Scaling Up: How a Few Companies Make It...and Why the Rest Don't (Rockefeller Habits 2.0 Revised Edition) Hardcover – October 21, 2014

I received this anonymous letter today:Attn: Book-of-the-Year 2018 Awards CommitteeDear John,As you and your team gather in your plush executive offices (or perhaps at your gourmet dinner meeting) to discern your pick for the 2018 Book-of-the-Year Honors, please give this gem your serious consideration. I have 12 reasons why your readers would thank you profusely—should you name “Scaling Up” as your top book of 2018.If you pick this book, you’ll have to write the summary (all that unnecessary filler stuff you write that goes on and on and on). I think readers of your book reviews, however, would prefer just getting to the good stuff, like these 12 reasons:Reason #1. $20 AWARDS. Read about the Colorado company that required every manager—every month—to submit three ideas “for increasing revenue, reducing costs, or making something easier.” Managers who submitted the top 20 ideas—as determined by the CEO who responded to every idea submitted—received $20 cash per idea at the monthly managers meeting. (See page 166.)Reason #2. BEST QUOTE. “Senior leaders know they have succeeded in building an organization that can scale—and is fun to run—when they are the dumbest people in the room! In turn, if they have all the answers (or act like they do), it guarantees organizational silence, exacerbates blindness (the CEO is always the last to know anyway), and means the senior team ends up carrying the entire load of the company on their backs.” (See page 5.)Reason #3. THE WEEKLY MEETING. John, I know you’re a big fan of weekly meetings, but you never convinced me of the value of wasting everyone’s time weekly. But Verne Harnish, the brilliant author of “Scaling Up,” has totally convinced me! The “Rockefeller Habit #3: Meeting Rhythm” chapter gives amazing detail on four types of meetings: the daily huddle, the weekly meeting, the monthly management meeting, and the quarterly and annual planning meetings. I’ve become a born-again-meeting-rhythm-freak! (See pages 175-190—the most helpful 15 pages I’ve read all year.)Reason #4. “EVERYTHING IS FINE!” As an example of the helpful detail on meetings, Harnish drops in frequent warning icons. “What’s the rock in your shoe?” is a high priority meeting agenda question for the daily huddle (Where are you stuck? What constraints are you facing in the next 24 hours?). And this wisdom/warning:“WARNING: Anytime somebody goes two days without reporting a constraint, you can bet there’s a problem lurking. Busy, productive people who are doing anything of consequence get stuck pretty regularly. The only people who don’t get stuck are those who aren’t doing anything or are so stuck that they don’t know it!! So, challenge the team member who reports, ‘Everything is fine!’” (See page 183.)Reason #5. ROCKEFELLER HABITS. John, I’ve noticed that “Oh, my!” is one of your frequent and favorite filler phrases in your book reviews (could you dial that back a bit?). But, “Oh, my!”—am I the only leader or manager that has never heard of the Rockefeller Habits? I was blown away to learn about the leadership habits of John D. Rockefeller (1839-1937) and to see how Verne Harnish’s consulting company, Gazelles, has systemized these 10 habits into a one-page, 40-item checklist. Brilliant! And read this warning from the author:“WARNING: You’ll drive everyone in the organization crazy if you implement all of these habits at one time. The key is focusing on one or two each quarter, giving everyone roughly 24 to 36 months to install these simple, yet powerful routines. Then it’s a process of continually refreshing them as the company scales up.” (See page 15 and read why habits are “routines that set you free!”)Reason #6. THE QUESTION WE DO NOT KNOW. The graphics, icons, and format of this visually-appealing book are amazing (“Oh, my!” amazing, to be honest.) Like this call-out: “We have the answers, all the answers; it’s the question we do not know.” To help organizations achieve results, the author delivers detailed (detailed!) processes in four major areas: People, Strategy, Execution, and Cash. And—get this—he says it’s OK to start reading anywhere you want in the book. John, you owe me a Starbucks card if you can resist reading about weekly meetings first!Reason #7. GUT-CHECK ZINGERS. Oh, my! These one-liners are convicting:• “NOTE: The cost of a bad hire is 15x his or her annual salary, according to Topgrading, so it’s important to get the recruiting and selection process right.”