The Entrepreneurial Operating System (EOS) is a set of comprehensive processes and tools to help leadership teams overcome key business challenges, gain control of the business, operate efficiently, gain traction and move ahead as a healthy, effective and cohesive team. In “Traction: Get a Grip on Your Business”, Gino Wickman walks you through the 6 key components of the EOS. In our Traction summary, we’ll briefly outline these 6 components and their foundations.
Overview of the Entrepreneurial Operating System (EOS)
The 5 Key Business Challenges
The EOS is ideal for small to mid sized companies with $2-$50 million revenues and 10-250 employees. It addresses 5 biggest frustrations that any entrepreneurial leadership team will face:
• Lack of control: Your business is running your life rather than the other way round.
• Lack of alignment between your people—be it customers, vendors, partners, or employees—and your vision and goals.
• Not enough profits.
• Hitting a growth ceiling and don’t know how to move forward.
• Lack of sound strategies/tactics, i.e. nothing seems to work.
4 Mindset Shifts and 6 Business Fundamentals
The EOS integrates proven principles, frameworks and ideas from various sources—including The Emyth Revisited, Scaling Up, The 4 Disciplines of Execution and Good to Great—into a complete system. It addresses 6 core fundamentals needed to build a scalable, successful business: Vision, People, Data, Issues, Process and Traction.
However, for the EOS to work, you (the founder/owner) must be willing to embrace 4 mindset shifts:
• You can’t be the one deciding and doing everything. Build a real leadership team—hire people who’re better than you, give them control and responsibility of specific areas, and present a united front to the rest of the organization.
• Accept that organizations grow in spurts and you’ll inevitably hit ceilings at individual, departmental and organizational levels. To punch through and surge ahead, your team must be able to simplify, delegate (so you keep elevating yourselves and your business), predict issues (for both short and long term), systemize and develop the right structure for your next phase of growth.
• Run your business on 1 operating system so everyone’s on the same page.
• Be open-minded: be honest and open about your vulnerabilities and be willing to adopt new ideas.
Ready? We’ll now give an overview of the 6 key components, with more specifics for the 1st component. Do get a copy of our full 14-page summary for more details or get the full mojo from the Traction book. The tools and worksheets mentioned can be downloaded from eosworldwide.com.
1. Vision: Develop & communicate a strong vision
Develop a compelling vision for your organization and help people to see it. When everyone’s aligned in the same direction, it creates a laser-sharp focus that propels you forward.
CRYSTALLIZE YOUR VISION
Use the Vision/Traction Organizer (V/TO) to crystalize your vision on paper. Use these 8 questions to define where you’re headed and how you’ll get there, and distill them into simple points that can be clearly communicated.
(i) What are our core values?
These are 3-7 key, timeless guiding principles for your company. Such values already exist within your organization—your goal is to discover and present them clearly so they can guide all your decisions.
• Get every staff to list down 3 people (ideally in the organization) who personify the type of people your company needs to become the market leader.
• Post the names on a board, review them and list down the characteristics they epitomize. Debate the list and narrow down to the 3-7 core values.
• Let these values “sit” for 30 days before refining/finalizing them. Develop stories, analogies and illustrations to bring them to life, e.g. what does “commitment to excellence” or “never say die” mean in behavioral terms?
• Communicate the core values, incorporate them into your processes for hiring, firing and rewards, and keep them alive via everything you say and do.
(ii) What’s our core focus?
This is the unique blend of leadership, talents and passions that makes your company great in what you do. Jim Collins calls it your “hedgehog concept” or what you’re “genetically encoded” to do. Once you know your core focus (e.g. managing and owning real estate), stay laser-focused only on the people, products and practices that fit that core. In the book and our complete summary, we look at the 2 sub-questions to address to define your core.
What’s our 10-year goal?
Set a clear direction by articulating where your organization will be in 10 years. The leadership team must discuss and define a crystal-clear picture that can excite and unite everyone in the organization.
What’s our marketing strategy?
Define who your ideal customers are and how you’ll serve them well. In the book / our full summary, we further explain the 4 components you must examine, including (a) your 3 uniques, (b) your guarantee, (c) your proven process and (d) your target market.
What’s our 3-year picture?
Define clearly what your business will look like 3 years from now—this facilitates your 1-year planning and is near-term enough to be highly motivating. Get each member of your leadership team to write down their 3-year mental picture and read it out (while the others imagine it with their eyes closed). Debate and agree on the picture you’re committed to create, including revenue, profit and other measurables (e.g. # clients or volume of output).
