Book SummaryScaling Up, by Verne Harnish

1-Page Summary1-Page Book Summary of Scaling Up

Expanding your business is always going to present significant challenges. In Scaling Up, Verne Harnish explores what it takes to lead a company through the growth process.

Often, growth entails entering an entirely new market space, expanding a firm’s physical footprint, achieving new market share, and multiplying many times over the number of employees on payroll. All successful scaling up efforts, Harnish writes, are guided by an ultimate vision of where the company needs to go and a multi-year strategy that outlines the processes, people, and benchmarks it will take to get there.

Harnish is the founder and CEO of Scaling Up, a global executive education and coaching company with a presence across six continents. Through educational seminars and executive summits he hosts all over the world, he has taught thousands of executives how to lead and grow successful companies for over three decades.

This guide explores Harnish’s main ideas about how to successfully guide your company through the growth process. We’ve consolidated and streamlined some of Harnish’s arguments and put them into more easy-to-understand language (the original book has a tendency to veer into business jargon and/or specific proprietary terms used by Harnish’s company that can be hard to understand). We’ve also supplemented his ideas with outside commentary and more up-to-date information.

Overview

Harnish argues that there are several crucial elements to successfully guiding your business as it grows from a small company or sole proprietorship into a leading firm in your industry:

• Articulating a clear vision of where you want your company to be at the end of the growth process—guided by values that clearly signal to employees and customers who your company is and what it does
• Crafting the right long-term, multiyear strategy that can bring that vision to life, set the company on a path to profitability, and keep your team focused through the short-term growing pains
• Building the right structure and oversight to promote accountability and follow through—while maintaining flexibility to ensure that your growth strategy can adapt to changing market conditions
• Putting the right people in place, hiring and promoting based on accomplishments (not just longevity) and seeking out people who fit in with your culture of growth and change
• Guiding implementation by establishing key performance indicators (KPIs), accountability measures, and processes to ensure a healthy cash flow

Comparing Scaling Up and The Rockefeller Habits

Harnish’s steps in Scaling Up are based on an earlier framework called the Rockefeller Habits, which he’d also championed in previous works. Harnish presents the ideas in Scaling Up as a “2.0” version of the Rockefeller Habits, with additional practical and updated advice to deal with 21st-century business growth challenges—for instance, attracting talent in the modern era.

The Rockefeller Habits are based on the business principles that guided the career of John D. Rockefeller, the Standard Oil business magnate who is widely considered to be the wealthiest private individual in recorded history.

The Rockefeller Habits and Scaling Up both emphasize first and foremost alignment of the executive team toward an ultimate goal (which others have termed the “Big Hairy Audacious Goal” or “BHAG"). From there, they stress effective communication between the members of the executive team that filters down to the rest of the company; clear assignment of responsibilities and functions to specific individuals; universal understanding and implementation of the company’s values and strategy at all levels; and continuous solicitation of feedback from employees and customers to refine the strategy over time and enable it to respond to new situations. However, Harnish notes, Scaling Up examines these points in more depth.

Articulate Your Vision

According to Harnish, scaling up requires the articulation of a grand vision, an idea about not just how much the company will do, but more deeply, what it primarily exists to do. Ultimately, a vision is about what ultimate “state” or identity the company aspires to achieve. Bringing this vision into focus and aligning all company activities toward its achievement is what a strategy is for.

For example, a furniture retailer might have a vision of being the nation’s largest, best-known, and most-trusted name for families looking to decorate the home of their dreams. Or an investment bank might have a vision of being the financial world’s leader in “green” investments.

Beyond just an “About Us'' section on your website, your vision is the “why” that should anchor every decision your company makes. And studies show that defining this vision makes a significant difference to your customers and employees. A survey conducted by EY and Harvard Business school found that, of 474 executives surveyed, 89% agreed that a company’s sense of purpose was an important contributor to employee satisfaction. However, fewer than half of the executives surveyed—46%—said that their business currently operates with a clear vision and sense of purpose.

Tim Ferriss, author of The 4-Hour Workweek, similarly argues that business growth has to be rooted in an ultimate purpose or vision. But, he adds, it must be specific for it to be useful. You have to envision some ultimate state you want your company to attain or position you want it to be in. Simply wanting to be “bigger” or more profitable doesn’t...

Shortform Exercise: Scale Up Your Business

Think about how you can take your business to the next level.

Can you articulate a 10-year vision for your business? Briefly describe what it is.

Shortform Exercise: Work Cross-Functionally

Think through how you work with others from different teams.

Have you ever been part of a cross-functional, cross-departmental, or any other team where you’ve had to work collaboratively with people who had different sets of knowledge and/or expertise from yours? Briefly describe the situation.