Businesses fail. Often. Failure is obvious.
What is less obvious is the degree businesses are not optimized to the level they could and should be. Businesses that are not optimized are at increased risk from competitors as well as economic forces.
To make matters more complicated, there is a seemingly infinite number of self help, marketing, and business optimization books and gurus. There is plenty of talk about improving systems, reorganizing structure, and ultimately growing businesses. However, few find what really works for the growth to actually happen.
If you seek to truly scale your business and set yourself on a growth trajectory that has been proven, the Rockefeller Habits are your guide.
Implemented by the richest American in history, John D. Rockefeller, these ten business principles were boiled down by Verne Harnish into the Rockefeller Habits. These habits have successfully cut inefficiencies from the day-to-day operations of many businesses, and yours could be next.
I have experienced the clarity and power of the Rockefeller Habits first hand. Several years ago, I hired a consultant to help my team and me scale my business. Long story short, we were stuck. My consultant used Scaling Up (the follow-on book to the Rockefeller Habits) as part of the process.
The process was straightforward and the path became crystal clear. The diagnostics made sense. The recommended adjustments/course corrections made sense. I vividly recall the mixed emotions as I realized the way forward while also realizing that what got me here would not get me there.
I had several painful changes in people - strategy - execution - cash to make.
I quickly made the changes and have never looked back.
The Rockefeller Habits Explained
1. The executive team is healthy and aligned.
All problems start at the head. Leaders set the tone for the entire organization. The trajectory and momentum of the best people and best talent can be thrown off track if leadership is not aligned. There must be clear and dedicated alignment on company vision. Without it, energy and time are not directed efficiently.
To properly scale a team and business, there must be a culture of trust. Vulnerability-based trust is the foundation to open communication. People will not admit mistakes, ask for help, or engage in healthy conflict if there is an absence of trust. The Five Dysfunctions of a Team is a powerful approach to helping the executive team become healthy and aligned. It is imperative that the team meets frequently for strategic thinking and is able to engage in constructive debates with all team members participating.
2. Everyone is aligned with the #1 thing that needs to be accomplished this quarter to move the company forward.
Multi-tasking is overrated. Are you and your team actually getting five different things done well at one time? Or are you merely dividing your attention so no one project receives the necessary complete focus? Growth takes time and can be grueling work. Being pulled in several directions and wasting your time on non-essential tasks do you no favors.
Cut your list down to one key thing to do in the next 90 days. Make sure that this one thing has measurable impact with significance to your overall goal. Imagine that you want to make an extra $1M in revenue for the year. What are the three or four priorities to ensuring success in accomplishing this goal? These priorities are your “rocks” that lead towards that goal. The first quarter’s rock could be setting up an advanced phone routing system to free up your salespeople and improve lead quality. The second quarter’s goal could be to increase downloads of your product demo by 150%. Just be sure that the task is a key indicator of your overall goal. (Also note that quarterly rocks may be adjusted when the time comes. Business growth is a moving target.)
Make sure your entire team is on board with the objectives for the quarter as well as progress. Consider creating a quarterly theme to generate enthusiasm and stickiness.
3. Communication rhythm is established and information moves through the organization quickly.
We have all experienced the unfortunate and unnecessary situations in which the left hand does not seemingly know what the right hand is doing. This does nothing but slow down progress and permeate confusion.
The solution is to engage in a regular meeting rhythm to ensure every team member has the same information, can get direction, and is held accountable for their work outcomes. A regular meeting rhythm can help ensure challenges are identified and addressed quickly. New processes can be implemented quickly. In the long run, when done correctly, meetings expedite instead of hinder project progress.
4. Every facet of the organization has a person assigned with accountability for ensuring goals are met.
The objective is to get the right people doing the right things right.
A lack of accountability directly translates into the increased risk of essential items falling through the cracks. It is common that accountability is not assigned to specific members of a group. When that happens, there is a potential web of pointing fingers as the buck is continually passed. If one person is in charge of one item, it is significantly easier to manage. Plus, that person is invested. It is their responsibility and they rise or fall with the execution of the task.
Customer experience is an example in which there are many people involved with the outcome. So how do you identify breakdowns in something so nebulous? Each person within the process should be accountable for their singular part. Did the information packet email get sent: yes or no. Was there a follow-up phone call in the second week period: yes or no. Did the customer’s voicemail get a response within 24 hours: yes or no. All of these smaller parts greatly contribute to the overall goal, but they might not happen if there is uncertainty as to who is accountable.
5. Ongoing employee input is collected to identify obstacles and opportunities.
No one knows the daily operations of a business better than those in the positions to carry out tasks. Managers should be collecting feedback from their team members. Team members are a gold mine of data! They have great insights into what the company should “Stop, Start, or Keep” doing.
Plus, by meeting with at least one team member weekly, the manager is better informed before going into executive meetings.
6. Reporting and analysis of customer feedback data is as frequent and accurate as financial data.
Financial data informs you of one key aspect of the business’ health. Customer feedback is just as valuable. The two can be interconnected as well: the numbers can point to a struggling product while the Customer can point to why the product is struggling. Smart businesses recognize the importance of market research and consistently seek improvements.
Smart businesses proactively and continuously seek this information, adopt incremental improvements, and check for effect. This is feedback looping and it is essential - the faster, the better.
7. Core values and purpose are “alive” in the organization.
People like to feel that they are a part of something bigger than themselves. I have already stressed the importance of clarifying your Due North, which is your mission, vision, and values, coupled with your culture code. It is a shame when companies piece together meaningless corporate speak and parade it as culture.
Keep in mind that your company culture is not what you say it is. A company’s culture is a direct reflection of the collective mindset of every team member. It must align with the company goals in order to work towards those goals. Similarly, it is not enough to make a culture code and set it aside. The values and purpose must be practiced every single day, otherwise what was the point? You attract the right talent when you walk the walk.
8. Employees can articulate the key components of the company’s strategy accurately.
We all know the child’s game of Telephone where one message gets modified as it passes from one person to the next. The end result is not how you want your company portrayed, believe me.
Your brand is worth not just your attention, detail, and passion, but that of every single team member. Each team member must be a brand ambassador. Can all team members articulate an accurate elevator pitch? Can they explain the “why” behind what you do?
The company’s strategy should include a “Big Hairy Audacious Goal,” how to identify ideal core Customers, and brand promises. With everything clearly defined, everyone is more likely to stay on track toward the one overarching mission. Side projects or distractions are easily rejected since they do not contribute to the Big Hairy Audacious Goal.
9. All employees can answer quantitatively whether they had a good day or week.
“In God we trust. Everyone else bring data.”
Team members that know their Key Performance Indicators or KPI’s are more likely to be aligned with the critical number and activities that help them move the ball forward with regard to their 3-5 quarter priorities’ Rocks.
If the KPIs are not on track, it could signify a miscommunication on where to expend efforts.
10. The company's plans and performance are visible to everyone.
Peer recognition, incentives, and some degree of competitiveness have been instilled in humanity from childhood. Hence “gold stars” in classrooms. There is no shame in that. If you expect your team and company to keep their eye on the ball and move it forward, it is essential that they are able to understand their impact on the score. Accordingly, performance scoreboards should be displayed for all to see. Performance scoreboards not only remind people of core values and goals but keep them engaged. Tracking progress visually literally shows how each team member is impacting the team and company’s goals.
I have worked with teams and organizations that were extremely transparent with scoreboarding and those that were not. There is an unmistakably direct correlation between teams’ and organizations’ degree of transparency and their performance.
Invest in yourself, your team, and your company. See how you can further apply these habits with my Rockefeller Habits Implementation Guide.