• “Good managers play checkers while great managers play chess, according to researchers Marcus Buckingham and Curt Coffman.”• “The bottleneck is always at the top of the bottle,” noted Peter Drucker.• “It’s time to break apart a 50-year-old business term—strategic planning—and think about it in terms of two distinct activities: strategic thinking and execution planning. Each requires two very different teams and processes.”Reason #8. BIG, BUT NOT BIG ENOUGH. Read why you must conquer complexity. “Expanding from three to four people grows the team only 33%, yet complexity may increase 400%,” writes Harnish. He says optimal employee counts include: one to three; eight to 12; 40 to 70; 350 to 500; and 2,500 to 3,500. “Any company with an employee count between these natural clusters is likely feeling a bit stuck—“…‘big, but not big enough’ syndrome—even in making minor decisions like what size photocopy machines you need next.”Reason #9. GARBAGE UNIVERSITY. John, you’ll love the insightful business stories—in-the-trenches examples—of how organizations are building the “Scaling Up” system into their DNA with training and education (normally about 2% to 3% of payroll).• The City Bin Company in Ireland created an internal learning academy, “Garbage University,” and provides “three hours of training every two weeks from September to May.” (Their CEO, by the way, never learned how to drive a garbage truck—and thinks the company is better for it!)• “At MOM’s Organic Market, in addition to executive education, produce managers will typically read four to five books together every year.”• Great companies start growing their people on day one. When they don’t, “…the first days on the job often feel more like waterboarding than onboarding: no desk, no computer, no phone…” (John, that reminds me of your 2017 book-of-the-year, “The Power of Moments.”)Reason #10. RENAME “HR.” Verne Harnish mentions a company that “renamed its HR Department the Employee Experience Department.” Core values are not taken lightly in “Scaling Up.” He suggests you “organize your employee handbook into sections around each Core Value.” And—so insightful—“Every time you praise or reprimand someone, tie it back to a Core Value or Purpose.” Read his eight ways to reinforce culture on pages 102-106.You’ll also appreciate his flexibility on terms: should we use “mission” or “purpose?” He says pick the term you prefer, but “use the terms consistently.” He likes “purpose” (more heartfelt). And to illustrate…here’s another “Oh, my!” You owe me another Starbucks card (or maybe Chick-fil-A), if you can read—without getting teary-eyed—about the company that asked how they could become more like Make-A-Wish Foundation for their employees—per their core value, “Take care of each other.” (See page 100.)Reason #11. ONE-PAGE STRATEGIC PLAN. John, I realize I’m stepping on your strategic planning toes—but honestly—the “One-Page Strategic Plan (OPSP)” in “Scaling Up” is so, so good. And the detailed instructions for the downloadable 11” by 17” template give step-by-step directions. In preparation, Harnish suggests that managers work on the SWOT analysis, but senior teams should focus energies on SWT (Strengths, Weaknesses, and Trends). Example: “Forget about the competitor down the street. Is there a company on the other side of the globe that might put you out of business?” (See pages 123-140.)Reason #12. SLOPPY EXECUTION. So (and with this I’ll end—and now I see why your reviews are so long: these books are powerful!)…what’s the downside of not reading this book? Harnish says if you don’t execute the Rockefeller Habits, “It just means you’ve been leaving massive amounts of money and time on the table. And if you have a killer strategy and/or heroic people willing to work 18-hour days, eight days a week, these will make up for the messes created by sloppy execution and lack of discipline.” (As you often say, John—“Yikes!”)Sincerely yours,An Anonymous ReaderP.S. John—Please give "Scaling Up" very serious consideration when you announce your Top-10 books of 2018 (and your book-of-the-year) on Dec. 31. (And please note I am not the author nor have I met the author!)

