Gino Wickman does not bill himself as a risk management specialist. In his 2011 book Traction, however, he provides extensive practical advice to smaller organizations about effective risk management: identifying and simplifying core processes and identifying and addressing risks. This book is on the “must-read” list for anyone who wants to grow their organization or increase its resiliency.
Wickman sets out in Traction to articulate an “Entrepreneurial Operating System,” a set of practices that make businesses grow. These salutary practices work whether an organization is for-profit or nonprofit. This review will focus on four core teachings: processes, simplification, values, and “issues.”
Identify and Document Core Processes
Wickman emphasizes that processes and routines are the core of effective business operations. “Nothing can be fine-tuned until it’s first consistent.” Wickman, Traction (2011), at p. 149. Regardless of their ultimate purpose, most organizations have several common processes: human resources, marketing, sales, operations, accounting, and customer retention. Id. at p. 152. (I would add compliance, risk management, and IT to this list.) Wickman emphasizes that every business benefits from identifying each of these processes. This exercise culminates in “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 more time off.” Id. at p. 150.
It’s not enough to identify processes, however. Wickman emphasizes that the leadership team should attempt to document every one of those processes. This does not mean writing a series of lengthy manuals. Instead, boil descriptions down to their essentials. “If you document 100 percent of [a] core process, it might take 30 pages. If you document the most important 20 percent, you should need around six pages.” Wickman, Traction, at p. 154. Furthermore, processes should be documented visually, through pictures and diagrams. Id. at p. 159.
Simplify Core Processes and Measurements
Wickman does not use the phrase “Lean” in his book, but he no doubt adheres to Lean methology. Thus, Wickman notes that leadership should focus on simplifying core processes so that team members can create consistent results with ever greater effectiveness. Wickman, Traction, at p. 156. Moreover, each team member should have a core metric by which his or her conduct is measured: a single number that measures performance in his or her function. “[T]here are,” Wickman explains, “eight distinct advantages to everyone having a number.
- Numbers cut through the murky subject of communication between manager and direct reports.
- Numbers create accountability.
- Accountable people appreciate numbers.
- Numbers create clarity and commitment.
- Numbers create competition.
- Numbers produce results.
- Numbers create teamwork.
- You solve problems faster.”
Id., at p. 123-125.
Define and Use Values
Wickman also emphasizes that organizations should have a core set of guidelines driving their businesses, including a set of organizational values, an articulated focus, a 10-year target, a marketing strategy, a three-year picture, an annual operating plan, a quarterly set of significant objectives (or “rocks”), and a list of “issues” (described in greater detail below). Wickman’s book provides exercises and visuals to help readers organize these elements into what he calls a Vision/Traction Organizer. Wickman, Traction, at p. 30-76. Wickman, however, takes this common advice further. For example, many organizations adopt a set of values, but the results gather dust because they are not made operational. Wickman suggests putting values to work by using them in annual reviews, rating people according to their manifestation of those values and terminating those who don’t meet those criteria. Id., at p. 86-87.
Focus on “Issues” and “Rocks” – Threats and Opportunities/Tasks
Wickman emphasizes two other concepts that resonate strongly with risk management: identifying and addressing “issues” and “rocks,” or what we here at Risk Alternatives call “threats” and “opportunities.” “Issues” are problems, and Wickman explains that healthy companies identify and deal with their problems. Wickman, Traction, at p. 131. He suggests keeping an “issues list,” or what risk managers call a risk register. He then provides practical advice about how to solve issues, emphasizing the need for gathering facts from a variety of sources, taking action, and addressing problems incrementally. Id., at p. 141-143. Wickman also provides methods for identifying and addressing tasks and opportunities, or “rocks,” suggesting that teams work from a whiteboard list of 90-day tasks and whittle those down through discussion, then assign due dates and accountable teams and individuals. Id., at p. 171-175.
Although the topics Wickman addresses have been treated in scores of other sources, his book provides detailed tools for actually implementing the ideas. It is a valuable addition to any practical operational library.
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