The more measurable a plan is, the better it will be executed.
Now that you are familiar with the essentials of the Rockefeller Habits, it is time to continue forward on your path to business growth and apply them to your team and organization.
I have personally experienced the power of improving the Rockefeller Habits with my own team as well as with Clients. Even a partial adoption of the Rockefeller Habits habits can significantly impact a team and organization’s productivity and profitability.
I recommend reviewing the Rockefeller Habits Checklist (™) with your team to identify opportunities for improvement and growth.
How to Implement Each Rockefeller Habit
Verne Harnish organized a checklist of the Rockefeller Habits with four specific action items under each. His second book, Scaling Up: Mastering the Rockefeller Habits 2.0, details how to implement the habits in great depth. Let us examine the points he makes on how to exercise the Rockefeller Habits in your organization successfully.
Rockefeller Habit #1
The executive team is healthy and aligned.
- Team members understand each other‘s differences, priorities, and styles.
- The team frequently meets (weekly is best) for strategic thinking.
- The team participates in ongoing executive education (monthly recommended).
- The team is able to engage in constructive debates and all members feel comfortable participating.
Several years ago, I worked with a manufacturing company with passionately-engaged co-founders. One was the CEO and the other was the CTO. Both were shareholders with a great deal of pride as well as very strong personalities.
Unfortunately, the executive team was not aligned. In fact, quite the contrary. The executive team was essentially split in terms of their loyalty and ultimately split with whom they viewed to be truly in charge. Making matters worse, the CEO and CTO were loyal to the teams they worked with the most rather than their respective First Teams.
Despite this performance drag from the top, this company had been highly successful. It was inevitable that this drag would catch up to them and in fact did so as their most recent quarters found softness in their performance.
A newer executive team member who previously brought us in to facilitate a Five Dysfunctions of a Team Workshop (which had been successful) also brought me in to help get the team on track here. Diagnostics were deployed and helped identify root causes and prescriptive suggestions.
After interviewing several team members, it was clear that significant energy was being expended on activities that were not actually driving the business forward. In fact, the executive team was split and team members were supporting their respective co-founder. Precious energy was wasted on gossip, workarounds, and misaligned focus/strategy. Loyalty was split. The executive team’s “Due North” compass heading was divided.
A significant source of friction for this executive team was that they did not understand the differences, priorities, and styles of their fellow team members. As a result, the executive team was not functioning as a true team should. What needed to be discussed was not always being discussed.
An additional barrier to this company's growth was that the executive team members were not meeting for strategic thinking. Furthermore, ongoing executive education was not in place. And most importantly, the executive team was not engaging in constructive debate with all members engaging similarly.
As dysfunctional as this all sounds, this is actually more common than one may want to admit. EVERY executive team is dysfunctional to some degree. There is always work to be done. Any dysfunction at the executive team level acts as a drag on the performance of the entire organization. While these costs are sometimes difficult to quantify, the costs are very, very high.
All problems start at the head…
NOTHING is more important than how the executive team works together, hones strategy, and solves problems. Keeping your executive team healthy and aligned is not a one-and-done annual engagement or something done when everything is particularly bad. Keeping your executive team healthy and aligned is like brushing your teeth and exercising. It is best done with a rhythm.
Review Rockefeller Habit #1 and ask yourself with candor, “On a scale of 1-5, where is our executive team?” Ask your executive team members to do the same - anonymously if necessary. Any score less than a perfect five deserves immediate and ongoing attention.
Rockefeller Habit #2
Everyone is aligned with the #1 thing that needs to be accomplished this quarter to move the company forward.
- The Critical Number is identified to move the company ahead this quarter.
- 3-5 Priorities (Rocks) that support the Critical Number are identified and ranked for the quarter.
- A Quarterly Theme and Celebration/Reward are announced to all employees that bring the Critical Number to life.
- Quarterly Theme/Critical Number posted throughout the company and employees are aware of the progress each week.
