This article is an excerpt from the Shortform book guide to "Traction" by Gino Wickman. Shortform has the world's best summaries and analyses of books you should be reading.
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The EOS management system is a holistic business management model created by entrepreneurial expert and business consultant Gino Wickman. The EOS management system builds or strengthens six key business components that the author discovered while turning around his family’s company.
To avoid or overcome the challenges holding your business back, Wickman writes that you must follow six key steps. When you properly implement these steps, your business can function smoothly without your constant attention. We’ll explain how to complete each step so your company becomes successful, self-sustaining, and ready for growth.
Originally Published: March 1, 2021
Last Updated: January 27, 2026
Step #1: Vision
The first step in the EOS management system, says Wickman, is to create a clear vision for your company and make sure everyone understands it. A vision clarifies your company’s identity, its future goals, and the strategy to achieve them. Many business owners have a vision in their head, but they often assume others understand it equally well. When people aren’t clear on the company’s direction, they waste their efforts on the wrong tasks, and the company fails to reach its goals. In contrast, a clear vision that everyone understands aligns all efforts toward the same goals.
To create a vision, you must clarify five things:
- Your guiding values
- Your main focus
- Your goals
- Your market approach
- Your obstacles
Your Guiding Values
Wickman writes that values define what your company stands for and its culture. Strong values attract people who share them and encourage those who don’t to leave. To find your core values, Wickman suggests three steps:
- Step 1: Think of your three best employees.
- Step 2: List the qualities they demonstrate.
- Step 3: Choose three to seven values from that list that define your company.
After identifying your values, share them company-wide through a presentation that illustrates each value with stories and examples. Then, build your culture around these values by using them when you make decisions about who to hire, fire, and reward. For example, when you interview job candidates, explain your company’s values and ask job-seekers how they’ve applied similar values in their previous work.
Your Main Focus
In addition to your guiding values, Wickman also suggests clarifying the one thing your company does best—your main focus. To discover this focus, follow two steps:
- Step 1: Determine your company’s purpose and what you’re passionate about.
- Step 2: Determine your speciality—the specific thing your company does to fulfill that purpose or passion.
For example, a software company might exist to help small businesses manage their money (purpose). It fulfills this purpose by creating easy-to-use accounting software (specialty).
Wickman writes that once you know your focus, you can stop doing activities that don’t fit with it. This might mean cutting product lines that don’t match your specialty, removing roles that aren’t needed, or closing entire divisions. Your leadership team must protect your main focus from distractions. When you stick to what your company does best, you get better results and build a stronger business.
Your Goals
To create an effective vision for your business, you must also create goals that guide your decisions, track your progress, and maintain direction. Wickman recommends creating three types of goals:
Your 10-year goal: Identify an ambitious, specific, measurable goal you want to achieve in 10 years—for example, “Grow from regional to national distribution with outlets in 45 states.” Focus on what you want to achieve, not how you’ll get there. This opens your mind to creative solutions you might miss otherwise. Your 10-year goal should excite everyone in your company.
Your three-year goal: Set revenue and profit targets, choose one key measurable (like customer satisfaction scores or production capacity), and describe what the company will look like at that time (including staff size, environment, products, and client base). This medium-term goal helps employees understand where the company is heading in the near future.
Your one-year goal: Set this year’s revenue and profit goals, plus a measurable that aligns with your three-year goal. Then choose three to seven objectives to complete this year that will move you toward your three-year goal. This plan builds momentum toward your vision.
Your Market Approach
Next, Wickman explains that a clear market strategy is another vital part of your business’s vision. A focused marketing strategy guides all of the promotional materials you’ll create and leads to better business results. Without this focus, you’ll waste resources on scattered efforts that have little impact.
According to Wickman, an effective market strategy includes four key elements:
Your target customer: Define exactly who you want to sell to by considering geographic, demographic, and behavioral traits—for example, “small business owners with 5-15 employees in urban areas who need accounting software.” Then, create a list of prospects that match this description. When you target your best prospects—customers who offer more profit with fewer problems—you’ll sell more effectively.
Your differentiators: Choose three strengths that make you different from your competitors. Many businesses try to offer too many things to please everyone, which prevents them from standing out in any particular area.
Your unique process: Describe the main steps of your specific approach to delivering your products or services. Present this visually on a single page with a memorable name that you can show customers to build their trust in your business.
