I am currently reading the book “Scaling Up” by Verne Harnish’ and it’s just fantastic.
Find below the notes:
Working with Team: The key is an effective daily, weekly, monthly, quarterly and annual meeting
7 Ways to Increase the Cashflow.
- Price, Volume (Ship more, quantity, reduce the cost of raw materials, reduce operating expenses, collect money from debtors, reduce the inventory, and slow down the payment to creditors
There are 28 Million Firms in the US, of Which ONLY 4% ever reaches the mark of >$1 Million in Revenue. And only 0.4% of those reach to >$10 Million in revenue
> This stat is fantastic. I am using it to benchmark my company and see where we have reached.
People Strategy Execution and Cash –> Four Main Areas for GROWTH for any company. If it’s addressed then can grow quite well.
Warren Buffets first priority would be reservation of much time for quiet reading and thinking
Nothing Interesting can come out of your brain that you don’t put in first
The author recommends two books 1) E-myth and 2) Lean Startup
The author also recommends Antifragile to save your family, businesses from the situation of going extinct. The context was that large number of companies go extinct or disappear and hence we need to be antifragile.
Steve Jobs: I’m always amazed how overnight successes take a helluva long time. If you have been in a business less than 25 years, you still have time to make it big; if it has been more than 25 years, and you’ve not scaled up, it’s never too late.
Senior leaders know they have succeeded in building an organisation that can scale – and if fun to run – when they are dumbest people in the room
> Context: Your Business System or processes should be so strong that even a dumb person can run it.
The best leaders have right questions, but turn to their employees, customers, advisors, and the crowd to mine the answers.
Leading People
- Establish a handful of rules, repeat yourself a lot, and act consistently with those rules.
Leading Execution
Implement Three Key Habits
- Set a handful of priorities (fewer the better)
- Gather quantitative and qualitative data daily, weekly to guide decisions and
- Establish an effective daily, weekly, monthly, quarterly, and annual meeting rhythm.
in managing cash: don’t run out of it.
Barriers to Scaling Up
- Increasing number of Capable Leaders in the Company
- Infrastructure
- Effective Marketing Function
Scaling up a business is like climbing a mountain.
Most people overestimate what they can do in one year and underestimate what they can do in ten years
Routine Sets you free
Goals without routine are wishes; routines without goals are aimless.
The most successful business leaders have a clear vision and the discipline (routine) to make it a reality
5) Effective Leaders passes these two Test:
- They don’t need to be managed
- They regularly Wow the team with their insight and output
Strategic thinking requires a handful of senior leaders meeting weekly
The 7 Strata of Strategy
- what words do you own in the mind of your targeted customer (e.g. Google – Search)
- who are your core customers, what three brand promises are you making them? (South West Airlines promises low fares, lots of flight, lots of fun)
- What is your brand promise Guarantee (Oracle has been advertising the chance to win $10 Million if its exadata servers don’t outperform the competitors by a factor of five)
- What is your One Phrase Strategy that likely upsets customers (Apple’s closed system) but is key to making a ton of money and blocking your competition?
- what are the three to five activities that fit Harvard strategist michael porter’s definition of the essence of differentiation
- what is your x factor – a 10 times or 100 times underlying advantage over the competition – that completely wipes out any and all rivals
- what are your profit per X (economic driver) and BHAG for the company?
You know you have execution issue if three things exists:
- There is a needless drama in the organisation (someone shipped out late, the invoice was wrong, someone missed a meeting,etc)
- Everyone seems to be working more hours, spinning his wheels,or spending too much time fixing things that should have been done right the first time
- Most important, the company is generating less than three times industry average profitability
Grow Where You’re Planted, In Other Words, stick to the businesses and market you know the best
To get to 10 employees founders must delegate activities in which they are weak. To get to 50 employees, they have to delegate function in which they are strong.
Successful delegation requires four components:
- Pinpoint what the person or team needs to accomplish
- create a measurement system for monitoring the progress
- provide feedback to the team or person
- give appropriately timed appreciation and reward
The #1 functional barrier to scaling up is the lack of an effective marketing department.
The key to effective marketing is setting aside one hour per week to focus on marketing i.e establish a marketing meeting. Second to make a list of top 25 influencers – you need to get behind the venture to scale it up.
The bottleneck is always at the top
Wealth
Besides determining how much money you want to set aside for retirement, set goals for the amount of money you want to donate to causes and communities that matter to you over the next several years.
Decide how much money you need to support activities with your family and friends, investing in experiences, in coming 12 months that create lasting memories.
Overall, focus how your wealth will flow through in the service of others, rather than hoarding it. This seems to attract more wealth – the natural law of reciprocity.
https://app.kpilibrary.com/ for identifying the KPIs of people
The fundamental job of a leader is prediction
Attracting and hiring A Players, at all levels of the organization, is as critical as landing the right customers. This requires the active participation of the marketing function in the recruiting process and the use of topgrading methodology.
the cost of a bad hire is 15x his or her annual salary, according to topgrading.
An A Player, by the smart’s definition,is someone in the top 10% of the available talent pool who will willing to accept your specific offer.
Team needs to be well rounded but individual members dont have to be.
We suggest the term manager be replaced with coach.
People join companies. they leave managers
What does a great manager do to keep a company’s team happy and engaged?
- Hire fewer people but pay them more
- give recognition and show appreciation
- set clear expectations and give employees a clear line of sight
- Dont demotivate, dehassle
- help people play to their strengths
Studies have shown that for people to be happy and productive at work, they need to experience positive interaction vs negative with their manager in a ratio of atleast 3:1.
Make a simple habit to thank people each and everyday and that includes using the word generously in emails to your team
The best managers are less concerned about motivating their people and more concerned about NOT demotivating them
Nothing is more frustrating for A Players than having to work with B and C Players who slow them and such their energy.
Focus on ways to make your team’s job easier
Focus on eliminating or delegating the tasks that drain you.
In Order to keep your company competitive and your people loyal, you must grow them through education. And investment in people is the biggest single predictor of a company’s ability to beat it’s direct competitors and the overall market.
All growth companies are training companies
The only way to grow a company is to grow the people first
the best growth firms are first and foremost, training companies
The research defintely shows that training and development increases loyalty.
Do You say no 20 times more than you say yes – no to increasing number of opportunities coming your way; no to the wrong customer for your business model; no to nineteen of the twently people wanting to work with you. (We recognize that in the beginining you have to say yesto everyone and everything. but you say yes only until you have the luxury to say no)
The main thing is to keep the main thing the main thing
Senior Leaders need to be in the market 80% of the week, either figuratively or literally
In good companies, senior leaders are stressed out
in great companies, senior leaders are relaxed
#1 weakness of growth firm is marketing, #2 is accounting
Boni Satani's Blogging Den 