Here are my notes from Scaling Up (Mastering the Rockefeller Habits 2.0).
Four Keys to Scaling Your Business
- Attract and keep the right people
- Create a truly differentiated strategy
- Driving flawless execution
- Having plenty of cash to weather the storms
It took Starbucks 20 years to perfect its business model and reach 100 locations. Today, it’s got more than 18,000 stores in 62 countries and more than 150,000 employees.
Everything should deb made as simple as possible, bot not simpler. – Albert Einstein.
Get it down, then get it right.
Stick to the business and markets you know best.
Expanding from three to four people grows the team by 33% but increases complexity by 400%.
Leaders don’t have to be years ahead; sometimes minutes are enough.
The job of the leaders it make sure the right people are doing the right things.
Every accounting statement needs a WHO column. Numbers without responsible people are dangerous.
All people should agree on the four to nine key processes in the organization.
Even smart people (doctors) need checklists. In one hospital, a checklist prevented 43 infections and 8 deaths, while saving $2 million in costs (The Checklist Manifesto)
An “A Player” is someone in the top 10% of available talent who is willing to accept your offer. Every job needs a scorecard – a description of the outcome you want from job responsibilities.
Your value and culture should act like an immune system, spitting out people who don’t align.
Your team is playing chess (pieces move differently based on unique strengths) not checkers (pieces all move the same)
You are not going to find great employees on job websites. Create a recruitment strategy.
One great person replaces three good people.
Paying people less than what their worth or in line with some compensation strategy ensures mediocrity.
Nothing is more frustrating to an A player than having to work with B and C players who drain their energy.
Think of your org chart and title as “direct supports” rather than “direct reports.”
The only way to grow a company is people first. Spend 2-3% of your payroll on development.
Core Values are the rules and boundaries that define the company’s culture and personality, and provide a final “should/shouldn’t” test for all the behaviors and decisions by everyone in the firm.
If you are less than five years old, your values are being formed.
You don’t create core values, you discover them. Anchor them in culture with a story. Everyday reinforcement is the most important step.
The leader’s job is to make strategic decisions, but it’s wise to recruit several people to help navigate.
7 Parts to the Strategic Plan
- Words you own. Keywords will help you defend your niche, simplify execution, and turn your revenue into huge profit.
- Sandbox and brand promises. Where are your customers? What are you really selling them? What ar your three brand promises? What do you measure?
- One phrase strategy. IKEA is flat pack furniture. Apple is closed architecture.
- Differentiating Activities (3-5 Hows) Your differentiators can’t be done cheaply or quickly or else they would be easy to copy.
- X Factor. (The 10x Advantage). Outback provides huge bonuses for managers that stay long term and hit milestones.
- Profit per X and BHAG.
Break your BHAG down into a 90-day focus. Choose a quarterly theme to rally everyone around what’s most important right now.
What’s the single most important thing going on in our business in the next 90 days that we want everyone to be aligned on?
Everything needs a number – a determined outcome that is tracked by a key performance indicator. If you’re not measuring it, it’s not going to get done.
Have a start/stop/keep conversation:
- What should we start doing?
- What should we stop doing?
- What should we keep doing?
Every member of the team needs to be able to answer objectively: “Did I have a great day or week?”
Put your metrics, goals and plans up big and visible in a place where meetings happen.
What’s the one critical number you need to measure?
The MEETING RHYTHM is the heartbeat of the organization. Like Jazz, which is improvisational, a great company must master the underlying discipline to allow for excellence.
Meetings with an agenda and a purpose actually save time.
- Daily Huddle. 5-15 minute meeting to discuss tactical issues and provide updates. Saves needless email exchanges. Answer these questions: “What’s up today?” “What could prevent me from having a great day?”
- Weekly Meeting. 60-90 minute discussion to review progress on the quarterly priorities and tap brainpower on one or two main topics. Keeps priorities top of mind. Start by sharing good news, then review priorities and discuss gaps in progress. Spend the majority of the time on one or two topics.
- Monthly Management Meeting. Half-day to Full-day meeting to learn and collaborate and address one or two big issues requiring several hours of effort.
- Quarterly and Annual Planning meetings. One to Three-Day off-site to establish the next quarterly or annual theme. Set the strategic direction for the year and beyond.
Stop saying, “Well, this is just the way it is in our industry.”
Review a DAILY report of available cash and a note on why it changed in the last 24 hours.