Mastering The Rockefeller Habits Checklist

In 2002, business growth expert Verne Harnish published his seminal best-selling business book Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm. It detailed a set of ten 100-year old management principles used by the great John D. Rockefeller, the founder of Standard Oil and widely considered the wealthiest person in modern history. The Rockefeller Habits were further expanded on in Harnish’s subsequent book Scaling Up – Mastering the Rockefeller Habits 2.0 that was also a best seller.

The Rockefeller Habits Checklist™ stands as one of the best frameworks to execute your company’s strategy. It ties into the Scaling Up Growth Tools framework. This simple 10 item checklist that encompasses 40 vital leadership and management habits has already helped over 40,000 companies scale up to over $10 million, $100 million, a few a billion, and beyond! The checklist has reduced the time requirements and inherent stresses that running a business often dictates, and at the same time, it increases the fun, fortune, and cash flow of the company. That’s the goal, right?

How to Implement the Rockefeller Habits:

The best way to implement the Rockefeller Habits is to introduce only one or two each quarter. Your choice of habits to focus on initially is based on what you and your executive team believe will give your company the most benefit. As a result, over a 24 – 36 month period you will make considerable progress on all ten habits. Once you have implemented each habit, in the spirit of lean management, the best practice is to go back to each one for further process improvement. It is our belief at Scaling Up that a firm routine with rhythm is the best methodology, or tool, to effectively implement the habits. As Harnish says, “Routine sets you free,” and this has proven to be true time and time again.

Please note that as a certified Scaling Up coaching partner, some sections of this guide are directly sourced from Scaling Up and used with permission of Scaling Up Certified, LLC.

What Are the 10 Rockefeller Habits?

01 The executive team is healthy and aligned.

02 Everyone is aligned with the #1 thing that needs to be accomplished this quarter to move the company forward.

03 Communication rhythm is established, and information moves through the organization quickly.

04 Every facet of the organization has a person assigned with accountability for ensuring goals are met.

05 Ongoing employee input is collected to identify obstacles and opportunities.

06 Reporting and analysis of customer feedback data is as frequent and accurate as financial data.

07 Core Values and Purpose are “alive” in the organization.

08 Employees can articulate the key components of the company’s strategy accurately.

09 All employees can answer quantitatively whether they had a good day or week.

10 The company’s plans and performance are visible to everyone.

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Table of Contents

ROCKEFELLER HABIT #1 – HEALTHY TEAM

ROCKEFELLER HABIT #2 – TEAM ALIGNED ON THE #1 PRIORITY

ROCKEFELLER HABIT #3 – MEETING RHYTHMS

ROCKEFELLER HABIT #4 – THE FACE AND PACE OF THE COMPANY: FUNCTIONAL AND PROCESS ACCOUNTABILITY

ROCKEFELLER HABIT #5 – GATHER EMPLOYEE INPUT

ROCKEFELLER HABIT #6 – GATHER CUSTOMER INPUT

ROCKEFELLER HABIT #7 – CORE VALUES AND PURPOSE ARE “ALIVE” IN THE ORGANIZATION

ROCKEFELLER HABIT #8 – YOUR ENTIRE TEAM CAN ARTICULATE YOUR STRATEGY

ROCKEFELLER HABIT #9 – KPIS FOR EVERYONE

ROCKEFELLER HABIT #10 – SCOREBOARDS EVERYWHERE

The Rockefeller Habits Checklist

Rockefeller Habit #1 – Healthy Team

The executive team is healthy and aligned

1.1 Team members understand each other’s differences, priorities, and styles.
1.2 The team meets frequently (weekly is best) for strategic thinking and renewal.
1.3 The team participates in ongoing executive education (monthly recommended).
1.4 The team is having fun together and is able to engage in constructive debates, and all members feel comfortable participating.

This #1 Rockefeller Habit is the most important and must be the first one to be implemented. Unless you have a healthy and aligned executive team that knows how to debate critical issues and “fight fair” without feuding and creating unhealthy resentments and fiefdoms, you will not be able to effectively implement anything else in your business.

The best practice here is to use Patrick Lencioni’s The Five Dysfunctions of a Team framework. By following the tenets of this framework – Absence of Trust, Fear of Conflict, Lack of Commitment, Avoidance of Accountability, and Inattention to Results – you can hone your leadership team’s collaboration skills. To fine-tune the health of your team, we recommend that, as a group, you revisit this exercise at least once a year.

Combined with regular weekly team strategy and accountability sessions and training, this tool will go a long way in forging a highly effective and aligned executive leadership team. These shared learning experiences will be built on trust, communication, commitment, accountability, and results.

