achievement, fun, fair, encourages teamwork, exhibits modesty, is growth-oriented, helps first, etc.)

3. Your organisation’s core values are somewhere in that long list you’ve created - so narrow them down! In your first edit, circle which ones are truly important, draw a line through the ones that are not and combine those that are similar. After the first round, you should have the list down to somewhere between 5 and 15.

4. Through group discussion and debate, get the list down to between 3 and 7 values - these will be your core values.

The next step in the process is to communicate these core values to the rest of the organisation.

And remember, your core values should become a guiding force in your organisation and should be incorporated into your hiring process. All candidates should hear your values speech and understand who you are - this will make it much easier for you to find people with the right skill set, attitude and cultural fit.

👓 What Is Your Core Focus?

Businesses can get easily distracted by opportunities and lose their focus. While a new idea may look like a great idea on paper, it’s simply not worth doing if it’s not a part of your core focus.

When your core focus is clear, you will come to several important realisations: certain practices, people, divisions and/or product lines don’t fit into your core focus.

So, decide what business you are in and be in that business only - those who chase many things do not succeed in getting any of them.

You have to figure out what you are genetically encoded to do - the combination of your talents and passions combined with your leadership creates something unique that no other company has, and that something is your core focus.

You must uncover what it is.

How to determine your core focus:

You and your leadership team should clearly define your 2 truths:

1) your reason for being and

2) your niche.

Spend 2 hours of uninterrupted time with your leadership team to write the answers to these 2 questions. Once done, go around the table and have them share what they’ve written. Then, open up the discussion for debate and talk as a group as long as you need to.

Do this with both questions, one at a time, until you’re on the same page and have each answer down to just a few words - avoid overthinking and overanalysing.

1) Why does your organisation exist, what is its purpose, cause, or passion? When your purpose, cause, or passion is clear, you won’t be able to tell what business you’re in - you should be able to take it into any industry. It should meet all of the below 8 points:

• It’s stated in 3 to 7 words;

• It’s written in simple language;

• It’s big and bold;

• It has an “aha” effect;

• It comes from the heart;

• It involves everyone;

• It’s not about money;

• It’s bigger than a goal;

2) What is your organisation’s niche? Your niche should be simple. It will ultimately become a filtering mechanism for your team to make its decisions as you move forward. “Do one thing and do it better than anyone.”

With your niche and your organisation's reason for being crystal clear, you now have a core focus. Once your core focus is clear, you’ll need to stay true to it. If a new business opportunity doesn't fit, don’t do it. If someone on the leadership team tries to throw something incongruent over the wall, throw it back. Let it be your filtering mechanism for all future decisions.

Once your core focus is clear, your people, processes, and systems can be put in place to drive it with consistency. Until you have exhausted every opportunity in your core focus, don’t allow yourself to get distracted by the shiny stuff -it's not worth your time!

🙏 What is Your 10-Year Target?

The next question you have to ask yourself is where do you want your organisation to be in 10 years' time.

All successful people and companies have a habit of setting and achieving goals. Those who have achieved massive growth set 10 to 25-year goals that can be referred to as BHAGs - Big, Hairy, Audacious Goals. It's a long-term vision that is so daring in its scope that it seems impossible. This is the one larger-than-life goal that everyone is working toward, the thing that gives everyone in the organisation a long-range direction.

How to set your 10-year target:

Meet with your leadership team and discuss where you want to take your organisation. Even though your core values and core focus are already present within your organisation, your 10-year target will be different.

Once you decide on this 10-year goal, make sure that everyone is motivated by it and is on the same page. This goal must be specific and measurable. The right goal will be the one that creates passion, excitement, and energy for every single person in the organisation.

What Is Your Marketing Strategy?

You need to create a laser-sharp focus for your sales and marketing efforts - this will enable you to sell and close more of the right business. It will become the foundation upon which you create all future materials, plans, messages, and advertising.

Marketing strategy is made up of 4 elements:

1) Your Target Market (The List): Know your target market demographic, geographic, and psychographic characteristics as this will allow you to create a filter of which comes The List of perfect prospects for your organisation and sales team to target.

How to do this:

Have everyone on your leadership team brainstorm what they believe to be the following:

• The geographic characteristics of your ideal customers. Where are they?

• The demographics of your ideal customers. What are they (e.g. job title, industry, age, income, etc.)

• The psychographic characteristics of your ideal customers. What do they think? What do they need? What do they appreciate?

With the answers to these, go to work on creating The List, which consists of the key contact information for each prospect. It should take some work and should involve a combination of examining your current prospect list, generating referrals for existing business, reading trade publications, purchasing lists, asking around, and telling your salespeople to keep their ears to the ground. Then, determine the best way to reach these people by using your clarified marketing strategy.

