best book bids.com presents scaling up how a few companies make it and why the rest owned by Bernie Hunnish it's been over a decade since Bernie Hunnish his best-selling book mastering the Rockefeller habits was first released scaling up Rockefeller habits 2.0 is the first major revision of this business classic which details practical tools and techniques for building an industry dominating business this book is written so everyone from frontline employees to senior executives can get aligned in contributing to the growth of a firm scaling up focuses on the four major decision areas every company must get
right people strategy execution and cash this book includes a series of the new one-page tools including the updated one-page strategic plan and the Rockefeller habits checklist TM which more than 40,000 firms around the globe have used to scale their business companies successfully many to 10 million 100 million and a billion and beyond while enjoying the climb the written audio summary can be found on our website best book bits comm so without further ado I bring the book summary of scaling-up book summary what's in it for me discover the secret of successfully scaling your business every
year a sea of new companies are born around the world most fail within a few years some make it a bit longer only a small number of them at grow to become big successful game changes why even if you have a great product and your business is going well scaling poses important and often unexpected challenges to any company that wants to grow it's a paradox getting bigger should make things easier shouldn't it war brains more cash more momentum wrong as his book summary will show even some time thing as simple as leaving the old pokey
one for offers for a new to for one might have unexpected consequences for your business so how do you get it right this book summary breaks down everything you need to take into consideration into structure checklist and thought provoking processes in his book summary you'll learn why growth doesn't inevitably lead to success while owning the right words will help you scale your business and what cash is still king summary part 1 meet the 40s that can a company double your cash flow triple profitability and increase value tenfold imagine you're an executive manager at a 500
employee company your CEO had just inform you that by the end of next year the company will comprise over 1500 employees what would you do first when your company's going up there's certainly I want to consider if you don't want to run out of cash or lose track of strategic decisions your organization structure and decision-making processes has to be brought to perfection that's wide Casals team a global executive coaching company developed a 4d framework to grow your business successfully so what are the essentials for T's for successful scaling first you and your team have to
be drivers of personal and economic growth think of it this way your managers are coaches one on one coaching is essential for employees to stay focused and motivated consider offering additional training to enable constant learning secondly leaders also have to find the balance between the demands of your stakeholders and those are the actual processes doing your work even though your company processes must be profitable it's also important to keep your reputation with your stakeholders in mind balanced both by creating a custom tailored strategy to execute your strategy successfully you'll need to implement routines to enable
sufficient discipline the third T your entire company must be aware of the number-one priority for each quarter or year the first element of discipline with a defined target in mind you'll be able to prioritize effectively another aspect of discipline is regular meeting routine complemented where that constant down a review this way you'll be able to detect problems immediately and tackle them as quickly as possible finally it's essential that you know which questions are the most pressing ones and start making decisions when scaling up a company should start by tackling the biggest issues first then working
through other problems in the same way you might fill out a Sudoku puzzle start while you can and proceed carefully so the 40s our drivers demands discipline and decisions growth is very complex and there are loads of things to keep in mind but don't despair the following book summaries offers a framework for dealing with the four major problem areas that are also opportunities took her other 40s people strategy execution and cashflow summary part two companies must enhance their personal management in tandem with their growth only two to three percent of all US companies will become
high-impact firms that lasts for over 25 years and contribute substantially to overall economic growth why are you so if you make it to this stage it's all about people the truth is that growth doesn't always lead to success in the long term if the team the strategy in the organization and the physical infrastructure don't grow alongside each other success simply won't last this is called the growth paradox you think that the larger a company gets and the more sadly it's routine is established the easier things get the reality is that the more employees you have
the more it takes to organize them effectively consider a company that is expanding its team while also moving from one for office into a two for office if planners don't create room for communication spaces such as a common kitchen or break room if we much harder for information to flow between employees communication is vital in any growing organization so it's essential that you structure your teams and sub teams to keep information flowing if teams are too big communication will be hindered instead try breaking up them into sub teams of seven to ten people so if
you're feeling stuck in your growth process it's likely that your team structure and size isn't perfectly organized yet but remember growth doesn't happen overnight if you want your success to be long-term you'll have to view expansion as a long-term process to ask yourself what do you want your organization to achieve within the next 25 years it took Apple 25 years to grow to 9600 employees in 2001 where today 14 years later the company employs more than a hundred and fifty thousand people summary part three make sure that the right people are doing the right things
and doing them correctly no executive team could ever declare that everyone was responsible for marketing without something going wrong we need clear responsibilities otherwise nobody can be held accountable and lack of accountability is a surefire way to drive a business to collapse in order to create accountability and make it visible the author has developed the function accountability chart FAC e and process accountability chart PACA the FAC e can be used to measure success and to find who is responsible for what to begin you'll need to find out about your company's functions write them all down
then let each of your executive team members fill in who is responsible for each function one person and what key performance indicators KPIs such as profit per project for example can be used to measure success after creating this chart consider which team members are responsible for more than one function but perhaps don't have clear accountability when the executive team of Perley Fullerton filled in the chart they recognized that there were six people in the room but only three on the chart it was clear that founders needed to delegate tasks more specifically the processes that drive