At the foundation of an effective team is trust. Trust is fostered by a shared understanding and a commitment to achieving results. To build shared understanding and keep the team healthy, include time to get to know each other as teammates. In your “meeting rhythms,” start with personal and professional good news, meals eaten together and social time during strategic planning retreats and monthly management meetings. This team building will pay dividends in terms of results, happiness, and retention.

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Rockefeller Habit #2 – Team Aligned on the #1 Priority

Everyone is aligned with the #1 thing that needs to be accomplished this quarter to move the company forward

2.1 The Critical Number is identified to move the company ahead this quarter.
2.2 3-5 Priorities (Rocks) that support the Critical Number are identified and ranked for the quarter.
2.3 A Quarterly Theme and Celebration/Reward are announced to all employees that bring the Critical Number to life.
2.4 Quarterly Theme/Critical Number posted throughout the company and employees are aware of the progress each week.

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Team alignment is generated by the One Page Strategic Plan which is developed annually and updated quarterly. Alignment on the #1 Priority bridges your 10–20 year BHAG® (Big Hairy Audacious Goal – trademarked by Jim Collins and Jerry Porras) with the Critical Number needed to move the company towards the BHAG® in the coming quarter.

The proper identification of the Critical Number is, well, critical! Too often leaders only identify the ultimate goal or KPI they want for the quarter. The problem with this approach is that you cannot directly solve for this result. It would be akin to setting a weight loss goal without a plan detailing the specific amount of activity needed to achieve it. While setting an ultimate goal is a fine practice on your journey to your BHAG®, it’s even better to identity the key lead measure that sets up the other important priorities that you need to accomplish.

To identify your Critical Number, think of your priorities as a series of dominoes. The lead domino is the one initiative that when pursued will make it possible for you to accomplish everything else. This is your Critical Number. Oftentimes, the best way to correctly identify your critical number is to identify the bottleneck in your business—the choke point or constraint that is holding you back (also known as the X-Factor)—and address that first. This is why it’s called “Critical”!

Interestingly and somewhat paradoxically, looking at your business this way develops a new way of organizational strategic thinking that will help you outpace the competition. For example, to hit its revenue goal, one Scaling Up client chose to identify the lead measure of 150 referrals per quarter as the Critical Number to hit their growth and revenue objectives. Another client discovered its choke point was getting enough IT consultants ready to go to the field. They determined that being able to train a brand new computer science graduate into a field-ready consultant in 6 months would be a game changer for them and a disruptor to the industry. So developing a field-ready consultant in 6 months became their Critical Number which drove three to five Priorities (Rocks), which enabled them to achieve this game-changing result, subsequently driving growth in revenue and profit.

Rockefeller Habit #3 – Meeting Rhythms

Communication rhythm is established and information moves through the organization quickly

3.1 All employees are in a daily huddle that lasts less than 15 minutes.
3.2 All teams have a weekly meeting.
3.3 The executive and middle managers meet for a day of learning, resolving big issues, and DNA transfer each month.
3.4 Quarterly and annually, the executive and middle managers meet offsite to work on the 4 Decisions (Strategy, Execution, People, Cash).

A key to this and all of the Rockefeller Habits is consistent “meeting rhythms, which allow the members of your team to feel the heartbeat of your organization and move faster and smoother in tempo to the beat. A smooth yet powerful rhythm drives an annual, quarterly, monthly, weekly, and daily meeting schedule that highlights the execution, alignment, and updates to the One Page Strategic Plan. This cadence of meetings fosters teamwork and culture, and through their focus and alignment provides an opportunity to solve problems more quickly, ultimately saving valuable time.

Any organization’s greatest challenge is effective COMMUNICATION. Well run meetings are critical to driving focus, alignment, and issue resolution. This is where a Certified Scaling Up Coach, trained in the Rockefeller Habits and facilitation, can be invaluable to your organization.

Prescheduling your annual, quarterly, monthly, weekly, and daily meetings is important because it can often take longer to set up the meetings than to hold them. Prescheduling ensures that the meetings are prioritized vis-a-vis vacations and business travel plans. By prescheduling the meetings and making them placeholders on the team member’s calendars, it drives individual accountability because each team member will know to be ready to share progress on deliverables.