2) Your 3 Uniques: Settle on 3 qualities that will truly make your company unique to the ideal customer. Your salespeople should be able to say something like this to your potential customers: “If you’re looking for that, we probably aren't the company for you. What we excel at are these 3 things.”

If you believe in your 3 Uniques, and you believe they matter to your ideal customer, you should never apologise for them.

How to choose your 3 Uniques:

Consider including your sales team in the marketing strategy sessions for this activity. List everything that you believe makes your people, company, product, or service. What do your ideal customers think is unique about you?

The individual uniques don’t have to be different from that of your competition - it’s the combination of all 3 Uniques that makes you different. No one else should do all three the way you do.

3) Your Proven Process: Any company's proven process typically has 3 to 7 major steps. Creating a standard proven process to use in selling situations will give you two very powerful advantages: it will increase your potential customers’ confidence and peace of mind in doing business with you & it will make you stand out among the competition as most companies don’t illustrate how they work.

How to create your proven process:

Step 1: With your team, illustrate on a whiteboard what you believe are the major steps in your proven process and then give each step a name. The rule of thumb is 3 to 7 steps.

Step 2: Then add 2 to 5 bullet points under each item for your salespeople to use as talking points when selling to a prospective customer.

Step 3: Give your proven process a name, or simply call it something like “Our Proven Process”.

4) Your Guarantee: A guarantee is your opportunity to pinpoint an industry-wise problem and solve it. This is typically a service or quality problem.

Your guarantee also forces your team to deliver on it. This in turn forces you to look inward and make sure you’ve got all the right people, processes, and systems in place to do so.

How to select your guarantee:

The ideal guarantee is backed up by a tangible penalty if you don’t deliver on it and it must drive more business or enable you to close more of what you’re not winning. If you have a hard time calling it a guarantee, you can call it a pledge, commitment, or even a promise instead.

Once you know what your guarantee is, you will be able to communicate a consistent marketing strategy for the entire organisation to support. This becomes the foundation for all of your sales and marketing materials, messages, and presentations moving forward.

What is Your 3-Year Picture?

Schedule an hour with your leadership team and select a future date (keep it within the end of the calendar year), making it easier for people to envision.

Then, determine the revenue picture and ask your team “What is the annual revenue going to be 3 years from now?” You should find out that your leadership team is in sync with how fast you want to grow - you will typically get a range but you will need to settle on just one number.

Next, agree on a profit number. This will be a similar conversation but should be settled much more quickly. After that, you’ll want to determine your specific measurables as they give everyone scope and size. It might be a number of clients, units, or widgets produced.

Once you have determined your numbers, have everyone on your leadership team take a few minutes and write down bullet points of what the organisation will look like on that date 3 years from now. They should consider such factors as the number and quality of people, added resources, office environment, size, operational efficiencies, systemisation, technology needs, product mix, and client mix.

What is Your 1-year Plan?

Now focus on bringing your long-range vision down to the ground and make it real! This means deciding on what you must get done this year. Less is more here, because when everything is important, nothing really is.

How to create your 1-year plan:

Schedule 2 hours with your leadership team. When everyone is sitting at the table, decide on the future date but keep it within either a calendar year or your fiscal year, regardless of where you are in the year.

As with the 3-year picture, again, decide on the numbers. What is your annual revenue goal? What is your profit goal? What is the measurable? This number should be consistent with the 3-year picture measurable.

With the 3-year picture in mind, discuss, debate, and decide, on the 3-7 most important priorities that must be completed that year for you to be on track for your 3-year picture. These will be your goals.

What are Your Quarterly Rocks?

Once your 1-year plan is clear, you need to narrow your vision all the way down to what really matters: the next 90 days. You should determine what the most important priorities are in the coming quarter.

The focus of the Rocks is what makes this process so productive.

Most organisations enter the next quarter battling on all fronts and by making everything a priority, accomplish very little.

What are Your Issues?

Accept that you will always have issues. Your success is in direct proportion to your ability to solve them.

Issues can be identified quickly (in 15 minutes) when using the below exercise:

Ask the team to think of the obstacles, concerns, and opportunities you face in achieving your vision, then ask them to share their opinions. Through answering the 8 questions above as a team, most of the issues will emerge. They will come up when your team says something like, “but what about…” and “we can’t do that because…”

All issues you identify together must go into your Issues List.

2️⃣ The People Component 🤸‍♀️

Successful leaders surround themselves with great people - you can’t build a great company without help.