the business and the people who are responsible for them should also be specified enter the PA c e to use a PA c e first identify the key processes of your firm such as recruitment or product development keep one person oversight for each process next aunt line which kpi's such as time quality and cost measure the process next subscribe how you're going to improve each process perhaps by making it faster or more cost effective finally map who is involved in each process at each of its critical steps summary part 4 start motivating and make the
switch from managing to coach in it said that a single excellent employee can replace three good ones so invest in all your people to grow them start by replacing the word manager with coach the people analytics team at Google discover that personal coaching was the most important factor in great management this is because managing a team isn't just about delegating tasks and supervising processes it's also about leading the team and inspiring its members to grow and improve one way you can encourage your team members to boost their strengths and learn from their weaknesses is through
training in fact it's worth spending an additional two to three percent of your payroll on training your team will reward you with the highest productivity and loyalty The Container Store pays salespeople 50 to 100 percent more than the industry standard within the first year salespeople also got two hundred and sixty three hours of training you should also strive to make your team's job easier by listening to them regular meetings and our team members to discuss what motivates them what doesn't what could make their job easier and what resources they need even the smallest changes like
an additional break room or a different email provider can make a significant difference finally be sure to set clear expectations tell your employees what their top priorities should be but let them find out how to achieve it on their own encouraging team members to think for themselves is challenging but will strengthen their problem-solving abilities in the long run you could even modify tasks and responsibilities from time to time to give you employees the challenges you think they'll need for personal growth summary part 5 you'll need a strong strategic vision for strong scaling you'll be hard-pressed
to find a company with over 50 employees and a boss that can remember all their names as your organization grows larger it's vital that you retain the sense of purpose that keep small businesses so motivated but how it's a matter of strategy by establishing core values you give your organization comprehensible guidelines for every decision these are the norms of a company's culture and should be stated in succinct realistic sentence for example practice what we preach you should also make your company's mission clear by formulating a core purpose this can be as brief as one word
and should simply signify what you want to achieve for Disney the core purpose is simply happiness so how can you get your organization to engage with core values and purpose with confidence credit card transactions company VeriFone it came up with a clever solution to keep their corporate culture strong its founder created a pocket-sized Blue Book that contained all the organization's core values illustrated with real case studies this blue book was translated into eight languages and he's a fixture in every meeting as a powerful and accessible summary of the company's vision your company's vision summary should
also include two other elements your brand promises and your big hairy audacious goal BH AG for short brand promises the things you guarantee your customers are strong in threes with one key promise at the forefront for example build direct promises best price then best customer service and product expertise by reference you have three brand promises during decision-making you can ensure your actions satisfy customers expectations your bhag should be reached within 20 to 25 years to make it easier set smaller goals every three to five years as well as annual monthly and weekly goals in fact
you could even visualize your goals as a mountain climb where you reach small plateaus before achieving that view from the top by colliding your core values purpose brand promises and goals you'll have gained a helpful tool that you can always refer to when dealing with potential customers suppliers or tricky situations by making copies of your vision summary available in common areas your team will be able to make the most of this tool to summary part 6 use your company's strengths to improve your revenue now that your vision summary is ready you've got the bones of
a quiz strategy if you want to reach your goals even more quickly you should understand exactly where your organization's strengths lie first you need to walk into your customers minds what do they think when they hear your company's name car manufacturer Volvo has used marketing to make the word safety one of the first associations with the brand even Google means safest car will lead directly to Volvo 87% of all customers search the internet to find options for purchasing to find out which words you should own use the google adword planner to see how often some
words are being searched in relation to your brand the next place to look for your strengths is your X Factor this is a small strategic detail that differentiates you from your competitors by recognizing it you can turn it into your competitive advantage to multiply your revenue take Outback Steakhouse they recognize that the most restaurant managers are constantly on the move to new jobs so quality isn't stable so decided to create their own X Factor Outback Steakhouse created a new compensation for future managers who first had to invest twenty five thousand dollars of their own money
for three years they were trained to run a restaurant and got a competitive wage following this managers could run their own restaurant and they met milestone criteria after two years were rewarded with a hundred thousand dollar bonus by taking the time to create a calculated strategy and back steakhouse created an X Factor that made planning easier and boosted their products quality to give their customer experience and edge over competitors summary part 7 design a strategic plan to keep everyone on the same page the one-page strategic plan o PSP is a framework that will help your
company visualize and achieve your goals more than 40,000 companies use o-p-s P's to know if everything is running smoothly or not and then to respond rapidly to new challenges there are a number of questions you'll need to answer when designing your own o PSP who is responsible for each step what is the number one priority for the next year which metrics can be used to track your progress towards it suppose your goal was to make HR more efficient actions could include horan and additional HR manager or improving the onboarding process now that's your critical number
