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

I received this anonymous letter today: Attn: Book-of-the-Year 2018 Awards Committee Dear 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 Reader P.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!)

Over past 3 months researched the area of scaling up my small business. I read SCALE (David Finkel of Maui Mastermind), TRACTION (Gino Wickman of EOS), and this SCALING UP (Verne Harnish). From everything I can see these are the 3 big players in the scaling up coaching market for small businesses. I would definitely recommend all 3 books. Each have their own unique words and angles. I would even say that both SCALE and TRACTION are a written a bit better and are easier to grasp for the newbie reading these kinds of books for the first time. However, as I read and re-read the books the winner handsdown in SCALING UP by Verne Harnish. Why? Because he teaches what I call EVIDENCE BASED PRACTICES. He incorporates the latest business ideas of the best intellects in each field into his practice and teaching. He readily gives the background primary literatures for each concept in his book. This allows the serious scaler to delve into those books and understand even more. This made me read John Mullins book, listen to Frances Frei on Uncommon Service via Google Talks, or listen to Lencioni on 5 Dysfunctions of a team and read Prahalad and Hamel on Core Competencies or Greg Crabtree's SIMPLE NUMBERS. By the way none of the other books including SCALE UP by Collin Mills a CFO have good financial management section that are as detailed as this one. I am working on the STRATEGY section with my team now. I have kindle, audible, and hard copy. Of these, the hard copy is the most uselss. Kindle allows me to take notes on my computer and helps plan for my execution of this book principles. Another cool technical aspect is that there are only 4 components (PEOPLE, STRATEGY, EXECUTION, FINANCES ) to focus on. Only downside: it seems it was hastily written and I feel the language could have been better. I will know in a 1-3 years how we are going to do.

Rarely do I give out five star ratings. Five stars means it can't be improved upon. Five stars means it's so important everyone should read it. Five stars means it's on par with the Bible, or whatever religious text you subscribe to. To be clear, I'm sure this book can be improved on. Not sure how, but I don't want to limit Verne. I'm not sure EVERYONE should read this. I'm not sure what good it would do my 80 year old mother who isn't looking to scale anything but her kale garden. And it's not really on par with the Bible, of course. But I can't give it a four star rating because too many people would look at that, people who SHOULD read it, and would think "Meh, I guess it's not super important that I read this book." Let me be clear--if you are an entrepreneur or business executive then this may be the most important book you ever read. Good to Great? That's a great book. So is the 4 Hour Work Week. The Lean Startup, 7 Habits, Innovator's Dilemma, Blue Ocean Strategy, everything by Peter Drucker, Hard Thing About Hard Things, Start With Why, Art of War, Think and Grow Rich, Delivering Happiness, Who Moved My Cheese, Thank You Economy, Power of Habit, Checklist Manifesto, Ultimate Question, Getting More, Execution, Who, How Will You Measure Your Life, Go Giver, Profit First, etc.--these are all great books, I highly recommend them all, but Scaling Up has something these books don't have--instant high value usability from cover to cover. As an entrepreneur since 1999, this book, more than any other, is the book I wish I had read 10 times and internalized thoroughly before I started my business. It would have made a bigger difference than any other single book I could have read. So what am I going to do now? I've already given a copy to each member of my inner circle at my company. I'll be giving a copy to each member of our management team next. I'm giving it to a potential business partner. I've read it once on Audible, and I bought a Kindle version so I can go through it line by line and make notes and action plans based on what's in it. This isn't a book that will just inspire you, this is the book that gives you the specific tools you need to be successful in your business and grow it. I couldn't be more excited about executing on it. This book is especially important for you to read if you're an entrepreneur because it's entrepreneurs who will save the world. Pick any problem you like; war, global warming, racism, poverty, drunk driving, health care, government, banking--and somewhere, sometime, an entrepreneur will come up with the solution. But if he or she doesn't know how to run a business, we may never know how that entrepreneur could have changed the world. This is the book that can make the difference between an entrepreneur giving it a good go, and then giving up, or that entrepreneur making more than just a dent in the universe.

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.