Here is the specific meeting rhythm designed to support cascading communication around the priorities and metrics driven strategy:

THE DAILY HUDDLE

A quick 5–15 minute meeting held at the same time every morning to align the daily priorities. These should be stand-up meetings to keep them brief and focused. The agenda is to discuss tactical issues and provide updates. A key feature of the daily huddle is that it identifies sticking points that are blocking execution or strategic direction. Normally, the daily huddle saves everyone an hour or so of needless email updates and “Got a minute?” interruptions. Issues that emerge drive the agenda for the weekly meeting.

THE WEEKLY MEETING

A 60–90 minute discussion to review progress and accountabilities on the quarterly priorities, and to harness the collective brainpower of the team in addressing one or two main issues. The meeting also provides time to review market intel garnered from customers, employees, and competitors. Recurring discussion points form the basis of the monthly meeting agenda.

THE MONTHLY MANAGEMENT MEETING

A half- to full-day meeting where all senior, middle, and frontline managers formally report their accountabilities on the progress of their quarterly priorities. It is also a time of formalized executive education done as a team to foster growth and cohesiveness. In addition, one or two big issues should be discussed and solved as a team. The monthly meeting also serves as an ideal format to cascade strategic priorities and execution to middle management and the front lines.

THE QUARTERLY AND ANNUAL PLANNING MEETINGS

At this one- to three-day offsite meeting, leaders update the Scaling Up One Page Strategic Plan and Growth Tools, and they establish the next quarterly and/or annual theme. Plans for The Four Decisions of People, Strategy, Execution, and Cash are worked on. Once each quarter, the leadership team formally cascades plan updates with all employees in a 45-minute meeting.

How to not lose “Traction” in your meetings:

For those businesses that are not yet using the Scaling Up/Rockefeller Habits methodology, one complaint they frequently have is that their “level 10” meetings become bogged down by a growing pile of issues that get put off and never solved.

The strategic-to-tactical meeting rhythm of the Rockefeller Habits ensures that your team maintains focus on the #1 Priority and key Rocks so that your team does not lose “traction.”

Rockefeller Habit #4 – The FACe and PACe of the Company: Functional and Process Accountability

Every facet of the organization has a person assigned with accountability for ensuring goals are met

4.1 The Function Accountability Chart (FACe) is completed (right people, doing the right things, right).
4.2 Financial statements have a person assigned to each line item.
4.3 Each of the 4-9 processes on the Process Accountability Chart (PACe) has someone that is accountable for them.
4.4 Each 3-5 year Key Thrust/Capability has a corresponding expert on the Advisory Board if internal expertise doesn’t exist.

“IF MORE THAN ONE PERSON IS ACCOUNTABLE, THEN NO ONE IS ACCOUNTABLE, AND THAT’S WHEN THINGS FALL THROUGH THE CRACKS.”
— VERNE HARNISH

The FACe of the Company

The Functional Accountability Chart (FACe) Scaling Up Growth Tool lists the functions that every company must embrace, the name of the person who will be held accountable for each function,and the one or two KPIs for which that function must achieve. When completed, this one-page accountability tool helps you diagnose where the gaps in people and performance exist in your leadership team. Keep this in mind as you complete the FACe: each box must contain one name, and only one name. If you have more than one name in a box, you don’t have true accountability. In addition, an empty box can imply that everyone is accountable, but actually, an empty box means no one is accountable. The final step in the FACe exercise is to ask if each person listed on the Growth Tool is the right person to be held accountable for each line item and do we have confidence in their abilities to perform?

Assign a Person to Each Line of the Financial Statements

A key way to drive financial performance in any growing organization is to assign a person’s name to each line item on the three major financial statements: Income Statement/P&L, Balance Sheet, and Statement of Cash Flows. By doing this and reviewing financial performance monthly with this level of accountability, revenue targets will be achieved more consistently and key expense areas (e.g., COGS, overtime labor, and travel) become reduced and contained almost overnight. Likewise, by doing the same on the Balance Sheet and Statement of Cash Flows, critical areas (e.g., accounts receivable and inventory) also quickly improve as focus and accountability is brought to bear.

The PACe of the Company

The pace of a company is set by the speed of its processes. The Process Accountability Chart (PACe) Growth Tool lists those accountable for the 4–9 crucial processes that uniquely drive your business and determines how each process will be measured to ensure it is running smoothly.

Example processes include:

  • developing and launching new products
  • generating leads
  • closing sales
  • scheduling
  • manufacturing
  • delivery
  • attracting, hiring, and onboarding new employees
  • training
  • procurement
  • billing and collecting payments

Almost all of these activities cut across organizational functions and require a coordination of activities that become more complex as the business scales up.