What’s our 1-year plan?
Agree on the 3-7 top priorities to be achieved this year to achieve your 3-year picture. Ensure they’re specific, measureable and achievable. Less is more—it’s better to focus on just a few key goals. Set a budget to ensure you have the resources to achieve the plan.
What are our quarterly Rocks?
From your 1-year plan, work backward on your Rocks—your top priorities for the next quarter.
What are the issues?
These are the key barriers that could keep you from your goals. Over 15 mins, get your team to list down all the opportunities, threats and obstacles you’ll face.
Incorporate all the points from the 8 questions above into the V/TO.
COMMUNICATE YOUR VISION
With your vision on paper, you can now communicate it to everyone in the organization.
• Use 3 events: (i) a company-wide kick-off meeting with Q&A, (ii) quarterly company-wide update sessions and (iii) quarterly departmental/team reviews.
• Tips: Be prepared to repeat the vision many times before it truly sinks in. Welcome employees to share their views and concerns since it builds commitment to the goal. Your role is to share the vision and V/TO in a clear and compelling way; those who don’t buy in will eventually leave.
2. People: Have the right people in the right seats
This component involves 2 parts: (i) identifying the right people for your organization and (ii) placing them in the ideal seats.
IDENTIFY THE RIGHT PEOPLE
The right people are those who share your company’s core values and will thrive in your culture. In the book / our complete 14-page summary, we explain how to use the People Analyzer to assess the fit for each staff.
PUT PEOPLE IN THE RIGHT SEAT
Once you have the right people, you must place them in the right seats, i.e. the roles and responsibilities must match their Unique Ability® (strengths and passions). In the book / full book summary, we elaborate on how to (i) use the Accountability Chart to define the right structure for your organization, then (ii) use the GWC to place people in the right places, and (iii) implement your new Accountability Chart or organizational chart.
3. Data: Get the pulse on your business
Without hard data, you’ll be running your business on subjective opinion and impulses. Use a Scorecard to get weekly updates on your business, so you can have the pulse of your business, see real-time patterns and make sound decisions.
(i) Develop your Scorecard to capture the 5-15 key numbers for your business; and
(ii) Develop measureables for every role to drive ongoing improvement at all levels.
4. Issues: Build a solutions-oriented environment
Issues are the obstacles to your goals and vision. Most entrepreneurs are so overwhelmed with firefighting that they don’t make time to uncover the root problems. It’s also human nature to procrastinate on tough decisions. Create an open, solutions-oriented environment where issues are flagged out, assessed and managed at all levels.
(i) Develop and manage your issues list, using 3 types of lists to surface problems; and
(ii) Resolve issues with “IDS”—the 3-step Identify-Discuss-Solve process.
5. Process: Systemize your Way of doing business
An organization typically has 6-10 core processes that are linked together via a unique system—this is what Michael Gerber calls your “franchise prototype”. Define and document your unique Way of doing things, so it can be consistently applied and refined, giving you the option to duplicate, scale, maintain or sell your business.
(i) Document your core processes; and
(ii) Adopt the system organization-wide
6. Traction: Bring the Vision to Life
To bring your vision to life, you need to execute your plans and sustain the momentum. Instill discipline and accountability with 2 key components: Rocks and Meeting Pulse.
FOCUS ON QUARTERLY ROCKS
Humans have a short attention span and tend to lose focus beyond 90 days. To retain focus and momentum, break down your scary long-term goals into bite-sized pieces and short 90-day bursts. In the book / Traction book summary, we explain how to identify your 3-7 quarterly Rocks and roll them out.
SET A MEETING PULSE
Well-run meetings are essential for accountability, results and efficiency. The Meeting Pulse is made up of quarterly and weekly meetings where the leadership team meets (without fail) to drive progress and solve issues. In the book / full summary, we take a closer look at each of the meeting types (quarterly, annual, weekly) to explain the objectives and agenda.
Other Details in Traction by Gino Wickman
This is a must-read book for anyone who wants to grow your business. In the book, Wickman also provides detailed examples, tips and illustrations on how to apply the various tools. Download the EOS tools and templates from eosworldwide.com and take the Organizational Checkup ≥2x a year to gauge where you stand on the 6 components. Aim to reach ≥80% and eventually 100%. Give your organization some time to implement the EOS and translate actions into results.
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