The 2 essential ingredients of any great team are the right people in the right seats.

The right people are the ones who share your values and fit in your company’s culture.

The right seat means that each of your employees is operating within their area of expertise and passion. Moreover, it’s when the roles and responsibilities expected of each member of the team fit with their Unique Ability (when their superior skill is noticed by others who value it).

A person with this ability experiences a never-ending improvement, feels energised, is never drained, and has a passion for what they are doing that presses them to go further than others would in this area. When a person is operating in his or her Unique Ability, it means that he or she is in the right seat.

When creating a structure to function efficiently within your organisation, you must take the long view. This sometimes means eliminating or changing seats that are no longer relevant. To break through the ceiling, you must make sure that you first have the right structure in place to get you to the next level. This leads to the Accountability Chart - the ultimate tool for structuring your organisation the right way, defining roles and responsibilities, and clarifying all the seats you need to fill in your organisation.

Unique Ability + Accountability Chart = Right Seats

As you move forward, you’ll experience 2 types of issues:

1) having the right person in the wrong seat;

2) having the wrong person in the right seat;

In order to gain traction, you’ll need to address them both!

The right person in the wrong seat

This is when you have the right person but they are not truly operating in their Unique Ability. It can happen if a person has been promoted to a seat that is a bit too big, has outgrown a seat that is too small, or has been put in a position that does not utilise his or her Unique Ability. It might be that this person is where he or she is because he or she has been around for a long time, you like him or her, or he or she is simply a good addition to the team.

Until now you probably believed that you were helping this person by promoting to the existing seat but you were actually hindering his or her growth and the growth of the company. As such, you’ll need to move this person out of that seat and into a seat that is right for this person, one where he or she can successfully utilise his or her Unique Ability.

Wrong person, right seat

This is when the person excels at what they do, is extremely productive, and is clearly in his or her Unique Ability, but he or she does not share your core values. While this might not seem too bad at first, the person is actually killing your organisation in the long run. He or she is chipping away at what you’re trying to build, in little ways that, most of the time, you don’t even see.

No matter how difficult the issue is, you have to make a good business decision for the long haul and that means that you must let his person go for the sake of the greatest good.

There is, of course, a third people issue as well - wrong person, wrong seat, but the solution here is obvious. And this is that you must let them go.

The reality is that you won’t probably need to fire that many people, most people will leave on their own once your core values become known and they do not share them.

Right seats

A seat cannot be created until the organisation is structured in the right way so as to lift your company to the next level. To create that structure, you’ll need to use an Accountability Chart, which will help you and your leadership team to grasp their own roles and responsibilities.

It starts with the belief that there are only 3 major functions in any business that make every organisation run: sales/marketing, operations, and finance.

As such, all 3 of these functions must exist in all organisations and must be strong. If any of these 3 functions is weak, then your organisation cannot be as effective. As you construct your Accountability Chart, start by creating its structure first - do not put any names in any boxes yet. Focus on illustrating the correct functions at all levels in the organisation.

When you’re finished, the chart should look like an organisational chart, with 5 bullets that illustrate the major roles of each function. The Accountability Chart will clarify function, role, and reporting structure but it WILL NOT define communication structure. Your communication should flow freely across all lines and departments when necessary, creating an open and honest culture.

Integrator

The integrator is the person who harmoniously integrates the major functions of the business (CEO, president, general manager). The integrator is the person, who has the Unique Ability to run the organisation, manage day-to-day issues that arise, and integrate the 3 major functions. In other words, the integrator is the glue that holds the company together. So the integrator will be at the top of the Accountability Chart, overseeing the 3 major functions of sales/marketing, operations, and finance.

Visionaries

They are typically very creative and are invaluable. They are great problem solvers, and fantastic with important clients, vendors, suppliers, and banking relationships. The company culture is very important to them as they typically operate more on emotion and therefore have a better barometer of how people are feeling. If you’re one, know yourself and be free.

Integrators, on the other hand, are typically 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, and the overall business plan for the organisation. They remove obstacles so that people running the major functions can execute them. They are also good at special projects and operate more on logic. If you’re one, know yourself and be stressed.

You need both at the top of the company as the visionary’s (entrepreneur’s) lust needs to be counterbalanced with a manager’s (integrator’s) prudence and discipline.

Problems can arise when the company has only a visionary but not an integrator, as he or she will be sucked into needing to behave as an integrator and getting pulled into the day-to-day management of the business (which they do not like).

Your Leadership Team

With the completion of your Accountability Chart, the visionary, the integrator, and the people heading up the major functions will become your leadership team.

