The Operating Manual for Business
There are a litany of books on businesses and how to run them. Reducing all that information to a sort of “how-to” or operating manual is not so common though. One such book is “Traction” by Gino Wickman. If you are a small business owner seeking to efficiently focus on the right things in running your business – while making sure you have everything covered – this book is worth a read.
In Chapter One Wickman describes what he calls The Entrepreneurial Operating System (EOS). He describes it as having six key elements which include:
- Vision – successful owners have a compelling one and know how to communicate it to others.
- People – success demands the right people in the right positions
- Data – good leaders rely on a handful of metrics to successfully manage their business
- Issues – obstacles to the execution of your vision
- Process – your processes are your way of doing business – requires constant refinement
- Traction – good execution with focus, accountability, and discipline in the organization
Wickman covers each of these elements in detail in his book.
In Chapter 5 he lasers in on data. His theme is that most business owners are “flying blind” without enough data to know “where they are, where they are going or even if they are headed in the right direction”. If you master your data you will be able to “take the pulse of your business consistently and accurately so that you can take effective action.” He contrasts managing data to the alternative of “… managing assumptions, opinions, emotions and egos.” Numbers aren’t perfect but they have the great value of demonstrating patterns and trends that an owner can use to predict outcomes. That is valuable! By developing a Scorecard of key operating metrics for your business “you can tell at a glance how your business is doing.” The Scorecard he goes on to describe is a set of “weekly activity-based numbers that are predictive of business results to come. According to Wickman the Scorecard “…should cause an organizational shift. Your leadership team will become more proactive at solving problems because you’ll have hard data that not only points out current problems but also predicts future ones.”
By creating a Scorecard and giving each manager Measurables you create accountability and a clear message about what needs to be accomplished each week to guide your business to success.
By implementing EOS the business owner gains focus on those things that are key to success and avoid spending time on those things that don’t contribute to it. Similar to having a GPS in your car guiding you to your new destination, the EOS will guide you to business success.
One cautionary note about numbers. Yes, they tell a story and they are highly useful. However, I’ve seen leaders default to the belief that they tell the whole story all the time. Not always! Sometimes your reliance on numbers as the sole guide to business information can cause you to miss something critical in your business. A good leader will look critically at all times at the numbers and continually ask if they are telling the whole story. Sometimes you have to reach out to your people to confirm that they do. If the numbers are not telling the whole story – your people will tell you what those numbers are missing if they trust you. You can never stop being a leader if you want to succeed!
Implementing EOS may be useful in your business if you are looking for a path to greater success.
Doug Kennedy has extensive knowledge and hands-on experience in building robust foundations for family offices and serving the role of a trusted advisor. He performs business advisory services and financial consulting work for a variety of family-owned businesses from start-ups to mature successful enterprises. His experience has been spent in a family dominated publicly owned companies, high net worth individuals, estate planning, wealth management, succession planning, leadership transition, and risk management.
If you would like to speak with Doug, please use the comments section to make a request.