Traction Book Summary
By Anil Puri
Traction, by Gino Wickman
In all of my years in business, this is one of the best small business books that I have read. It ties in well to the frameworks and approach that I already use but Gino Wickman introduces some simple tools to help you to implement these fundamental ideas in a practical way.
He covers off 6 areas to what he calls the “Entrepreneurial Operating System”
The Vision Component
The VTO (Vision Traction Organiser)
The VTO (Vision Traction Organiser)
- Core Values
- Identify the people in your organization that embody the culture and mindset that you would like to replicate.
- List down the positive characteristics and traits that this group possesses.
- Cull this down to 3-7 CORE values.
- Communicate this to the team with explanations and examples.
- Use these in your recruitment process and have ways to remind your team of them during every month.
- Core Focus
- Stay focused on your core business. Don’t lose focus on shiny distractions.
- Even look at eliminating products and services that aren’t part of your core focus.
- Determine your core focus by asking: 1) why does your organization exist, what is its purpose and passion? 2) what is your organization’s niche?
- 10 Year Target
- Management team needs to agree on a timeframe and a revenue target.
- Must be specific and measurable and it must get everyone excited.
- Marketing Strategy
- You can’t be everything to everyone. Focus on a segment of the market.
- Your marketing strategy is made up of 4 things: 1) your Target market, your list , 2) your three unique‘s, 3) your proven process, 4) your guarantee.
- Understanding your ideal customer’s demographic, geographic and psychographic will help determine your target market and how to attract them.
- Your competitors may have 1 or 2 of your three unique’s but not all 3.
- Your service delivery process should be drawn up on one page and given a name.
- Your guarantee should address the fears and frustrations of your customers related to the service that you are providing.
- 3 Year Picture
- Agree on an annual revenue and profit target.
- Agree on the numbers
- Agree on what the business looks like (10-20 bullet points).
- One Year Plan
- Revenue and profit target.
- Key measureable / KPI
- 3-7 SMART goals.
- Financial budget
- Quarterly Rocks
- Agree on key priorities for the next 90 days.
- List of issues, problems, obstacles to achieve your goals.
- Don’t worry about how you are going to address them.
Share the VTO. Allow your team to question it and discuss it with them.
Quarterly company update and review the VTO quarterly.
People need to hear the Vision up to 7 times before they buy in.
The People Component
The right people in the right seats.
- The right people = those that believe in the vision and values.
- The right seats = being in the role that best fits their skills and abilities.
- Assess all of your team for Values fit using the People Analyser. Give them a + or a – or a +/- (sometimes) for each value. They should have at least 3/5 pluses.
Right person, wrong seat – move them to a more suitable role or let them go if no role is available.
Wrong person, right seat – use the “3 strikes” method to give them a chance to improve.
- Like an organisational chart but with 5 bullet points that describes their key responsibilities.
- 5 key management roles: 1) Sales & Marketing, 2) Operations, 3) Finance & Admin, 4) Integrator (CEO or GM), 5) Visionary.
- Only have one person in each seat. However, one person can occupy more than one seat until the business grows.
- Assess each manager using the GWC principle: 1) they Get it (i.e. they understand the role and the needs of the business), 2) they Want it, 3) they have the Capacity (time and ability).
- Unlike the People Analyser (values assessment), managers must meet all 3 of the GWC criteria.
The Data Component
- “Safety In Numbers”
- Scorecard should capture leading indicators, not just trailing indicators.
- Need a number for everyone. This avoids subjectivity and excuses and creates clarity and accountability.
The Issues Component
Need to create an Issues List. 3 types of lists:
- Issues that aren’t important for the current quarter.
- Departmental issues that should be resolved by the department manager.
- Whole of business or more strategic issues for the leadership team.
3 steps to resolve issues: 1) Identify it properly, 2) Discuss it, 3) Solve it.
The Process Component
The goal is to systemise your core business processes.
Two main steps:
- Document your processes
- Make sure that it is followed by all.
- Identify the core processes and what to call them. HR, marketing, sales, multiple operations, accounting, customer retention.
- Document each core process. This is done by each department head. Document at a high level – the 20% that cover 80% of the output.
- Package it. Call it the “[Business Nane] Way”
Followed by all:
- Show The Way visually
- Share it at a team meeting
- Re-train your team
- Manage your people to follow the process.
This will increase the sale value of your business. Buyers are looking for a turnkey solution.
The Traction Component
- Clear priorities (Rocks). 3-7 for the company, 3-7 for each department head, 1-3 for each team member.
- Meeting pulse. Annual (incl individual feedback and SWOT), Quarterly off-site, Weekly.
The weekly “Level 10” meeting agenda
- Wins 5 min
- Scorecard 5 min
- Rock review 5 min
- Customer and employee highlights 5 min
- Tick off to do list 5 min
- Issues list 60 min – tackle in order of priority
- Conclude 5 min – read to do list, agree how to communicate decisions.
- Accountability Chart, incl People Analyser and GWC
- Meeting Pulse, incl IDS and Level 10 weekly, quarterly and annuals.
- VTO, incl Core Values, Core Focus, 10 Year Target, Mktg Strategy, 3 Year Picture, 1 Year Plan
- Three Step Process Documenter
- Everyone has a number