Detailed information about what goes into scaling up your business along with helpful worksheets and links to other sources.

There is so much good information in here that you really need to pick the section that is most critical for you and focus on it. I've already learned many new things, and I am a retired executive from a Fortune 100 company. Proof that you can learn new things no matter what your experience! My small business is growing so rapidly that I wish I had more time to read this - because it will greatly reduce growing pains and enable key turning points in the structure of my business.For us, cash flow management and the cash conversion cycle (CCC) are most critical - I walked away from a major event because the investments I made 5 months ago will not yield cash for at least 3 months more. Now it seems so obvious! Instead, I am listing on multiple platforms and will sell it all - with 8x the profit - before the other event would have even result in me getting paid.This book may be a little dry for someone without experience in the types of problems explored, but I can tell you from experience that investing the effort at the very young stages of your business (<$50,000 in sales) will make the process of reaching $250,000 in sales less overwhelming. Don't be like me and try to drink from the fire hose of growth at the same time you are trying to learn how to make it more efficient, more effective, and much less painful :)To your success!Nathan

The presumption of this book is that your company is growing and that you are profitable. It also presumes that you want to "scale up" from a small business to a much larger and more profitable business. As the sub-title suggests, few companies make this transition and the rest do not, and this book will give you guidance on how to be in the first group. The method Verne offers is to make the correct decision for each of the four dimensions of a business. Follow his prescription, he asserts, and you will be successful, and fail to follow the prescription and you will fail. To this end, he offers a thorough description of a set of practical tools and techniques that cover each of the four dimensions of a business. The four dimensions of any business, he asserts, are the People, Strategy, Execution, and Cash. The way you deal with these dimensions is to attract and retain the right people, create a truly differentiated strategy, drive flawless execution, and have plenty of cash to weather the storms. That is unarguable. It is comparable to saying a successful marriage is made of a physically healthy, loving couple, who are emotionally and ethically committed to each other. They resolve all disagreements using an orderly format in advance of disagreements becoming divisive. To bolster this are examples of couples who have chosen to do use the format and are happy, successful and have two gorgeous kids. Added to this is the claim that "when our tools are successfully implemented, organizations attain these four outcomes: At least double the rate of cash flow. Triple the industry average profitability. Increase the valuation of the firm relative to competitors. Help the stakeholders — employees, customers, and shareholders — enjoy the climb (to outrageous success.)" However, despite these claims being, well, too good to be true, the book does offer an organized collection of some very sound advice that would benefit all size companies. Staying in business is hard enough, and turning a successful small business into a successful medium size business on its way to a successful large business, is no easier. All good advice should be gratefully accepted. Growing an already successful small business is often hampered by the company's failure to identify and develop the required number of leaders for the growth. The now stretched leadership, (both of you,) are expecting to be able to lead a staff twice the size of the one you started with. Leaders, Harnish explains, help people play to their strengths, don't demotivate, but rather, "dehassle." They set clear expectations and give employees a way to see the purpose of their work and the effect their actions are having. Good leaders recognize and appreciate people's contribution. They also "hire fewer people, but pay them more - frontline employees, not the top leaders!" The people supporting the leader, Harnish calls "supports" not subordinates. (Like it!) It is both more respectful and more accurate. When it comes to choosing the leaders you will need to be sure that they fit your culture so that will pass it on. There are two additional abilities leadership recruits need to display: "They don't need to be managed. They regularly wow the team with their insights and output." As Peter Drucker famously said: "The bottleneck is always at the top of the bottle!" Having the right people to grow your business is necessary but not sufficient. If your infrastructure is not scalable, the wheels will come off as your expand. You need to be able to accommodate the both the people and the demands on the system so that expansion does not make you less secure than you were when you were smaller. To drive execution Harnish recommends three key habits: Set only a few priorities. Gather information daily and review it weekly. Schedule "daily, weekly, monthly, quarterly, and annual meetings," and do not miss any because the rhythm of these meetings needs to be maintained. Finally, cash. Harnish's exhortation is "Don't run out of it!" This will only be achieved through scrutinizing every decision and checking its effect on cash flow, not only income and profit. As all know, growing gobbles cash and not having cash limits your ability to grow. Little of what this book deals with will surprise you. Yes, he does have some memorable turns of phrase, but the rest is business common sense. If so, why should you bother reading this book? For two reasons. The first is that business common sense is not that common. In the daily whirlwind of activity, we forget to do what we know we should. The second is a warning Harnish