“If you don’t know where you’re going, any road will get you there.” – Lewis Carroll
Is every single team member on your team - in your company - aligned around the #1 thing that needs to be accomplished in order to move the company forward?
Unless you are actively aligning your every single team member around the “one thing” to accomplish this quarter, your team is not aligned. Few things are as expensive as the lack of centralized focus in terms of misallocated time, talent, energy, and resources.
Many teams and organizations instead rely on what is essentially old data to make/drive future decisions. The ultimate critical number for companies is profitability over some time period. Imagine using a rear view mirror to make adjustments to current and future driving corrections. Absurd, right?
Unfortunately, many (perhaps most) companies ultimately depend upon a monthly, quarterly, or even annual profitability figure to signal if their “ship” is on or off course.
This practice is especially dangerous - particularly in uncertain economic times.
Yet many businesses, particularly privately held, small, family-owned businesses, operate in this manner and they are imperiling themselves. The danger is obvious - that a problem could manifest for a month or several or perhaps even longer and take much longer to address than it should - costing time, talent, energy, and resources.
When I am onboarding a new Client, I customarily ask each team member what their Critical Number is and what needs to be accomplished that quarter to move the company forward.
The following two responses are typical.
- Blank stare.
- Some derivation of, “I do not know, but that is an excellent question.”
Right now is the perfect time to shape and create this clarity.
If you expect - hope for your organization / team to win - then every team member must:
- Know the Critical Number they are contributing to.
- Understand the 3-5 Priorities (Rocks) that support the Critical Number.
- Feel motivated to contribute meaningfully.
When team members know the Critical Number with the supporting 3-5 Priorities (rocks) and feel motivated to contribute meaningfully, fewer resources are wasted or expended, yielding stronger results.
Rockefeller Habit #3
Communication rhythm is established and information moves through organization accurately and quickly.
- All employees are in a daily huddle that lasts less than 15 minutes.
- All teams have a weekly meeting.
- The executive and middle managers meet for a day of learning, resolving big issues, and DNA transfer each month.
- Quarterly and annually, the executive and middle managers meet offsite to work on the 4 Decisions.
I always get a number of thank you’s from grateful team members when Rockefeller Habit #3 is fully adopted by their employer.
I have observed firsthand what happens when a team and organization move from dull and boring meetings that are rarely on track to daily 15-minute huddles that focus on tactical issues, with updates regarding larger issues pushed to the weekly meetings.
One Client in particular went from ad hoc meetings that were dull and boring to weekly 90-minute discussions to review progress on quarterly priorities and engage team members. The results were speed coupled with improved morale.
Companies that adopt a daily huddle/weekly meeting/monthly management meeting rhythm go faster - much faster than those who do not.
Team members who feel their organization is focused, disciplined, and on track are more confident that their organization will accomplish its goals and objectives.
Rockefeller Habit #4
Every facet of the organization has a person assigned with accountability for ensuring goals are met.
- The Function Accountability Chart (FACe) is completed (right people, doing the right things, right).
- Financial statements have a person assigned to each line item.
- Each of the 4-9 processes on the Process Accountability Chart (PACe) has someone that is accountable for them.
- Each 3-5 year Key Thrust/Capability has a corresponding expert on the Advisory Board if internal expertise doesn’t exist.
The foundation of scaling up a winning company hinges on the People Decision - having the “right people on the bus” (Jim Collins). As an organization scales, it is essential to have “the right butts in the right seats at the top of the organization” or “the right people doing the right things right” (Verne Harnish).
Accordingly, it is essential to be clear about who is responsible for doing what and who is accountable - who has responsibility and who has authority. It is essential to understand the distinctions between accountability, responsibility, and authority.
Let's get crystal clear about what "accountability" means. As Verne Harnish shared in his book “Scaling Up,” “If more than one person is accountable, then no one is accountable.” Consider the core processes of your organization. Each must have an owner. If there are multiple owners, then no one is truly accountable. The buck stops at one person.