may be reducing hiring and onboarding process time from 6 to 3 months an executive checklist life the Rockefeller habits checklist is often extremely helpful this list summarizes all important factors you'll need to keep an eye on from the team is healthy and aligned to the company's plans and performances are visible to everyone this way you'll be able to recognize any missteps or potential issues a whole lot faster and your opie SP isn't just about your goals rewards need to be clearly stated to think about it working hard only makes sense when you know what you're
working for so why not make your annual monthly or weekly goals a fun challenge you dream up a theme to turn your goals into a game for example if your goal is to speed up processes you could call the project the fast and the furious you could even design a scoreboard where the whole team can see their achievements and write down how they're going to sell right summary part 8 focus on executing your plan with a steady rhythm of meetings and reviews great firms are like a great a jazz bands even without a strict plan
they're able to work together with confidence but like members of a band your team members should know their parts and practice together too that's why meetings are so important a steady medium routine allows information to flow accurately and prevents communication barriers so stay on top of current activities and issues hold your team meetings daily or weekly john d rockefeller met every day for lunch with his key people your executive managers should also participate in one day of learning every month and a bigger strategic meeting off-site in every quarter even spent in just five minutes every
day with your team could help solve small dilemmas much faster in managing up how to forge an effective relationship with those above you roseann batter vas key says that meeting needed to take up more than 10% of a standard work week for senior leaders and 5 to 7 percent for middle managers however the faster you're growing the denser your meeting rhythm should be if you grow in between 10 to 200 percent a year treat one quarter as every year and organized meetings accordingly another way to keep tabs consistently is by gathering Donna quantitative and qualitative
Donna will strengthen your decision-making in every scenario additionally ensure everyone in your company knows her KPIs and the team's critical number only then they can measure their daily performance if Donna shows a gap between goals and performance asked what the current barriers are and tackle them customer feedback is just as important as financial feedback so don't forget to speak with your clients to see if they're facing problems with your team the more closely you observed your data the faster you can respond to difficulties summary part 9 a growing company needs the cash flow to feed
it we all like to save up for something big but this is so often made tricky as we don't know how much we need to spend each month financial statements are evenly collected entirely by some firms though funds are of course central to expansion it's essential to understand how cash through your company and to have some cash reserves in great by choice Jim Collins and Morton T Hanson reveal that outstanding companies have three to ten times more cash and reserve than their me mediocre competitors if you want to expand your cash reserves take a look
at your cash conversion cycle CCC this figure shows how long it takes until a dollar you invest comes back as turnover remember the shorter the better take Dell who were going broke in the mid-1990s it found out that its CCC was 63 days that's simply too long so Tom murdered the new CFO work to reduce it within just 10 years of CCC had shrunk to 21 days at this point down finally grew faster and began producing cash instead of consuming in 2013 a founder Michael Dell finally had enough cash to privatize the company to shorten
your CCC first break it down into four components sales delivery billion slash payment and production slash inventory and work separately on them in each of these components you'll find opportunities to shorten your cycle time reduce typical mistakes or improve the business model for example Benetton India found that they were spending too much on production cost which in turn extended their CCC to solve the problem they improved their business model by for finding cheaper supplies by using software that allowed vendors and suppliers to bid on production contracts summary part 10 calculate which small changes could take
your cash flow to the next level perhaps you've looked at your CCC and seen that you need to improve your cash flow not to worry it's just a matter of tweaking here and there examine your company's sectors and you'll find several financial levers that you can modify to boost your cash flow it could be the price for your goods could be increased your inventory you could reduce the stock or accounts payable slow down the payment of creditors but how do you know which levers are worth changing with the power of one you can work out
which factor can reduce cost in the most efficient way in this method you attempt to visualize how a 1% one-day change of each of your potential levers would affect your cash flow for example you could calculate the effect of reducing your operating cost by 1% or reducing stock days by one day then do the same for another lever and so on by comparing this information you'll find the most financially efficient lever finally present your plan for change in a formalized structure of KPIs and targets and assigned tasks and responsibilities clearly in review scaling up book
summary the key messages in this book growth is complex but with the right tools your company can scale powerfully by tracking X existing processes and examining your cash flow you can target what needs to be tweaked with succinct long term plans and clear vision summaries you'll make your goals achievable while motivational management and regular communication will keep your team on track action will advice keep communication flowing your company is scaling up but you're facing communication hurdles and misunderstandings over priorities start building your meetings rhythm begin with the daily session of no longer than 15 minutes
to allow your executive team to focus on day to day topics next let your executive team do the same with their respective teams so that the meeting structure cascades through the company this will help your employees grass short-term and long-term targets and how to work towards them suggested further readings exponential organizations both Salim Ismail Michael S Malone and Yerevan jeast exponential organizations offer an expert look into this new critical form of company organization that the authors contend will soon become an industry standard you weren't exactly what an exponential organization or XO is and how you
can build your own companies like uber and airbnb are some top examples of exponential organizations if your company wants to survive you've got to adapt and that's a wrap on the book summary of scaling up by Bernie Anish check out a YouTube channel with over 500 video book summaries up worded previously like the video comment on what you think any there's a book you want still summary on comment below also check out our website best book bits calm where you'll find over 500 written book summaries where you can read and download in the PDF to
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