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

by Verne Harnish

We’ll reinforce the power of repetition throughout the book. Specifically, we will look at: 1. Core Values: the handful of rules defining the culture, which are reinforced through your People (HR) systems on a daily basis 2. Core Purpose: the top leader’s regular stump speech to keep everyone’s heart engaged in the business 3. Big Hairy Audacious Goal (BHAG®): the 10- to 25-year goal that provides constant context for all of the decisions made throughout the organization 4. Priorities/Themes: a handful of three- to five-year, one-year, and quarterly priorities, which require repeated review on a daily and weekly basis to keep them top-of-mind

Nothing is tougher and more time-consuming than having to replace people who haven’t kept up with the growth of the business.

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. It’s especially important that top managers lead by example, making sure their behaviors and decisions align with the Values.

If the Core Values are the soul of the organization, the core Purpose (some call it “mission”) gives it heart. The Purpose answers the ageless question “Why?” Why does what we do matter, and what difference are we making in the world? Why would our customers or the world miss us if we weren’t around?

We find that a powerful Purpose tends to revolve around a single word or idea: • 3M: Innovation • Disney: Happiness • Wal-Mart: Robin Hood

Brand Promises: Debby the Do-It-Yourselfer wants laminate flooring, and BuildDirect grabs her attention. So why should she buy from BuildDirect vs. its competitors? There have to be some compelling reasons that are evident from the moment she visits BuildDirect’s website. We call these reasons the Brand Promises. Most companies have three main Brand Promises, with one promise that leads the list. For BuildDirect, the Brand Promises are “Best price, best customer service, and product expertise.” “Best price” is the lead promise. The key is to define the company’s Brand Promises quantitatively so they can be measured and monitored. Best price, in BuildDirect’s case, means 40% to 50% less than anyplace else where you can purchase a similar product. BuildDirect has teams monitoring prices daily to make sure that it can keep this promise, or that it exits certain products and categories when it can’t.

Refrain from using the words “quality,” “value,” or “service” as Brand Promises. They are too vague. Their definitions may vary, depending on the group of customers you’re facing. McDonald’s delivers what Verne considers high value and service if it’s noon on Saturday and he and his wife are looking for a place where they can grab a quick bite with their four children without standing in a long line, and get a few minutes of peace while their two youngest play in the indoor playground. However, as a place to go on a date night, McDonald’s has little value to them. McDonald’s has defined its three measurable brand (value) promises as speed, consistency, and fun for kids. Getting clear about this and then delivering on these promises (including sending specific updates on these KPIs to its franchise owners daily) helped it pull off one of the most respected modern business turnarounds.

A promise has no weight if you don’t keep it, resulting in lost customers and negative word-of-mouth publicity. Thus, it’s critical that you know how to measure daily whether you’re keeping your promises.

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an absence of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results.