Your completed chart will clarify who is accountable for what and with this level of clarity, it’s time for you to put all the right people into the right seats. To do this, you‘ll need only one filter: GWC, which stands for get it, want it, and capacity to do it.

To reach the next level, you need the people who report to you to be able to take the ball and run with it. If they are not able to take charge, it’s because one of the G, W, or C is missing.

Get it simply means that people understand their role, the culture, the systems, the pace, and how the job comes together.

Want it means that they must really like the job. They understand the role and they want to do it based on fair compensation and responsibility.

The capacity to do it means having the time as well as the mental, physical, and emotional capacity to do a job well.

Sometimes, a position might require a commitment of 55 hours a week where the person is only willing to commit 40, or they might not have the intellectual, emotional, or physical capacity to do what’s required of them.

When you evaluate your team and understand that they work at their full capacity, they will need to start delegating and elevating the excess they can no longer cover themselves well, as otherwise he or she will be holding the organisation back. In this case, sometimes the person might need to be moved into one seat rather than the two he or she is occupying now, expanding the Accountability Chart.

3️⃣ The Data Component 📊

Anything that is measured and watched is improved.

The Data Component will enable you to have a pulse of your business on a weekly basis, predict future developments, and quickly identify when things have fallen off the track. By regularly reviewing the numbers, you’ll be able to quickly spot and solve problems as they come rather than react to bad numbers in a financial statement long after the fact.

Below is a step-by-step process for creating a Scorecard that fits your unique business:

Step 1: Spend an hour with your leadership team and imagine you’re on a desert island somewhere, where you can’t talk to each other or use the phone or email. All you have is a piece of paper with a handful of numbers, which 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?

Make a list of all the categories that you’d need to track on a weekly basis. These categories should include such items as revenue, cash balances, sales activity, customer satisfaction or problems, accounts receivable, and payable, and client project or production status… As a rule of thumb, you should always end up with 5 to 15 numbers but the less the better.

Step 2: Decide who is accountable for each of the numbers (choose only one person for each). This person will need to be responsible for delivering that weekly number to the organisation.

Step 3: Decide and fill in what the expected goal is for the week in each category - the goal numbers in your Scorecard should be tied directly to your 1-year plan.

Step 4: Review your Scorecard weekly to ensure that you’re on track for your vision.

3 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. One category would be new revenue/sales. If you only monitor revenue as it comes in, you’ll react to downsides too late.

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

3) When managing a Scorecard, many find value in red-flagging categories that are off track. Red-flagging occurs when one of your numbers does not hit or exceed the goal for the week.

There are 8 advantages to everyone having a number:

1. Numbers cut through murky subjective communication between managers and direct reports.

2. Numbers create accountability. When you set a number, everyone knows what is expected of them and what their targets are.

3. Accountable people appreciate numbers whereas wrong people in the wrong seats usually resist them.

4. Numbers create clarity and commitment. When an employee is clear on his or her commitment and agrees that he or she can achieve it, you have commitment.

5. Numbers create competition.

6. Numbers produce results - what gets watched improves.

7. Numbers create teamwork. People will work together to figure out ways to achieve a specific number, whereas those who do not pull their weight will be called out by other members of the team.

8. You solve problems faster. When an activity-based number is off track, you can attack it and solve the problem proactively.

4️⃣ The Issues Component 🔍

There really are only a handful of different kinds of issues in the world of business. The same ones come up over and over again. In time, you will become an expert at identifying them, discussing them honestly and learning to knock them down to achieve your vision.

The Issues List

You will need to create a culture at work where people feel comfortable calling out the issues that stand in the way of your vision. Promote being open with each other at all times as this will lead to an open and honest organisation, then issues will flow freely.

You should have 3 types of Issue Lists:

1. Company vision-related issues that can be shelved beyond 90 days and should be tackled in future quarterly meetings - not a big enough priority for this week or this quarter but should be stored somewhere so that you don’t lose sight of them (e.g. new product ideas, key employee issues, technology needs, office relocation, capital needs, HR policies, etc.)

2. The weekly leadership issues - the time frame here is much shorter and these are all of the relevant issues for the week and quarter that must be picked up at the highest level. They can include rocks that are off track, a bad number in the scorecard, key employee issues, major client difficulties, and process and system-related problems.

3. The weekly departmental meeting issues - these are on a more local level and include all the relevant departmental issues for the week. E.g. the sales team might have hitting call numbers, presentations, closing business, marketing, and presentation materials on their list while the operations team might have fulfilling orders, purchasing, customer complaints, and low production numbers on theirs.