Complete the Function Accountability Chart (FACe) as well as the Process Accountability Chart (PACe) to enhance clarity.
Rockefeller Habit #5
Ongoing employee input is collected to identify obstacles and opportunities.
- All executives (and middle managers) have a Start/Stop/Keep conversation with at least one employee weekly.
- The insights from employee conversations are shared at the weekly executive team meeting.
- Employee input about obstacles and opportunities is being collected weekly.
- A mid-management team is accountable for the process of closing the loop on all obstacles and opportunities.
“None of us is as smart as all of us.” - Kenneth Blanchard.
Are you fully tapping your team’s brain and strategy power?
Chances are, you are not. Unfortunately, this is completely normal and very, very expensive. Most of the costs are hidden.
There was a time when I felt that I knew more than the collective intelligence of my team. I was guilty of failing to tap team members for their ideas. As a result, my business became stuck. It was only until I brought in a respected consultant to help get my team and business unstuck that I came to realize the power of tapping the individual and collective minds of the team. Part of the process my consultant deployed was to engage every team member in a “start/stop/continue dialogue” where they were asked:
- What should we start doing?
- What should we stop doing?
- What should we keep doing?
What came out of that inquiry was a treasure trove of information and strategy ideas. Many were adopted within 30-45 days with some seismic shifts occurring shortly afterward.
Several years ago, I had a manufacturing Client in Chicago who implemented a start/stop/continue with several hundred team members. While this company had a turnover problem, they had a loyal base of team members, but they also had a turnover problem. One of the many results gleaned from a start/stop/continue was learning that team members were very distracted during their lunch hour trying to eat lunch and get their personal business attended to. My Client decided to bring in lunch and encouraged team members to enjoy a meal on company time so that their lunch hour was more productive. The result was immediate. Morale and productivity improved.
What would your team individually and collectively suggest if they were engaged in a start/stop/continue? What ideas are just a question away from dramatically altering the trajectory of your business?
Rockefeller Habit #6
Reporting and analysis of customer feedback data are as frequent and accurate as financial data.
- All executives (and middle managers) have a 4Q conversation with at least one end user weekly.
- The insights from customer conversations are shared at the weekly executive team meeting.
- All employees are involved in collecting customer data.
- A mid-management team is accountable for the process of closing the loop on all customer feedback.
Profitability is a classic lagging indicator, a reflection of what has already occurred, and while useful, it is inadequate if one wishes to scale their business. If you are still relying on profitability measures to essentially act as a signal of trouble, you could be several weeks or even months too late to do something about it.
It is time to dramatically speed up your feedback loops.
A powerful leading indicator is Customer Satisfaction/Engagement, essentially how your Customer feels about how your company is serving them. This is a powerful predictor of future profitability. Accordingly, it is essential to proactively engage your Customers to identify what is going well and what is not going well. It is also important to understand what is happening in your Customer’s industry, their world. What are your Customers hearing with regard to your competition? Verne Harnish calls this a “4Q conversation”.
If you truly wish to keep your finger on the pulse of how your Customer feels about your company, adopt a NPS (Net Promotor Score) to measure Customer Satisfaction and engagement. Better yet, pick up the phone and engage Customers who score your organization high and low alike to identify opportunities for celebration and improvement.
Rockefeller Habit #7
Core Values and Purpose are “alive” in the organization.
- Core Values are discovered, Purpose is articulated, and both are known by all employees.
- All executives and middle managers refer back to the Core Values and Purpose when giving praise or reprimands.
- HR processes and activities align with the Core Values and Purpose (hiring, orientation, appraisal, recognition, etc.).
- Actions are identified and implemented each quarter to strengthen the Core Values and Purpose in the organization.
Are your organization’s Core Values and Purpose more like an incandescent light bulb or a laser?
