PDF Summary:12 Habits of Valuable Employees, by Verne Harnish and Kevin Daum

Most employees do just enough to meet their job requirements, but some go further—they create exceptional value for their organizations. In 12 Habits of Valuable Employees, Verne Harnish and Kevin Daum explain the difference between adequate employees and high-value ones, and they outline how you can become the latter.

You'll learn how to understand your company's business cycles and interconnected systems, how to identify and fix inefficiencies that limit growth, and how to develop scalable processes that improve over time. Harnish and Daum also discuss ways to cultivate a value-driven culture by aligning company principles with daily work, developing leadership skills across the organization, and building systems that encourage knowledge sharing and continuous improvement.

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Next, we’ll explain how to implement value-driven methods and practices, and ways to cultivate a value-centric culture and leadership.

Implementing Value-Driven Systems & Processes

Harnish and Daum suggest that to implement value-driven systems and processes, you should define explicit metrics for every process. Methods are usually evaluated based on three criteria: cost, timing, and quality. Discover the metrics related to every process you handle at work, and determine how you contribute to each one.

(Shortform note: In The Tyranny of Metrics, Jerry Z. Muller argues that in some cases, defining explicit metrics for every process can be counterproductive. He explains that in highly creative or exploratory work, metrics can incentivize people to game the numbers rather than create genuine value. For example, if you measure a process by cost, timing, and quality, people may focus on short-term box-ticking rather than long-term value creation.)

They also recommend creating scalable procedures that can be educated on, assessed, and refined. Scalable methods are replicable, efficient, and can be improved over time. They guarantee the group is effective even without everyone present. They also recommend that employees consider all aspects in terms of potential future enhancements. Evaluate each process from a perspective that's sustainable and adaptable for the future. Create standards that promote efficiency and effectiveness, and synchronize your methods with the organization’s.

(Shortform note: While scalable procedures and standards can improve efficiency, they can also create problems. In The Tyranny of Metrics, Jerry Z. Muller argues that when performance is judged by a limited set of quantitative metrics, and rewards or punishments are tied to those numbers, people will concentrate on meeting the targets rather than exercising their best judgment, often gaming the system in ways that damage the underlying mission.)

Cultivating a Value-Centric Culture & Leadership

To cultivate a value-centric culture and leadership, Harnish and Daum recommend embedding fundamental principles and mission in your company's systems and protocols. Although numerous organizations tout their guiding principles and mission, not many successfully embed them. For fundamental values to be advantageous, employees must grasp the specific conduct the company desires. The surest way to recruit and keep workers who embody your principles and purpose is to align these with their responsibilities. Make these principles and mission meaningful by developing role descriptions and evaluations grounded in them.

Counterpoint: Fewer Rules, More Freedom

In No Rules Rules, Netflix co-founder Reed Hastings and business professor Erin Meyer argue that embedding fundamental principles and mission into systems and protocols can blunt their power. They contend that as companies grow, they often add more rules, processes, and controls, which can stifle innovation and employee autonomy. Instead, they advocate for a few clear values and wide employee freedom. This approach, they argue, allows high-performing employees to use their judgment rather than being constrained by detailed policies and tightly prescribed procedures.

Next, we’ll discuss ways to foster individual value and growth, as well as building value-driven organizational systems.

Fostering Individual Value & Growth

Harnish with Daum suggests that employers should support employees in developing leadership skills. This creates a pipeline of future leaders, reducing the need to recruit and train new leaders externally. Employers can do this by sharing their own approaches to leadership, creating peer learning programs, and allocating resources and funding to develop leadership.

(Shortform note: While this advice is directed at employers, you can use it to create a personal leadership development plan. Consider your current job as a laboratory for leadership development. Each week, try one new leadership behavior, such as giving more positive feedback or delegating more tasks. Then, reflect on what worked and what didn’t.)

Building Value-Driven Organizational Systems

Harnish and Daum argue that you should create systems that encourage information sharing and process improvement. People collectively are greater than individually when information flows continuously. Employees who find more efficient methods to complete tasks should create resources like guides and lists for their colleagues. This enables both existing and incoming employees to improve their performance, which simplifies your own work as well.

To enable this, offer the means in terms of infrastructure, technology, and time for employees from every department to share their knowledge throughout the organization. Put resources into technology that lets your employees easily share and access information. Back it up with planning, methodology, and instruction so it's more than just a packed storage area of pointless information.

Why Information Sharing Is Important

These systems make people collectively greater than individually because they reduce the time people spend searching for answers. This frees up their attention to solve more difficult problems. For example, imagine you’re a new employee at a company. You’re trying to figure out how to use a particular piece of software, but you can’t find any documentation on it. You spend hours searching through old emails, asking colleagues, and trying to piece together how it works. This is time that could have been spent on more important tasks, like developing new features or fixing bugs. If the company had a system in place for sharing information, you could have found the documentation you needed in minutes.