An Advisor Firm Gains Traction – Part 2

Nov 7, 2017

tractionIn last week’s post I introduced you to Diversified, LLC, their key players, and how they have evolved over the last few years. The second part of the story is how they have used the business framework laid out by Gino Wickman in his book Traction: Get a Grip on Your Business to reinvent the firm’s operations.

Wickman calls his framework the Entrepreneurial Operating Systems (EOS) and he is building a worldwide consulting team and community around it. In this post, I cover the strategy’s four key concepts via examples from Diversified. For a more robust introduction to the concepts, there is a thorough outline of Traction.

Hitting the Ceiling

This is the idea that a firm grows in spurts and then stops for a while – that’s the ceiling. It’s essential for a business to identify its ceilings and devise ways to blast through. And know that you will blow through one ceiling only to hit another in a few months’ time, when something else stalls your growth. As Diversified reviewed what was inhibiting growth, they identified the following after several iterations:

  • Departments were not clearly defined
  • Unclear roles, which led to a lack of accountability
  • Overworked operations
  • No clear marketing direction
  • The right people were not in the right seats.

These were all tangible issues that could be addressed. The last bullet point is one of the most interesting. With EOS, it becomes clear what each person’s strengths are. Sometimes they are not in the right job to use those strengths. One of the hard facts is that 80% of the time, there are leadership changes as a result of applying EOS. This was true at Diversified, and it is something that any firm entering into this process should be aware of.

Accountability Chart

If I had to choose any one element that has the greatest business effect it is the Accountability Chart. It is a simple concept: identify your organization with a classic org chart, place leaders in each section, make them accountable for their department. EOS suggests that all organizations can roll up into three main departments:

  • Sales/marketing
  • Operations
  • Finance

In addition, identify two key leadership roles: integrator and visionary. These two roles ensure that the firm is both humming along internally, and that it is hitting big external goals. It is essential that these two leaders work well together too, as they are the yin and yang of the organization.

Integrator: The Integrator is head of the three departments, and coordinates them to ensure that their goals and initiatives are aligned. In any driven organization this will cause creative friction between the departments and it is the integrator’s role to smooth that, but also gain the creativity. In Diversified’s case, David Levy was selected to be the integrator. His nickname is Detailed Dave, which suggests he was a shoo-in for the role. According to Dave, the keys to success in this role is get the input from the heads of  department, then get out of their way, yet ensure that they are aligned with activities of the other departments.

Visionary: In this role, Andrew Rosen’s job is to  look forward for the next big thing. His is a role of trying ten things, and throwing out nine to focus on the big one that will make a difference. Visionaries are masters of the concept of successfully failing fast. There are few things that Andrew is not curious about; any conversation with him can go into a variety of topics. But when he locks in, he will then drill and drill until he as an approach. As covered in the last blog post, a key hallmark of the firm is decisiveness and Andrew has built that into the culture.

Once these roles and positions are in place, the rest of the organization is built out. In all cases, the roles and responsibilities are made clear with metrics of success built in.


A rock is a big goal that must be accomplished within 90 days. This mixture of identification of a goal and then a tight timeline ensures that the firm keeps moving forward and upward. The leadership team will identify three to seven rocks for the firm. Rocks are also set at the department level and the individual level.  Each is discussed, documented and distributed from a quarterly meeting so everyone starts from the same point. This approach is designed to ensure that the minutiae of everyday life are not the only thing that is accomplished; it is always the rock that takes priority.

This is an example of Diversified’s rocks for one recent quarter:

  • DAVIDDefine timeline & game plan to get discretion & become SEC registered vs. state
  • DAVIDUnderstand how all employees are spending their time and determine if appropriate in an effort to optimize – use Traction’s L1-4 process
  • KELLEYCreate an improved and systematic approach for all employee reviews
  • KELLEYHire and train new admin assistant
  • JAYHave ops team work less (steps to get there and optimize the inefficiencies)

As you can see these are specific and actionable. They can be reviewed at the end of the quarter for completion.


The scorecard is another way that the process holds the firm accountable. It’s actually an old technique, but few advisor firms use it. Identify five to fifteen numbers by which you want to run the company – these are your key metrics. These numbers should be updated weekly, so that you can see trends and be able to make corrections in the short term. Often firms do a semi-annual or annual review, and the time for successful corrective action may have passed. Diversified was kind enough to reveal a subset of their metrics in their current scorecard:

As you can see these are all tangible metrics which can be boosted, if necessary, by adding new rocks to someone’s workload!

All In

Hopefully this gives you an idea of how practical the Traction framework is. The program is not for everyone. It is a major commitment and it will definitely change the culture of your firm. There are parallels to the Agile development methodology. A lot of programmers chafe under strictures of the methodology, until they see the happy clients that they are serving. Andrew considers Traction similarly, ”You have to go all in on Traction, if you want to gain the benefits. It may feel silly at times, and it sometimes feel that everyone is being driven hard. Well, guess what?  You are, and it is very effective!”

SEI is not affiliated with Diversified or Gino Wickman and the information provided by the individuals interviewed represent their own opinion. SEI bears no responsibility for their accuracy.

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Raef Lee

Raef Lee

Raef Lee is the technology contributor for Practically Speaking and also serves as a managing director for the SEI Advisor Network.

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