Key Differentiating Activities

The final component of this Rockefeller Habit is tied to column 3 of the One Page Strategic Plan—the Key Thrusts/Capabilities that need to be acquired in the next 3-5 years to differentiate the business and to ensure the 3-5 year goals are achieved. In line with the right people, doing the right things, right mantra of this habit, either an internal company or an advisory board expert needs to be assigned to each corresponding thrust/capability to ensure these strategic initiatives are being worked on.

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Rockefeller Habit #5 – Gather Employee Input

Ongoing employee input is collected to identify obstacles and opportunities

5.1 All executives (and middle managers) have a Start/Stop/Keep conversation with at least one employee weekly.
5.2 The insights from employee conversations are shared at the weekly executive team meeting.
5.3 Employee input about obstacles and opportunities is being collected weekly.
5.4 A mid-management team is responsible for the process of closing the loop on all obstacles and opportunities.

Employees on the frontline are critical to the success of any company. They are in direct contact with the customers as well as the production process, and therefore, their feedback will be timely and accurate. If you don’t listen to what the frontline employees have to say, you will miss out on the value that they bring to your bottom line. A formal routine to gather feedback, suggestions, insights, and input will ensure that an employee feels heard, which will increase their job satisfaction and your retention rate.

Executives should implement a strategy of Start/Stop/Keep conversations. Each week, hold a 10-45 minute focused conversation with at least one employee or group of employees. These conversations will uncover issues and opportunities far better than just a casual chat. Here are several questions that are guaranteed to trigger discussion:

  • What should we start doing?
  • What should we stop doing?
  • What should we keep doing? (Also known as “do more of”)

Pay close attention to the “stop doing” suggestions from your team. Those answers will shed light on what is either directly or indirectly de-motivating your employees.

Becoming adept at gathering insightful information and feedback directly from employees is a vital leadership skill that will benefit your firm in multiple ways, including better decision-making and an engaged workforce that is likely to be more loyal to you. It’s important that these conversations have a direction so that they don’t become gripe sessions. Ask specific, strategic questions that provide valuable insight into your business, especially as it relates to increasing revenue, reducing costs, or enhancing the customer experience.

On the flipside, a sure-fire way to destroy morale is to not close the loop and act on employee suggestions. From a leadership team’s perspective, your failure to execute is actually worse than if you had not asked for feedback in the first place. At the very least, let employees know specifically why an idea cannot be implemented. Responsiveness wins!

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Rockefeller Habit #6 – Gather Customer Input

Reporting and analysis of customer feedback data is as frequent and accurate as financial data

6.1 All executives (and middle managers) have a 4Q conversation with at least one end user weekly.
6.2 The insights from customer conversations are shared at the weekly executive team meeting.
6.3 All employees are involved in collecting customer data.
6.4 A mid-management team is responsible for the process of closing the loop on all customer feedback.

Having 4Q Conversations

If you are serious about providing outstanding customer service and increasing your competitive advantage, it is vital that all executives and middle managers have a 4 Questions (4Q) conversation with at least one end-user customer each week. You should ask your customers the following four questions in a direct communication, such as face-to-face or by phone. They should not be asked in a survey format however, as it loses the intimacy of the conversation.

The 4Q Questions:

  1. How are you doing?
  2. What’s going on in your industry/region/neighborhood?
  3. What do you hear about our competitors?
  4. How are we doing?

This simple, straightforward intel will cut through the clutter and provide actionable insights. Start the conversation by asking about the customer’s general state of affairs. This will help you understand how things are going for them—the good, the bad, and the ugly. It will affirm that you care about them as people, not just customers. Their answer will also help you determine their priorities and understand how your products and services can help them reach their goals.

The second question is all about industry and regional developments, and if you are in a direct-toconsumer business, it will address what their neighbors and peers are talking about. This question helps you identify trends in your customers’ locales so you can target your products, offers, and messaging.

The third question that asks about competitors is important because it often debunks some urban myths coming from the sales team—often for the need to discount price to win deals. When the leadership team asks the customer point-blank what they think of the competition without focusing directly on questions of price, the feedback is often positive regarding critical issues such as service and delivery, and this serves as a valuable counterbalance for those in your organization too eager to discount.

Most of our clients usually outpace their rivals, so we recommend not obsessing on your competition. But this question also serves as a means to gather vital intel on product launches, organizational shakeups, and personnel moves that can be useful to you.