An incandescent light bulb produces a broad spectrum of light, suggesting that it emits the entire visible spectrum of light. This is why lightbulbs are typically producers of white light.
Most organizations’ Core Values and Purpose are similar to the white light of an incandescent light bulb.
In contrast, a laser emits a specific wavelength of visible light. The wavelength is what determines a laser’s specific color. Organizations that purposefully shape, share, and reinforce their Core Values and Purpose are like a laser light. `
Core Values and Purpose are much like the North Star in guiding decisions, communication, and strategy.
Make no mistake. Every organization has Core Values and Purpose. The question is, “Are the core values and purpose intentional or are they simply a by-product of the sum total of the values of your people and how they do what they do?” Many organizations I have been privileged to work with are not intentional about their core values and purpose. The result is these organizations miss out on a powerful opportunity to align hearts, minds, and actions.
While the purposeful development of Core Values and Purpose may seem less important or perhaps even unimportant, wasted time, energy, and resources are anything but.
Rockefeller Habit #8
Employees can articulate the following key components of the company’s strategy accurately.
- Big Hairy Audacious Goal (BHAG®) — progress is tracked and visible.
- Core Customer(s) — their profile in 25 words or less.
- 3 Brand Promises — and the corresponding Brand Promise KPIs reported on weekly.
- Elevator Pitch — a compelling response to the question “What does your company do?”
Team members who know who their Core Customer(s) are, their organization’s three brand promises, and can properly articulate what their organization does through an elevator pitch are profoundly more productive and more engaged.
The rewards of creating this awareness and alignment can be significant. Accordingly, this important endeavor requires a commitment by leadership coupled with the requisite time and energy to ensure team members know who they best serve and what their value proposition is.
Few do this at all, never mind well. I have observed teams, particularly sales teams, that (on a good day) could articulate one out of four Core Customers. It is rare to see an entire organization aligned.
Teams and organizations that are aligned are more like a laser than an incandescent light bulb.
Rockefeller Habit #9
All employees can answer quantitatively whether they had a good day or week (column 7 of the One-Page Strategic Plan).
- 1 or 2 Key Performance Indicators (KPIs) are reported on weekly for each role/person.
- Each employee has 1 Critical Number that aligns with the company’s Critical Number for the quarter (clear line of sight).
- Each individual/team has 3-5 Quarterly Priorities/Rocks that align with those of the company.
- All executives and middle managers have a coach (or peer coach) holding them accountable to behavior changes.
Peter Drucker famously stated, “What gets measured gets improved.” The value of measuring the right things to obtain quality data and making informed decisions is essential to maximizing individual and team performance.
Key Performance Indicators (KPIs) are an essential tool to measure and ensure progress toward and achieving team and organizational goals.
Proper goal achievement requires a known recipe of strategy, activities, and accountabilities. Numbers matter. Without the achievement of key metrics - numbers - the competitive positioning and value to Customers are threatened.
No numbers - no people. No people - no numbers.
Rockefeller Habit #10
The company’s plans and performance are visible to everyone.
- A “situation room” is established for weekly meetings (physical or virtual).
- Core Values, Purpose, and Priorities are posted throughout the company.
- Scoreboards are up everywhere displaying current progress on KPIs and Critical Numbers.
- There is a system in place for tracking and managing the cascading Priorities and KPIs.
This is an easy habit to put into place. It merely requires Habits #7 through #9 to be in place.
When an organization makes plans and performance visible to everyone through scoreboards and conditioning Core Values, Purpose, and Priorities into the mindset of team members, the result is alignment towards accomplishing goals as well as enhanced team member engagement. People like to know where the "bus" is headed and contribute to getting there.
The Next Step to Grow Your Business
Knowledge combined with ACTION becomes power.
Gain more perspective for your business and professional growth by adding these resources to your list.
If you are ready to put in the hard work to transform your team and organization, schedule a meeting with me.