Your promise: Identify your customers’ biggest concerns and make a promise that addresses them. Include a specific penalty or compensation that customers will receive if you fail to deliver on your promise. This builds customer confidence, increases sales, and motivates your team to deliver.
Your Obstacles
Wickman writes that once you know where your company’s headed, you must identify anything that might stop you. With your leadership team, discuss and list obstacles you might face while pursuing your vision. Keep updating this list as you operate your business. We’ll discuss how to address these issues systematically later.
Step #2: People
After you’ve created a clear vision, the next step to creating a successful business is to build an effective team. Wickman argues that having people who don’t fit your company or having people in the wrong roles hurts your business. To organize your team effectively, hire people who share your guiding values and place them in roles that match their skills.
Assess the Cultural Fit of Your Employees
First, Wickman suggests you create a system to measure how well employees align with your company values. This clarifies personnel decisions and reduces subjectivity.
- Make a spreadsheet with core values across the top
- List employee names down the side.
- Rate each person on each value: strong, moderate, or weak.
- Set a minimum acceptable standard with your leadership team.
When someone falls short of this standard, give them an opportunity to improve. Wickman recommends a three-step process: First, clearly explain the issue and your expectations. Give them 30 days to improve. Second, if they don’t improve enough, clarify expectations again and give them another 30 days. Lastly, if they still don’t meet your standards, end their employment. Your other employees will appreciate this accountability.
Create a Clear Organizational Structure
After you ensure employees’ cultural fit, Wickman suggests you define clear functions and roles. Most businesses have three main functions:
- Sales and marketing: attracting customers and closing deals
- Operations: creating and delivering what you sell
- Finance: handling accounting and money management
Wickman recommends appointing one leader for each of these functional areas. This creates clear lines of responsibility and prevents confusion about who handles what parts of the business.
Beyond these three functions, Wickman writes that every company needs two types of leaders:
- A managerial leader runs day-to-day business operations, oversees finances, and tracks goals. They excel at management, problem-solving, and holding people accountable.
- A visionary leader (often the founder) generates creative ideas, solves major problems, and builds important relationships. They stay connected to company culture and morale.
According to Wickman, these two leadership types complement and balance each other. Companies typically struggle without both types of leaders.
Put People in the Right Positions
Once you have a clear structure, Wickman says to make sure people are in positions where they can excel. To determine if someone is right for a role, ask yourself three questions:
- Do they fully understand the role? This includes all the role’s responsibilities, the systems they’ll interact with, and how their job connects to the company’s mission.
- Do they genuinely want the role? They should be motivated and truly enjoy the work.
- Do they have the capability to do it well? They should have the necessary intellectual, physical, and emotional abilities, including experience, knowledge, and interpersonal skills.
When someone doesn’t satisfy all three criteria, you lack confidence in their performance, so you can’t give them full ownership of their responsibilities. This creates frustration on both sides: You feel burdened by the extra oversight that putting them in that position entails, and they feel untrusted and controlled.
Step #3: Data
According to Wickman, the third step to creating a successful business is to monitor weekly metrics. Many business owners rely on gut feelings instead of actual data. Additionally, while most companies look at monthly financial reports, by then it’s often too late to fix emerging problems. Therefore, Wickman recommends creating a weekly tracking system to assess your business health, spot problems and trends, and make corrections before issues escalate.
To develop a weekly tracking system, first choose your key numbers: five to 15 metrics that best show how your business is performing each week. These might include sales revenue, new customer leads, website visitors, inventory turnover rate, and so on. Then, create a tracking spreadsheet with the metrics in the left column, followed by a target column for those metrics, and then columns for 13 weeks of data. Set your targets based on the goals in your annual plan.
Next, Wickman suggests you give every employee one number they’re responsible for achieving. Numbers are concrete and objective. They create clear accountability, increase productivity, and encourage teamwork. For example, assigning an employee to “schedule at least 10 client meetings per week” is specific and measurable, while telling them to “stay busy with clients” is vague and subjective.
Each week, review the spreadsheet with your leadership team to monitor how the business is performing and make any necessary adjustments to stay on track toward your goals.
Step #4: Issues
Beyond tracking numbers, Wickman says that successful businesses also need a consistent way to identify and solve problems. He explains that many leadership teams fall into the trap of discussing the same problems repeatedly without actually solving them. When issues remain unresolved, they drain your company’s energy and resources, getting in the way of your goals.