The Issues Solving Track

The Issues Solving Track consists of 3 steps:

1. Identify the real underlying issue because the stated problem is rarely the real one but a symptom of the real issue. You must find the root of the matter. Most causes of real issues are people so you have to be ready to get a little uncomfortable. The time spent identifying the real issue can take far longer as the root problem may have multiple symptoms.

2. Discuss the issue with the wider team, allowing everyone to say what they believe only once. In the discussion step, you’ll need to fight for the greater good, not what is best for you or your department. Don’t be afraid to have a healthy conflict and let the best solution come to light, even if it causes you some pain.

3. Solve the issue. This 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 disappears forever.

As you master this 3rd step of the Issues Solving Track and become stronger at solving your issues, your team must internalise the following 10 important aspects of solving issues:

1. on a healthy team where the vision is clear and everyone is on the same page, 8 out of 10 times everyone will agree with the solution. However, sometimes they won’t and someone needs to make the final decision. Not everyone will be pleased in these situations but they will be able to live with them most of the time.

2. The solution will always be simple but not always easy to implement. You must have a strong will, have firm resolve, and be willing to make the tough decision.

3. It’s less important what you decide than it is that you decide.

4. You cannot solve an issue involving multiple people without all the parties present. If the issues at hand involve more than the people in the room, schedule a time when everyone can attend.

5. Put your egos, titles, emotions, and past beliefs aside. Focus on the vision for your organisation and cut through the candy-coating, personalities, and politics.

6. Take issues one at a time, in order of priority. What counts is not quantity but quality. You’re never going to solve them all. Solve the most important one first, and then move on to the next.

7. You only have these 3 options when solving issues. If you can no longer live with the issue, you have two options: change it or end it. If you don’t have the means to do those, then agree to live with it and stop complaining.

8. Both pains require suffering so it’s best to solve your problem now rather than later.

9. The issue that you fear the most is the one you most need to discuss and resolve.

10. Taking a shot means that you should propose a solution. Don’t wait around for someone else to solve it. If you’re wrong, your team will let you know.

5️⃣ The Process Compotent 💫

Your processes are your way of doing business. Successful organisations see their way clearly and constantly refine it. Due to a lack of knowledge, this secret ingredient in business is the most neglected of the 6 Key Components. Most entrepreneurs don’t understand how powerful a process can be, but when you apply it correctly, it brings simplicity, scalability, efficiency, and profitability.

You will not get your company to the next level by keeping your process in your head and winging as you go. You must document the way you want everything to be done and why! By deciding what the process is and training everyone to follow it, you will enhance your troubleshooting abilities, reduce errors, improve efficiency, and increase your bottom line.

A typical organisation operates through a handful of core processes. How these processes work together is its unique system. To break through the ceiling and build a well-oiled machine, you need to possess the ability to systemise.

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 time off.

To systemise your organisation through your core processes, you must take 2 major steps:

1) You have to document the core processes;

2) You have to ensure that they are followed by all.

Documenting Your Core Processes

There are 3 stages in documenting your Way:

1. Identify your core processes;

2. Break down what happens in each one and document it;

3. Compile the information into a single package for everyone in your company;

Identify Your Core Processes:

Schedule an hour with your leadership team and ask them to identify and agree on what your core processes are. Once you start the discussion, you’re going to find you have different names for them and how many there are! But your core processes typically include the following:

• The HR process - the way you search, find, hire, orient, manage, review, promote, retain, and fire people.

• The marketing process - 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 - the way you convert prospects into customers.

• The operations processes - the way you make your product or provide your service to your customer: e.g. project management, logistics, warehouse, distribution, service technicians, account management, service delivery, production, quality control, customer service.

• The accounting process - the flow and management of all monies coming in and going out.

• The customer-retention process - the proactive way that you take care of your customers after your product or service has been delivered and the way you retain customers.

💡 You’ll need to identify all processes you have for every activity going on in the business, then list them in one document and make sure that your leadership team is on the same page with what they are and how many there are.

After you identify all the core processes and have a name for each one, everyone must call each of them by the exact same name from this day forward. E.g. if the way you manage your accounts is called the Customer Care Process, everyone must call it that.

Document Each Of the Core Processes:

The person who is accountable for a certain process should be the one documenting it. The integrator should own the entire project, making sure everyone is clear and on track. To avoid wasting time, make sure you’ve completed the first step of identifying your core processes before you start documenting.

When documenting the process, you should follow the 20/80 rule - document the 20 per cent that produces 80 per cent of the results. That is, document at a very high level! DO NOT create a 500-page document. The 20/80 rule will give you the highest return on your time invested.

Simply capture the basic steps in the process, because people are skipping steps, and not always on purpose.