The final question, of course, gives you unfiltered insight into your own performance from the customer’s point of view. We recommend that each member of your executive and mid-level team forge relationships with their counterparts at your customers’ organizations (e.g., CEO to CEO, CFO to CFO, Sales to Sales, Operations with Operations, and so on). Communicating at this functional level will allow you to pick up specialized insights that a more generalized conversation will miss.

This direct “voice of the customer” feedback is an investment in customer retention. Oftentimes as firms grow, they are so busy chasing net-new opportunities that existing customers can feel ignored and neglected. By retaining your valuable base, it allows growth to compound more rapidly.

Discuss at the Weekly Meeting

A key element of the weekly meeting is sharing insights from these conversations with customers. Don’t get bogged down by writing written reports, as the intent is to be agile, but instead, capture the insights in the meeting notes. To avoid the proverbial “sample size of one,” look for correlations and validations from your teammate’s findings to ensure an insight is indeed an insight.

Fred Reichheld, the loyalty practice founder of global consulting firm Bain & Co., found that high growth companies spent approximately 20% of their leadership team’s meeting time discussing customer feedback. These firms were growing revenue more than twice as fast as other companies in the same sector because the slower growing firms spent almost no time proactively discussing customer feedback.

Involve All Employees – Particularly the Salespeople

Who are the winners? Those companies that obtain the most market intelligence and take action on that information. Consider the fastest-growing companies of this century—Google, Amazon, Facebook, Apple. Their business models are based on being able to gather and garner more input from customers than anybody else. They turn this input into insights that drive product development, offers, and advertising placement. It’s well known that consumers are guided by ratings and comments from “the crowd” more than large institutions. These companies know that their customers want to see what someone who has already bought a product or service thinks about their purchase. Customer ratings directly influence future sales.

Likewise, turn your organization into a customer and market intelligence machine. While this has traditionally been the purview of the sales team, it really comes alive when everyone in your organization becomes engaged in collecting, sharing, and acting on valuable intel. Appletree Answers provides call center services to its customers. The company built an app that worked with its CRM to collect suggestions from its frontline call-center people. As a result, each quarter, employees offer
3,000-5,000 ideas, and one of these ideas generated a $17,000-per-month profit idea for a client.

Customers hold the ideas that can drive your business growth. Successful Scale Ups have the processes that systematically collect, share, and implement these insights into growth and profit.

Be Sure to Close the Loop on Ideas

As with employee feedback, it is critical to close the loop on customer insights. Assign your middle management team to make sure these ideas come alive, and track progress in your weekly, monthly, and quarterly meetings. Of course, not every idea will be able to be implemented, so be sure to thank customers for their input and keep the conversation open. They will appreciate that they are being heard. Sometimes it’s not a matter of “if,” but “when” on the implementation.

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Rockefeller Habit #7 – Core Values and Purpose are “Alive” in the Organization

Core Values and Purpose are “Alive” in the Organization

7.1 Core Values are discovered, Purpose is articulated, and both are known by all employees.
7.2 All executives and middle managers refer back to the Core Values and Purpose when giving praise or reprimands.
7.3 HR processes and activities align with the Core Values and Purpose (hiring, orientation, appraisal, recognition, etc.).
7.4 Actions are identified and implemented each quarter to strengthen the Core Values and Purpose in the organization.

Developing Core Values That Make a Difference

Core Values constitute the small set of rules and boundaries that define what is truly and dearly important to the firm. They also define the company’s culture and personality, and essentially become the true operating system of the organization, functioning as both a guiding light and litmus test on which behaviors and decisions should and shouldn’t be permissible.

Discover the Right Words

When developing Core Values, be sure not to use just a generic list of clichés and platitudes that sound nice—like “integrity, passion, and excellence”—but do not actually reflect the uniqueness and power of your distinctive culture. There is absolutely nothing wrong with using words like integrity, passion, and excellence as the start of the development of Core Values, but instead of stopping at just the word, strive to develop a fully articulated Core Value statement that describes the desired behaviors that the Core Value should drive. Core Values are phrases, not single words. To be effective, Core Values need to be genuine statements that reflect the desired culture and behaviors in your organization.

Core Values are critical to get right. Best practice is to let them simmer in your organization for 6 months to a year before you carve them in stone. This will help management test their validity and edit the list with additions and subtractions.

Let us know if we can help you develop the right Core Values. Developing the wrong list will cause confusion in your organization and cause your best people to lose faith.

The Core Purpose

If Core Values are the soul of the Organization, then the Core Purpose (some organizations call it mission) is its heart. The Core Purpose answers the ageless question “Why do we do what we do?” A good Core Purpose should answer these four key questions:

  1. Why does what we do matter?
  2. What difference are we making in the world?
  3. Why would our customers or the world miss us if we weren’t around?
  4. What are we passionate about?