Maintain Problem Lists
To solve problems systematically, Wickman recommends documenting all issues in lists where they can be addressed. He suggests creating three types of problem lists:
A quarterly issues list: Use this list for problems that aren’t urgent and can wait three months to be addressed in quarterly leadership meetings. This might include creating employee development programs or discussing major equipment purchases.
A weekly issues list: Use this list for important problems that affect your entire company (not just one department) and need to be addressed at the next weekly leadership meeting. This might include company goals that are falling behind schedule, key performance metrics that are too low, or problems with important clients.
A departmental issues list: Use this list for urgent problems within a specific department that must be handled immediately. For example, a marketing team might track issues like fixing a broken website link or meeting a deadline for an advertising campaign.
Resolve Problems Efficiently
Once you’ve sorted your problems into the right lists, you need a clear process to solve them efficiently. Wickman offers five steps:
1. Prioritize: Select the three most important problems from your list and address them in order of importance.
2. Identify the root cause: Dig deeper to find what’s really causing the problem. Many teams waste time by discussing symptoms rather than root causes.
3. Gather input: Let everyone on the team contribute their perspective on the problem. When you’ve correctly identified the root cause, the right solution often becomes obvious to everyone.
4. Act on a solution: Choose the best solution and assign one specific person to carry it out.
5. Track completion: Add the task to your to-do list and check in regularly to make sure it gets done. Once it’s finished, you can cross the problem off your list.
Step #5: Process
According to Wickman, your company has a few key processes that keep it running—together they constitute your unique approach to doing business. He recommends that you document these processes by writing down step-by-step instructions for each one. When you do this, employees can follow the documented steps instead of constantly asking you questions. This frees you to focus on building your business rather than managing daily details.
Additionally, when everyone follows the same processes, managers more easily identify and solve problems. Many problems stem from process breakdowns—you can trace the problem to the specific failed step and correct it. Standardized processes also position you for growth. When you have proven, documented methods, you can train new employees quickly and maintain quality as you expand. This makes it easier to scale your business by serving more customers and generating more revenue without sacrificing consistency.
Wickman suggests you start by identifying every major process in your business and listing their names on one page. Most businesses have processes for hiring and managing people, marketing their services, making sales, delivering their product or service, managing finances, and serving customers.
Next, have each person who runs each process document the steps involved. Wickman recommends keeping it simple: Focus on the critical 20% of the process that produces 80% of the results. For each process, list the main steps with brief instructions—aiming for fewer than 10 pages per process. This documentation helps you spot steps you can remove or improve.
Lastly, says Wickman, put all your documented processes into one employee manual and train every employee on the processes they need to use. Make it clear that these processes aren’t optional—everyone, including you and other leaders, must follow them consistently.
Step #6: Traction
According to Wickman, the final step to creating a successful business is to turn your vision into real actions and results. To execute your vision, set 90-day priorities for everyone and establish a meeting structure. These tools keep everyone focused on the same goals and create accountability for results.
Clarify 90-Day Priorities for Everyone
Wickman suggests you meet with your senior leaders to review your vision and set quarterly priorities. Start by listing everything that must be accomplished in the next 90 days to move toward your vision.
Then, narrow this list to three to seven company priorities. For each priority, set a deadline and make sure it’s specific, measurable, and achievable. Assign one leadership team member to own each priority. This person creates a timeline, assigns tasks to team members, and makes sure the work gets done.
After setting company priorities, have everyone set their own goals: Each leadership team member sets three to seven priorities for the quarter (including any company priority they own). Compile all company and leadership priorities onto one page and review this list weekly at leadership meetings. Then, each department and each employee follows the same process to set one to three priorities of their own.
Hold Regular Leadership Meetings
Next, to execute your vision, Wickman suggests you hold regular meetings to keep everyone accountable and make progress toward your goals. He suggests two types of meetings:
Quarterly meetings: At the start of each quarter, review the previous quarter’s results, such as the financials and the priorities you’ve achieved. Then, set new priorities for the next 90 days.
Weekly meetings: Once you’ve set your quarterly priorities, meet with your leadership team weekly to stay focused and address issues. Review your tracked numbers, priorities, and last week’s tasks. Also, use this time to solve the problems on your lists.
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- How a first-time entrepreneur can gain the traction needed to grow
- Why hard work and determination aren't enough for your business to succeed
- The 6 key principles of the Entrepreneurial Operating System