So, document the steps in the process at a very high level, with several bullet points under each step which are procedures. This way, you can make sure everyone is following the process.

Here is an example of the HR Process:

• Step 1: The Search

  • Define role/job description/salary (the seat)

  • Decide search medium

  • Begin search

  • E-mail 20 sphere/peers
    

  Step 2: Interviewing

  • Screen resumes

  • Initial interview/profiling tools

  • Second interview

  • Check references

  • CEO interview/core value speech
    

  Step 3: Hiring

  • Eight-hour on-the-job trial

  • Decision

  • 90-day trial
    

  Step 4: Orientation:

  • HR policy/review employee manual

  • Benefits review/forms

  • Position training

  • CEO orientation (company story/culture)
    

  Step 5: Quarterly Reviews

  • The manager fills out the People Anayser in preparation for the review

  • Follow the review checklist

  • Review the People Analyser

  • Document the review and have it signed by all parties

  • File review with HR department
    

  Step 6: Termination

  • Three-strike rule with documentation

  • Terminate upon third strike

  • Contact legal counsel

  • Meet with an employee / have HR present

  • Exit interview

  • Document termination and have it signed by all parties
    

  Step 7: Ongoing Benefits Management

  • 401K management

  • Bonus plan

  • Health insurance

  • Employee files
    

As you simplify, most of the time you will find that your core processes are too complex. By documenting the process, you will find many opportunities to dumb them down by eliminating redundant steps and taking out any confusion and complexity. The goal here is to streamline.

Eliminate steps, condense steps, and put checklists in place where possible. You should make your processes bulletproof so that no one can screw them up.

Another advantage of simplifying each of the processes is to discover where you can apply technology. Find software systems that can connect your core processes and eliminate redundant steps.

Your business has to become self-sustaining and be able to run WITHOUT YOU.

Package it

The tiles of your core processes now become your table of contents. Each documented process in Step 2 becomes one of your sections. Put them in a binder or on your company intranet. On the cover, put your company name followed by the word “Way”. If your company name is the ABC Company, then it should read “The ABC Company Way”. Your Way is now ready to use for reference and training.

When everyone follows their process, it’s much easier for managers to manage, troubleshoot, identify and solve issues, and therefore grow the business. Now your business is more scalable and you can add more customers, transactions, revenue, and employees while reducing complexity.

Strengthening the Process Component will give you more control. Now you will have options with your business: grow it, step away from it, sell it, maintain it, franchise it, or duplicate it in another city.

6️⃣ The Traction Component 🔥

As with all the steps along the way, this one requires a total commitment from the leadership team.

Gaining traction required 2 disciplines:

1) Everyone in the organisation should have Rocks, which are clear and specific 90-day measurable priorities, designed to keep them focused on what is most important;

2) Implementing Meeting Pulse at all levels in the organisation which will keep everyone focused, aligned, and in communications.

Rocks

Now that you have a clear long-term vision in place, it's time to establish 3-7 most important short-term priorities for your company that must be done in the next 90 days. These priorities will be your Rocks.

Each member of your leadership team and your employees should have Rocks and they all should focus on a limited number of priorities at once.

This is how the process works:

Your team meets for a full day every 90 days. You review your vision and then determine what the Rocks are for your organisation for the next 90-day period to keep you on track for your vision.

Establishing your Rocks

💡 A Rock is specific, measurable, and attainable. For example, “Close three core accounts” or “Hire a new controller”. A Rock must be clear so that at the end of the quarter, there is no ambiguity whether it was done or not.

Step 1: Review your vision and have your leadership team list everything on the whiteboard that has to be accomplished in the next 90 days (around 10-20 things);

Step 2: Discuss and debate together to determine which of these 10-20 things are the most important priorities for the company in the next 90 days. Decide on each one whether to keep it, kill it, or combine it as company Rocks for the quarter. Continue doing this until you get to 3 to 7 priorities;

Step 3: Once you have your final list, set the date that the Rocks are due. This is typically by the end of the quarter. Then define each one by making sure the objectives are clear;

Step 4: Assign who owns each Rock. Each of the Rocks must be owned by one and only one person on the leadership team;

Step 5: Once the company Rocks are set, the members of the leadership team should each set their own Rocks by carrying forward any company Rocks that they own to their individual list of Rocks and then coming up with their most important 3 to 7 priorities (some of the discarded Rocks in Step 2 for the company can end up becoming individual Rocks for the leadership team members);

Step 6: Finally, create a Rock Sheet - a landscaped piece of paper, where you write the organisation’s Rocks at the top, and below - each of the leadership team’s individual Rocks. You can then bring this sheet of paper into your weekly meetings to review them to help create accountability and focus on the highest priorities in the organisation;

Step 7: Share the company Rocks with the entire organisation for visibility. Every quarter you should meet with the entire organisation for your state-of-the-company meeting for no more than 45 minutes to share successes, progress, and the company's Rocks for the quarter;

Step 8: Have each department set their Rocks as a team the same way as the leadership team does. In the end, each employee will have his or her own Rocks for the quarter, but they should limit them to only 1 to 3.