Verne Harnish has produced a remarkable body of work, and "Scaling Up" does an outstanding job of piecing it all together in a cohesive and surprisingly readable format. The logic of the approach is inescapable, and it is presented in a digestable toolkit format, with tremendous resource availability through the online offerings. I have already purchased copies for senior leaders at my firm, and we are developing a discussion community around the material. Although positioned as being optimal for small and growing firms (read: start-ups), there are valuable lessons here for larger, well-established organizations, particularly those that choose to engage in new business ventures or expand into areas of current business that have not been previously tapped (we're in that process, so this is incredibly timely). The simplicity of the approach and the documentation is striking; executives and leaders who believe this work has to be complex and unapproachable (thus giving the "out" for why an organization would not engage) will be surprised by the ease of the material. Make no mistake, the work is hard, but the means of memorializing, framing, and blueprinting the work to be done are all right here, and the tools are straightforward and thoughtfully designed. In all, a tremendous and highly useful (albeit dense, even at only 250 pages) toolkit and design model for many business roadmaps for growth.

This is a book for CEOs, directors and leaders who are in the process of building and developing growth companies. The book is structured in four main sections: Scaling up people Scaling up strategy Scaling up execution Scaling up cash The people section explains how great people is critical for the development of successful companies. Initially, the author quotes management guru Peter Drucker to highlight the importance of having good leaders and senior leadership who define proper metrics, direction and accountability to achieve the desired KPIs: "The bottleneck is always at the top of the bottle". The book provides tips and strategies for attracting and hiring A players who will be a good fit for the company, sharing the same goals and values. Harnish explains how great managers need to become excellent coaches to their teams in order to keep everyone happy, productive, engaged and learning continuously. The section about strategy focuses on identifying the values, purpose and competencies of the organization. This should be used as the foundation for building an industry-dominating strategic plan that applies the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis, but converted to SWT (Strengths, Weaknesses and Trends) so that the plan can take into account major trends that might shake up the business and industry. The chapters about execution begin by emphasizing that establishing clear, smart and laser-focused priorities should be the first step to achieve the significant goals of the company. This is the section where the book describes and explains "the Rockefeller Habits", which is one of the key portions of this book, considering that its title and cover advertises "Mastering the Rockefeller Habits 2.0". One chapter is devoted to the importance of using data as a tool for leaders to make informed predictions and decisions. This includes gathering customer input to take actions for customer retention. In addition, this section explains the importance of creating metrics and KPIs with effective accountability management systems. The last chapter of the section about scaling up execution focuses on the powerful advantages of meeting regularly implementing the daily huddle, the weekly meeting, the monthly management meeting and the quarterly and annual planning meetings. The fourth and last section of the book is about the role that cash plays in growth companies. The section begins with this statement: "Growth suchs cash". The argument of the author is that cash can be compared to the oxygen that is required for fueling growth. The book shares strategies for improving the cash conversion cycle to build and maintain healthy amounts of cash that can be used for investment purposes. This is the financial and accounting section of the book but the bottom line is that instead of being crushed by bank loans for company growth and expansion, it is better and ideal to have sufficient cash accumulated that can in the future be used for growth and investment without having to turn to banks and their high interest rates.

Scaling up is an amazing school book, very good overview of how to have controlled measurable growth. Now the reason i gave it 3 stars is the unleasible images and tables in the kindle version which makes the book really useless if you intend to apply the tools the author is providing. I read some comments about the poor quality of images in the kidle version but they were not convincing ao i decided to really emphasize: don't buy the kindle version unless you just want to read for fun, if just for fun the kindle version is sufficient.

Scaling Up by Verne Harnish is one of the most practical, actionable business books I’ve read. As an innovation consultant working with large companies, I found it filled with tools, worksheets, and real-world examples that make it easy to implement the concepts immediately. There's no excuse for not taking action! The book’s focus on people is what truly sets it apart. While many business books dive into strategy first, Harnish starts with the critical importance of having the right people in place. You can have the perfect strategy, but without the right team, you’ll never reach your full potential. This section alone is invaluable and should be required reading for managers at all levels. I also loved the section on Core Values, which emphasizes how a company’s "personality" shapes everything from decision-making to culture. Harnish’s approach is insightful and practical, making it easy to see how to apply these concepts in your own business. If you’ve read The Lean Startup, you’ll find Scaling Up is the more practical, no-excuses version of scaling your business. It’s not just about learning; it’s about doing. Whether you're an entrepreneur or an intrapreneur, this book will help you succeed.