Unlike Core Values, the Core Purpose tends to be best articulated by a single word or idea. Here are some examples:

  • 3M: Innovation
  • Disney: Happiness
  • Wal-Mart: Robin Hood (Giving ordinary folks the chance to buy the same things as rich people)
  • Starbucks: A Third Place to Go and Relax

This central word or idea may be expanded into a phrase or two, but at its essence, it is best remembered as a single word or idea. To develop your core purpose, ask your team the question: “What do we do?” The answer may be “develop software” or “sell building products. It’s whatever your core offering is. Then use the Five Whys technique to drill deep into why you do what you do. As Verne Harnish instructs, “Keep asking until you get your version of “save the world,” and then back up one step.

Your Core Purpose must transcend making money. There are plenty of other sections on the One Page Plan to account for this! Without a Core Purpose, a business has no direction. Think of it as your firm’s North Star or Southern Cross. A sincere Core Purpose engages the hearts as well of the heads of your team. And research shows that when you achieve this, your employees will give you 40% more discretionary effort.

Bringing the Core Alive Every Day

Average firms develop Core Values and a Core Purpose only to have them forgotten or relegated to obscure posters on a wall. Most of their employees struggle to recite even a few of them. On the other hand, elite Scaling Up companies discuss and live their Core Values and Core Purpose daily. Employees at these firms can recite their values and purpose, and even more importantly, they value what they mean and implement them into their everyday decisions.

Best practice is to discuss a specific Core Value or the Core Purpose as part of your weekly or monthly meeting. Break it apart and assess how you are doing on it. Test your management decisions against the criteria of these Values and Purpose. Many firms also successfully keep their values alive by awarding a Core Values winner monthly.

Use the Core in HR Decisions

Aligned to the points just made above, the best companies use the Core in critical HR decisions. True high performers (A Players) have great results, and their behaviors model your Core Values and Purpose. If in your performance evaluations, you are not appraising your employees by how they abide by each Core Value and your Purpose, then this is a great opportunity to build a much richer and deeper alignment with your employees in their leadership and character development.

In hiring decisions, bringing the Core alive is absolutely critical. Hiring is too often an expedient process. Take the time to evaluate your candidates against your Values and Purpose. If your Core Purpose happens to be, for example, “passion,” then you better validate that your candidates are in fact highly passionate! I have a client who had interviewed a top seller from a major competitor. Through the [Topgrading] interview, we confirmed two things:

  1. The candidate was indeed a top seller.
  2. The candidate was a raving jerk.

The V.P. of Sales at the time was desperate for a top performer, and was lobbying for hiring this person anyway. They were about ready to make a bad decision when I walked up to the Core Values that were displayed on the wall and tapped on them asking how well the firm would be living its values if they went ahead with the hire. The COO realized the hypocrisy and vetoed the decision. After the fact, by all industry accounts, they avoided a disaster by sticking to their Core.

Exercise to Strengthen Your Core

Just like successful athletes put an extreme focus on exercising their core or midsection to provide power, stability, and endurance, a successful Scaling Up company needs to plan specific actions as part of its quarterly planning to strengthen its Core Values and Purpose. A unique feature of the One Page Strategic Plan is it is designed like a Sudoku puzzle. There is a specific place in column two of the One Page Strategic Plan which is enveloped by the Core Values, Core Purpose, BHAG®, and Profit/X to develop systemic actions to ensure the Core remains healthy and alive. Planning these actions on a quarterly basis is a unique attribute of the Scaling Up methodology that will fortify and differentiate your business from your competition.

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Rockefeller Habit #8 – Your Entire Team Can Articulate Your Strategy

Employees can articulate the key components of the company’s strategy accurately

8.1 Big Hairy Audacious Goal (BHAG®) – Progress is tracked and visible.
8.2 Core Customer(s) – Their profile in 25 words or less.
8.3 3 Brand Promises – And the corresponding Brand Promise KPIs reported on weekly.
8.4 Elevator Pitch – A compelling response to the question “What does your company do?”

Are you tired of doing strategic planning that is an arduous process that culminates in a 3-inch binder that ultimately collects dust and remains unopened on a shelf? If so, you are not alone as this is the fate of traditional strategic planning processes. It’s largely an academic exercise with very little engagement of the entire team and very little execution of the plan.

Conversely one of the big advantages of the One Page Strategic Plan is its elegance and simplicity. It is meant to be shared and cascaded to everyone in the organization in order to drive alignment and execution. Literally, it gets everyone on the same page!

