Rather than wandering in the dark, trying to build a business from scratch and best guesses, follow the blueprint of the titans like John D. Rockefeller and learn the Rockefeller Habits.
After the oil industry moved from a start-up industry to a scale up industry, it was John D. Rockefeller that brought a disciplined approach to growing his enterprise including capturing a 100X advantage that CATAPULTED him past his competition who were still following a helter-skelter approach to business.
Mastering the Rockefeller Habits focused around 4 key components of business growth.
Mastering the Rockefeller Habits
The Three Barriers to Growth Every Company FacesIn the U.S. alone, there are roughly 28 million “firms”. Or companies. Out of these 28 million firms, less than 4% ever grow past $1mm in annual sales. And out of these firms, less than 10% grow past $10mm in annual sales. And ultimately, under 17,000 companies pass $50mm in annual sales. Along the path of scaling up or growing up your company, you’re likely to encounter three major barriers.
- Leadership Development The timeless adage, “as goes the leadership team, goes the company” is 100% accurate. Your company can only grow as fast as you, the CEO and the leadership team. The fact is, as the firm scales your managers must shift their focus from managing to coaching their people. Along with that, mastering the abilities of delegation and prediction from a financial perspective. The fact is; leadership development is never ending. As my Mom loved to tell me, you’ll be done learning when you’re dead.
- Scalable Infrastructure As you grow your firm from 20 to 50 employees, you may not only outgrow your office space, but you’re going to need software that can keep up with managing the day to day also. The infrastructure of your company includes the tangibles like office space, software, and equipment. It also includes the intangibles.Consider the additional complexity in communication that doubling your employee count adds, it’s literally an exponential increase in complexity each person that’s added. To deal with this, you need specific communication rhythms for everyone in the company to keep them aligned and on the same page.
- Marketing Effectiveness Warren Buffett loves to say, that “Mr Market” is your 3/5ths partner. Well, the market can either make you like brilliant or incompetent really fast. When things are going your way, it covers a whole lot of mistakes. When things reverse, many entrepreneurs get exposed. (Just think back to the financial crisis of 2008 & it’s lasting impacts).To keep growing your company, it’s critical that the CEO & Senior Leadership team have a pulse on what’s happening in the marketplace. New competitors are showing up every day, strategic advantages are constantly being copied by competitors, and customers needs are shifting with new technology. Your strategy and marketing must be ready to keep up.A key benefit of the Rockefeller Habits once implemented, is they will reduce the senior leadership teams time to manage by up to 80%, so you can spend more time on market facing activities.
- Priorities If everything is a priority, then nothing is! As your company grows, it becomes more critical to keep everyone in the company focused around the same handful of things, 5 to be exact. There’s a tipping point around 25 employees that as founder or CEO you can no longer interact with revenue on a day to day basis and keep them aligned, so we have to rely on priorities to do that.The key here is 5 company priorities for the year, then the quarter, focused on the organization. From there, have the priorities cascade throughout the company so that every member of the team is helping carry the load to execute on the 5 company priorities.
- Data At that critical 25 employee mark, maybe earlier, it becomes nearly impossible anymore to manage by “gut”. We have to leverage data or KPIs to help manage the company more effectively. The key here is, everyone has 3 to 5 numbers they report on in the weekly meeting that tell them but also their direct supervisor if they had a good day/week.The other side of this is mastering the ability to project and predict the future with dialed in KPIs. How will we be doing as an organization in 6 to 10 weeks? What might we need to adjust so that we have a great week in spite of challenges ahead.
- Rhythm The meeting rhythms of an organization are the heartbeat of the business. They have to happen at the same day, time, and place every work day. Same agenda. Same people. Starting with the leadership team and cascading to the front lines. Having an aligned rhythm allows information to flow smoothly up and down the lines while issues get solved fast to keep the organization growing in a healthy way.