issues: "Companies can get by with sloppy execution if they have a killer strategy or highly dedicated people willing to work -hour days, eight days per week to cover up all the slop. Just recognize you're wasting a lot of profitability and time, (and you will) burn both cash and people in the process!"The presumption of this book is that your company is growing and that you are profitable. It also presumes that you want to "scale up" from a small business to a much larger and more profitable business. As the sub-title suggests, few companies make this transition and the rest do not, and this book will give you guidance on how to be in the first group. The method Verne offers is to make the correct decision for each of the four dimensions of a business. Follow his prescription, he asserts, and you will be successful, and fail to follow the prescription and you will fail. To this end, he offers a thorough description of a set of practical tools and techniques that cover each of the four dimensions of a business. The four dimensions of any business, he asserts, are the People, Strategy, Execution, and Cash. The way you deal with these dimensions is to attract and retain the right people, create a truly differentiated strategy, drive flawless execution, and have plenty of cash to weather the storms. That is unarguable. It is comparable to saying a successful marriage is made of a physically healthy, loving couple, who are emotionally and ethically committed to each other. They resolve all disagreements using an orderly format in advance of disagreements becoming divisive. To bolster this are examples of couples who have chosen to do use the format and are happy, successful and have two gorgeous kids. Added to this is the claim that "when our tools are successfully implemented, organizations attain these four outcomes: At least double the rate of cash flow. Triple the industry average profitability. Increase the valuation of the firm relative to competitors. Help the stakeholders — employees, customers, and shareholders — enjoy the climb (to outrageous success.)" However, despite these claims being, well, too good to be true, the book does offer an organized collection of some very sound advice that would benefit all size companies. Staying in business is hard enough, and turning a successful small business into a successful medium size business on its way to a successful large business, is no easier. All good advice should be gratefully accepted. Growing an already successful small business is often hampered by the company's failure to identify and develop the required number of leaders for the growth. The now stretched leadership, (both of you,) are expecting to be able to lead a staff twice the size of the one you started with. Leaders, Harnish explains, help people play to their strengths, don't demotivate, but rather, "dehassle." They set clear expectations and give employees a way to see the purpose of their work and the effect their actions are having. Good leaders recognize and appreciate people's contribution. They also "hire fewer people, but pay them more - frontline employees, not the top leaders!" The people supporting the leader, Harnish calls "supports" not subordinates. (Like it!) It is both more respectful and more accurate. When it comes to choosing the leaders you will need to be sure that they fit your culture so that will pass it on. There are two additional abilities leadership recruits need to display: "They don't need to be managed. They regularly wow the team with their insights and output." As Peter Drucker famously said: "The bottleneck is always at the top of the bottle!" Having the right people to grow your business is necessary but not sufficient. If your infrastructure is not scalable, the wheels will come off as your expand. You need to be able to accommodate the both the people and the demands on the system so that expansion does not make you less secure than you were when you were smaller. To drive execution Harnish recommends three key habits: Set only a few priorities. Gather information daily and review it weekly. Schedule "daily, weekly, monthly, quarterly, and annual meetings," and do not miss any because the rhythm of these meetings needs to be maintained. Finally, cash. Harnish's exhortation is "Don't run out of it!" This will only be achieved through scrutinizing every decision and checking its effect on cash flow, not only income and profit. As all know, growing gobbles cash and not having cash limits your ability to grow. Little of what this book deals with will surprise you. Yes, he does have some memorable turns of phrase, but the rest is business common sense. If so, why should you bother reading this book? For two reasons. The first is that business common sense is not that common. In the daily whirlwind of activity, we forget to do what we know we should. The second is a warning Harnish issues: "Companies can get by with sloppy execution if they have a killer strategy or highly dedicated people willing to work -hour days, eight days per week to cover up all the slop. Just recognize you're wasting a lot of profitability and time, (and you will) burn both cash and people in the process!" Readability Light —+— Serious Insights High —+— Low Practical High +— Low *Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works.

Helpful to me as a manager. He references a lot of other materials throughout the book that I am now compelled to look in to further to improve my arsenal of tools

A lots of information in such a short book. Looks like the entire information you need as an entrepreneur for growing your organization.

Um livro que muda a barra da sua empresa no estágio em que voce já é grande de mais para não ter regras e estratégias claras, mas pequeno demais para ser uma instituição clássica e extremamente burocrática.

Really practical to learn how to run a company

Utilizzando un approccio pragmatico e ricco di esempi, Verne indica tecniche pratiche da mettere in campo per trasformare un’azienda in quello che lui chiama Gazzelle. Consigliatissimo!