Scaling Up: How a Few Companies Make It...and Why the Rest Don't
by Verne Harnish
30 popular highlights from this book
Key Insights & Memorable Quotes
Below are the most popular and impactful highlights and quotes from Scaling Up: How a Few Companies Make It...and Why the Rest Don't:
There are no straight lines in nature or business.
Letting go and trusting others to do things well is one of the more challenging aspects of being a leader of a growing organization.
If the Core Values are the soul of the organization, the core Purpose (some call it “mission”) gives it heart.
People join companies. They leave managers.
I’m tired of sailing my little boatFar inside of the harbor bar;I want to be out where the big ships float —Out on the deep where the Great Ones are! …And should my frail craft prove too slightFor storms that sweep those wide seas o’er,Better go down in the stirring fightThan drowse to death by the sheltered shore! — Daisy Rinehart
To paraphrase Steve Jobs, “I’m always amazed how overnight successes take a helluva long time.
Call it Talent Development, Human Relations, People Support, or Head of People Experiences — whatever term fits your culture — choose to call this function anything but Human Resources.
Goals without routines are wishes; routines without goals are aimless. The most successful business leaders have a clear vision and the disciplines (routines) to make it a reality.
Your contribution to the community of “gazelles” is greatly appreciated.
In retaining employees and keeping them engaged, we’ll cover the five activities of great (vs. good) managers: • Help people play to their strengths. • Don’t demotivate; dehassle. • Set clear expectations and give employees a clear line of sight. • Give recognition and show appreciation. • Hire fewer people, but pay them more (frontline employees, not top leaders!).
The right Brand Promise isn’t always obvious. Naomi Simson — founder of one of the fastest-growing companies in Australia, RedBalloon — was sure she knew what to promise customers who want to give experiences such as hot air balloon rides as gifts, rather than flowers and chocolates. Her promises included an easy-to-use website for choosing one of over 2,000 experiences; recognizable packaging and branding (think Tiffany blue, only in red); and onsite support. It wasn’t until a friend and client mentioned that she was using the website as a source of ideas — but buying the experiences directly from the vendors — that Simson had an “Aha!” moment. She realized that other customers might be doing the same thing, assuming that RedBalloon must be marking up the price of the experiences to cover the costs of the website, packaging, and onsite support. To grow the business, she promised customers they would pay no more for the experiences they bought through RedBalloon than for those purchased directly from the suppliers; otherwise, customers would get 100% of their fee refunded. The company calls this promise, which is technically a pricing guarantee, a “100% Pleasure Guarantee,” to fit its brand.
This is a little story about four people named Everybody, Somebody, Anybody, and Nobody. There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that because it was Everybody’s job. Everybody thought that Anybody could do it, but Nobody realized that Everybody wouldn’t do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done.
In the end, what matters most in life are the depth of your relationships with friends and family; and the sheer number of people you’ve helped along the way. These represent true measures of wealth. Financial wealth, then, is seen as a resource for fostering your relationships.
The #1 demotivator for talented people is having to put up with bozos, as Steve Jobs would call them. Nothing is more frustrating for A Players than having to work with B and C Players who slow them down and suck their energy. In that sense, “The best thing you can do for employees — a perk better than foosball or free sushi — is hire only ‘A’ players to work alongside them. Excellent colleagues trump everything else,
All these great biz leaders know one thing — nothing interesting can come out of your brain that you don’t put in first. Having a natural curiosity and thirst for learning separates the good from the great in our experience. Happy reading!
4. Give recognition and show appreciation. “The deepest principle of human nature is the craving to be appreciated,” wrote William James, the father of American psychology. It is impossible to be motivated and do great work if you don’t feel that somebody cares and appreciates what you do. Studies have shown that for people to be happy and productive at work, they need to experience positive interactions (appreciation, praise) vs. negative (reprimands, criticism) with their manager in a ratio of at least 3:1. (Watch out: For a marriage to work, you actually need a 5:1 ratio!!) So make it a simple habit to thank people each and every day — and that includes using the word generously in emails to your team. The way people want to receive recognition varies greatly: public vs. private, material vs. immaterial, from peers vs. from superiors, etc. Great managers test different approaches and observe reactions until they find the triggers that work best with each of their people. At MOM’s Organic Market, managers will sometimes publicly recognize employees who have performed well, but CEO Scott Nash has often found that one-on-one comments are most effective.
The 75 Measures Every Manager Needs to Know, by Bernard Marr.
The bottleneck is always at the top of the bottle!
KEY QUESTION: Are the stakeholders (employees, customers, shareholders) happy and engaged in the business; and would you “rehire” all of them?
How Fast Can Your Company Afford to Grow?
One thing we learned while building Google is that it’s easier to find what you’re looking for if it comes looking for you. What we’re looking for are the best engineers in the world. And here you are.
To do this, Buckingham suggests taking a couple of weeks and documenting all those activities you either love or loathe. This is precisely what Melbourne has her programmers do regularly, noting all of the activities that drain their energy and keep these techies away from their primary strength: programming. She then eliminates those activities no one should have to do (they creep into every job) and then uses the remaining list to create a Job Scorecard for a new position — to be filled by a new chess piece that loves to do what others hate. Result: happier, more productive, and loyal programmers.
Harvard Business Review article titled “Building Your Company’s Vision,” by James C. Collins and Jerry I. Porras.
Integrity matters • Think like a customer • Spirited fun • Be quick, but don’t hurry (borrowed from legendary basketball coach John Wooden) • Employees are critical • Small details are huge • Take care of each other
The Vision Summary tool, described in “The One-Page Strategic Plan” chapter, will provide your team with an easy-to-remember summary of your vision.
Most teams, when asked to determine a Purpose, often describe Brand Promises instead. (The Brand Promise concept is covered in the next chapter.) When asking the five whys, a staffing company might conclude, “We help our clients hire the best talent and save them valuable time in the process.” These might be two accurate Brand Promises — Best Talent and Save Time — but the Purpose goes deeper than just describing the attributes of your product or service. For Michigan-based staffing firm EmploymentGroup, for example, the deeper Purpose is “Helping people succeed.
Practice what we preach • Nothing less than ecstatic customers • First class for less • Honor intellectual capitalists • Everyone an entrepreneur • Never, ever, ever give up
People are not resources that you consume.
And our more progressive clients, monitored by their CFOs, are starting to require a specific number of hours of ongoing education at all levels of the organization (we suggest 12 hours for the frontline; 25 hours for middle management; and 45 to 60 hours for senior leaders as a starting point). Worried about spending all that money on training only to watch your people go elsewhere? The research definitively shows that training and development increases loyalty. Besides, what’s the alternative? Do you really want your people not to be the best-trained for the jobs they have to do? And how much should you spend on training? It obviously depends, but 2% to 3% of your payroll is a good benchmark. Who should you spend it on? Senior leaders, middle managers, frontline employees? They all need training, but focus first on your middle management. In most growth companies, they have the hardest jobs and are critical to employee engagement and retention, yet get the least preparation for it.
Famous sales coach and dear friend Jack Daly suggests, “Why don’t you throw people a party when they start, instead of when they leave?” Sydney-based software firm Atlassian sends each new employee, whatever his or her position, to a resort spa the weekend before the start date as a way to celebrate the new job. The spouse or a guest gets to go along — making both new employees and their spouses raving Atlassian fans.