💡 Once the priorities are set for the quarter, no new priorities can be added! If someone does try to throw something else over, you get to throw it back because you all agreed on the current Rocks as being the most important priorities for the quarter. If new ideas arise, just put them on the Issues List for the next quarter.

Meeting Pulse

The Meeting Pulse consists of 2 types of meetings - quarterly (The 90-day World) and weekly.

The 90-Day World

• Who: The leadership team

• Where: Off-site

• Duration: 8 hours

• Frequency: Every 90 days

• Pre-work: Vision/Traction Organiser complete (everyone brings his or her issues and proposed priorities for the coming quarter)

• Agenda:

  • Seque
    Each member of the leadership team should share 3 things:
    1) best business and personal news in the last 90 days;
    2) what is working and not working in the organisation;
    3) expectations for the day;
    

  • Review the previous quarter
    Review all of your numbers (quarterly revenue, profit, gross margin, and any other relevant key numbers) and your Rocks (company and leadership teams on the Rock Sheet) from the previous quarter to confirm which ones were achieved and which were not - to give you a clear picture of how you performed. Then you have 1 of 3 options with incomplete Rocks:

    • Carry the Rock forward to the next quarter

    • If the Rock is 95 per cent complete, completing the last 5 per cent simply becomes an action item for the To-Do List.

    • Reassign the Rock to someone else.
      

  • Review the Vision/Traction Organiser
    The sole intent of reviewing it every quarter is to refresh your memory on the vision and to make sure that everyone is still on the same page. You will set much better Rocks for the next quarter within that framework.
    

  • Establish next quarter’s Rocks
    With the stage set from your segue, clarity on your results from the review of last quarter’s Rocks, your vision clearly in mind, and your Issue List in front of you, you now follow the Rock-setting process. List everything that must get done this quarter and decide to keep, kill, or combine everything on the list, boiling down to the right 3 to 7 Rocks for the company and assigning ownership. Then, establish each leadership team member’s Rocks and give them to one member to create the Rocks Sheet.
    

  • Tackle key issues
    With your Rocks set, you will have another 1-4 hours left in your meeting - use them to tackle all your relevant issues for the quarter. Tackle the remaining issues following the Issues Solving Track - Identify, Discuss, and Solve (IDS). Establish the top 3 issues, then start with number 1 and work through the list in order of priority. Remember to identify the real problem for each issue, then openly discuss all aspects of it, getting all opinions out on the table with no tangents.
    

  • Next Steps
    This part of the quarterly meeting is typically short. Everyone should discuss any next steps of who is doing what and whether there are any messages to communicate to the organisation based on the decisions made in the meeting.
    

  • Conclude
    Ask everyone to share 3 things to conclude the meeting:
    1) feedback on the meeting,
    2) whether their expectations were met or not,
    3) their rating on the meeting from 1 to 10. The standard to average should be 8.

The EOS Annual Meeting Pulse

• Who: The leadership team

• Where: Off-site

• Duration: Two days

• Frequency: Every year

• Pre-work: Bring completed Vision/Traction Organiser, proposed budget for next year, and thoughts on goals for next year.

• Agenda for Day 1:

  • Seque
    Each member of the leadership team should share 3 things:
    1) the organisation’s 3 greatest accomplishments in the prev. year;
    2) his or her greatest personal accomplishment;
    3) his or her expectations for the two-day annual planning session;
    

  • Review the previous year
    Review the previous year’s goals, numbers (revenue, profit, gross margin, etc), and last quarter’s Rocks. You should be achieving a minimum of 80 per cent of your goals. When reviewing goals, take a black-or-white “done” or “not done” answers.
    

  • Team health building
    Try an exercise called “One Thing”, where each team member receives feedback from the others on his or her single greatest strength or most admirable ability and his or her biggest weakness or hindrance to the company's success. After everyone has received the feedback from their team members, each then must choose one thing he or she will commit to doing differently in the coming year based on the feedback.
    