The BHAG®

The BHAG® – The Big Hairy Audacious Goal was introduced by Jim Collins and Jerry Porras in their seminal book Built to Last. It’s the ultimate 10–25 year goal for your company. It must be exciting to your team, and it must also be a stretch. There should be some chance you don’t hit it. Unlike many sloppy strategic goals, the BHAG is deliberately aligned at the center of your Core Purpose (what you are passionate about), Core Competencies (what you can be best in the world at), and Profit/X (what drives your economic engine). This forms what Collins terms the Hedgehog Concept—thus named because of the hedgehog’s elegantly simple strategic move of rolling up into a ball for defense.

One crucial element of the BHAG is it should be measured in the same units of X as your economic engine, Profit/X. For instance, Southwest Airlines revolutionized the airline industry with its Profit/X of profit per plane, which was radically different than its competitors’ profit per air mile. In turn, Southwest’s BHAG is aligned with the number of planes in service.

Customers – Who Is Your Juicy Core?

For some reason, adding the adjective “juicy” in front of the definition for your core customer really brings the concept to life. This is because your customer description needs to transcend the typical uninformed “50 % male/50% female” demographic description that most firms use. To tap into the customer niches that, say, are less than 10% of the industry but hold a disproportionate amount of the profit (~ 25%), you need to be crystal clear as to how these customers think and act psychographically.

Once you know how they think, what they care about, and how they act, it becomes much easier to identify and find them. Build descriptive personas of 25 words or less around your juicy core customers to bring them to life.

Brand Promises and KPIs (Kept Promise Indicators!)

The Brand Promises boil down to why a customer should buy from you versus a competitor. Best practice is to develop a lead brand promise, with two more supporting brand promises. For Scaling Up client BuildDirect.com, their lead Brand Promise is “Best Price,” and their two supporting Brand Promises are “Best Customer Service” and “Product Expertise.”

Of course, a promise is worthless if you don’t keep it. That is why you need Brand Promise KPIs (Kept Promise Indicators) measured on a daily basis to ensure you are meeting your promises. A Brand Promise is essentially a guarantee. When a promise is not met, you want to build in what Jim Collins calls a “catalytic mechanism” to make fulfillment of the guarantee so painful, it unleashes internal catalytic mechanisms to ensure broken promises rarely happen. Scaling Up client Tecstone Granite, a leading supplier of etched monuments, has a Brand Promise that says “The order is 100% correct or it’s free.” As a result, very few monuments go out incorrectly!

Elevator Pitch – Every Employee Knows Why Your Company Is Special

While I am not a fan of “elevator pitches” as a sales technique (because they are about you, not the customer), they do allow every employee in your organization to articulate the company strategy and explain why the company is special. If every team member can’t speak to the elements of the strategic plan and what differentiates your company and makes it unique, then you need to work on your team’s alignment and strategic planning process. Let us know if we can help you get results in this critical area.

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Rockefeller Habit #9 – KPIs for Everyone

All employees can answer quantitatively whether they had a good day or week

9.1 1 or 2 Key Performance Indicators (KPIs) are reported on weekly for each role/person.
9.2 Each employee has 1 Critical Number that aligns with the company’s Critical Number for the quarter (clear line of sight).
9.3 Each individual/team has 3-5 Quarterly Priorities/Rocks that align with those of the company.
9.4 All executives and middle managers have a coach (or peer coach) holding them accountable to behavior changes.

Can all of your employees answer if your business had a good day or week? Can they answer the same question for themselves on an individual basis?

Did I Have a Great Day or Week?

Your business should have 3-5 measurable company goals. All employees in the business should have the same goals with 1-2 individual KPIs (in this case Key Performance Indicators) that map into the company goals based on their individual roles. The goals and KPIs ensure that every employee is in line with the strategy, vision and goals of the business. The key is that the individuals take ownership and report on these KPIs each week. Imagine what would happen to the results of your business if everyone knew how they were doing on an individual basis and what they needed to do to affect the outcomes!

Aligned Personal Critical Numbers

We discussed the importance of the Critical Number in Rockefeller Habit #2. To drive personal line of sight, each employee must have an individual Critical Number that aligns and is linked to the company’s Critical Number.

Rocks for Everyone Drive Exponential Results

Just like the company has a handful of 3-5 rocks to support the Critical Number, all employees or teams need to have the same to support theirs. This drives exponential growth. For example, if you have 30 employees, you are in a position to get 90-150 more things accomplished each quarter!