  • SWOT/Issues List
    Provide an opportunity for everyone to share what they believe the organisation’s strengths, weaknesses, opportunities, and threats are. The most productive outcome here would be the Issues List. Once you have listed everyone’s opinions of the organisation’s SWOT, extract all the relevant issues for the coming year and create an Issues List with all additional issues added throughout the session.
    

  • Vision / Traction Organiser (through the one-year plan)
    Now it’s time to take a hard look at your core values, challenge the core focus, make sure everyone is still on board for the 10-year target, and confirm that the marketing strategy is still unique and valuable to the customer. Where you’re not on the same page, discuss and debate until everyone is in sync. Assuming you’re all in agreement, you throw out the old Three-Year Picture and create a brand-new one. Once the new Three-Year Picture is clear, go to work on next year’s plan. Set the revenue, profit, and numbers for the coming year and then set your 3 to 7 most important goals.

Agenda for Day 2:

• Establish next quarter’s Rocks

• Tackle key issues

• Next steps

• Conclude

The EOS Weekly Meeting Pulse (Level 10)

Once the quarterly priorities are set, you must meet on a weekly basis to stay focused, solve issues, and communicate.

• Who: The leadership team

• Where: The office conference room

• Duration: 90 minutes

• Frequency: Every week

• Pre-work: Rocks established and Rocks Sheet created; Scorecard complete, Issues Solving Track understood by everyone;

• Agenda:

  • Segue - 5 minutes

  • Scorecard - 5 minutes
    Your chance to examine 5-10 most important numbers in the organisation and to make sure you’re on track. Any numbers that are not on track should be moved to the IDS portion of the meeting.

  • Rock review - 5 minutes
    Review each Rock one at a time - first the company Rocks and then each person’s individual Rocks. Ask each person to report whether his or her Rock is “on track” or “off track”. Do not discuss anything here.

  • Customer/employee headlines - 5 minutes
    Share short and sweet headlines about any customer or employee news or Issues for the week, any issues or bad news should be dropped to the IDS portion of the meeting.

  • To-Do List - 5 minutes

    Prepare your 7-day action items - commitments people should make throughout the week.

  • IDS - 60 minutes
    Decide which issues are no.1, 2, and 3. Start with only the top 3 as you don’t know how many you’ll be able to resolve. Once the issue has been identified, discussed, and solved, the solution usually turns into a plan of attack that ends up on the To-Do List.

  • Conclude - 5 minutes
    1) recap your new To-Do List. Quickly restate all of the action items on the list to confirm that everyone has theirs written down.
    2) discuss whether any message needs to be communicated to the organisation based on decisions you made today, how you’re going to communicate with them, and what medium you’re going to use,
    3) ask everyone to rate the meeting from 1 to 10 (your goal should be an 8 or better).

Here, one person must run the meeting and move the team through the agenda and keep everyone on track. Someone must also manage the agenda by making sure that the agenda, Scorecard, and Rock Sheet are updated and in front of everyone in each meeting.

Meeting Pulse must:

• be on the same day each week;

• be at the same time each week;

• have the same printed agenda;

• start on time, and end on time;

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Getting started 💁‍♀️:

The 7 main tools below are listed in the order of recommended implementations:

1. Accountability Chart (incl. People Analyser and GWC)
   Start by taking a step back and determining the right structure for your organisation. Then you can put the right people in the right seats.
   

2. Rocks
   Once you know who is accountable for what, you can set better Rocks to be achieved every 90 days. This will focus your team on working on the most important priorities quickly.
   

3. Meeting Pulse (incl. IDS, Level 10 Meeting, Quarterlies and Annuals)
   Now you will be ready to implement the Meeting Pulse, specifically the 90-minute weekly Level 10 Meeting. This will force your team to single out what’s important every week and start solving the right problems.
   

4. Scorecard
   Now you should focus on implementing this powerful tool, which takes 1 to 3 months. Once complete, you and your team will have an absolute pulse on your business.
   

5. Vision / Traction Organiser (core values, core focus, 10-year target, marketing strategy, 3-year picture, and 1-year plan)
   The first 4 main tools create a strong foundation of traction, accountability, and a platform from which to execute your vision. You can now have discussions of what the right plan is for the organisation because your people are now being measured and held fully accountable for the objectives of the company.
   

6. 3-Step Process Documenter
   When you have the foundational tools fully implemented and everyone is clear and has bought into them, the next step is documenting and training your core processes using the 3-Step Process Documenter. This is typically a 6-to 12-month process, including documentation and full training of everyone.
   

7. Everyone Has a Number
   This is the last domino to fall. While a highly effective tool, without the first 6 main tools in place, it’s less effective due to a lack of follow-through that stems from a lack of accountability, discipline, and strong management.