To Achieve Peak Performance, Everyone Needs a Coach

Can you think of an elite athlete or team that has ever achieved peak performance without a coach? As executives, we never hold ourselves accountable enough for results. Also, while many executives and managers fashion themselves as good coaches, the evidence shows that they are not as skilled in improving employee performance and behavioral changes as they think they are.

Coaching is widely recognized today as the highest form of leadership. In the groundbreaking book Trillion Dollar Coach, former Google CEO Eric Schmidt details the executive development, personal growth, and team alignment that executive coach Bill Campbell drove throughout the entire senior executive team:

“EVERY SPORTS TEAM NEEDS A COACH, AND THE BEST COACHES MAKE GOOD TEAMS GREAT. THE SAME GOES IN BUSINESS: ANY COMPANY THAT WANTS TO SUCCEED IN A TIME WHERE TECHNOLOGY HAS SUFFUSED EVERY INDUSTRY AND MOST ASPECTS OF CONSUMER LIFE, WHERE SPEED AND INNOVATION ARE PARAMOUNT, MUST HAVE TEAM COACHING AS PART OF ITS CULTURE. COACHING IS THE BEST WAY TO MOLD EFFECTIVE PEOPLE INTO EFFECTIVE TEAMS.”

It is vital that every executive and middle manager has a coach (or peer coach) who holds them accountable for behavioral changes. We strongly encourage companies to get an external coach who is skilled at working with senior executive teams (ideally a Scaling Up Certified Coach) to lead the annual and quarterly planning sessions, and to work monthly with the CEO and the CEO’s team.

Rockefeller Habit #10 – Scoreboards Everywhere

The company’s plans and performance are visible to everyone

10.1 A “situation room” is established for weekly meetings (physical or virtual).
10.2 Core Values, Purpose, and Priorities are posted throughout the company.
10.3 Scoreboards are up everywhere displaying current progress on KPIs and Critical Numbers.
10.4 There is a system in place for tracking and managing the cascading Priorities and KPIs.

A Situation Room Plastered With Metrics and Data

Is the conference room where you make your critical decisions sterile, or is it bristling and buzzing with goals, metrics, and data that drive the pulse of faster, better decisions? At Scaling Up, we recommend that you outfit your conference room much like the White House Situation Room with your One Page Strategic Plan, and key metrics and KPIs shown as trend lines measuring progress. My personal preference is multiple large monitors that allow the sharing of critical data on a vibrant real-time basis.

Core Values, Purpose, and Priorities Are Posted Throughout the Company

At a company practicing the Rockefeller Habits, the Core Values, Core Purpose, and priorities are alive. So make sure they are posted throughout the company. Since all of your employees are versed in them, they serve as a useful reminder to drive both behaviors and critical decisions. They also serve as a useful alignment tool for customers, job candidates, and suppliers who are visiting.

Scoreboards Everywhere

In addition to the Core Values, Core Purpose, and other elements of culture that are displayed throughout your company, your key metrics and KPIs should be visible everywhere. Many times, less is more. So create simple, compelling scoreboards that let every employee know how the business is doing with a quick glance. Departments should also display their own unique KPIs to drive insights and accountability.

Strategic Execution Platforms

During former CEO Alan Mulally’s successful tenure at Ford Motor Company, he conducted a weekly 2½ hour business plan review with his fifteen top executives. He used color coded charts— green, yellow, or red—to indicate progress, caution, or problems with the execution of the plan. As he said: “You can’t manage a secret. When you do this every week, you can’t hide.”

It is important to have a system in place to develop, manage, and track the plan, and assess progress on priorities in real time. While you can get started in the Scaling Up methodology with downloadable files and Excel spreadsheets, per Mulally’s comments above, it is hard to manage the invisible. In other words, it can become a challenge to extract data from executives without an automated system.

Our clients use an online strategic planning and execution platform, and they conduct their annual, quarterly, monthly, weekly, and daily management meetings right in this platform. This provides far more visibility, accountability, and transparency into each executive’s actions. CEOs, as well as all team members, can instantly see within seconds where the status of each quarterly priority is. No more having to wait for meetings, extract reports, or guess the status of strategic priorities and execution. Executive coaching sessions as well as 1-2-1 meetings with your managers are also done within the platform. A Certified Scaling Up coach can give you guidance on the advantages of using a strategic execution platform. In conjunction with the Rockefeller Habits and proven Scaling Up Growth Tools, it will literally transform your business into one that is more accountable, profitable, and easier to run.