Scaling Up book (VHarnish)

some of this, so we always subtract AP from the other two figures when calculating working capital
requirements. Working capital items are measured in days, to represent your current trading terms and
requirements.
Because your working capital requires cash, banks will often calculate one additional working
capital ratio, known as working capital days. This ratio measures the total days’ worth of working
capital required by the business and is calculated as (AR + Inventory - AP)/sales x 100. Here are
Gary’s numbers:

Driver #3: Noncurrent Asset Management

Together, the key drivers measure the rest of a balance sheet’s performance. For the most part, the
results are propelled by success in actively managing and improving the measures identified in
drivers #1 and #2. Gary’s driver #3 results are shown to the right:

Driver #4: Cash Flow/Funding

Last, we look at your cash performance, something bankers and investors care most about. This driver
helps predict the likelihood that you’ll be able to pay them back! Gary’s results are at the right:

Marginal Cash Flow

Another useful measure of cash flow is marginal cash flow. This ratio calculates the amount of cash
retained by the business’s working capital machine and compares it to the amount of cash the business
produces at the gross margin level.

If we look at Gary’s business, we see that it produced a gross margin of $13 million out of the $42
million in revenue that the business achieved in 2013. We also see that the working capital percentage
of the business (Working capital/Revenue) is calculated as $17.4 million divided by $42 million.

The Problem: Growing Broke!

If we consider both ratios as cents from every dollar of revenue, we see that Gary’s business
produced a gross margin of 31 cents for every $1 of revenue. We also see that the business requires
41 cents of working capital for every $1 of revenue. This means that for every $1 of sales, the
business requires 10 cents more working capital than it actually produces in gross margin. In 60% of
businesses that we are called upon to diagnose, we observe a similar relationship between gross
margin and working capital.

As a result, every time that Gary sold $1 of product, he went backward in cash. This is what we
meant earlier when we said he was “growing broke.”

To fix this, Gary had a choice of two main strategies:

1. Increasing his gross margin.
2. Reducing his working capital.

If he didn’t make a change in the relationship between working capital and profitability, his company
was not going to survive. Gary’s bank was acutely aware of this problem. In 2013, Gary’s revenue
grew by $7 million; hence, the bank funded $700,000 of his cash problem. Given that the bank was
ceasing to provide further increases, Gary could not continue in this manner.

Our final cash-flow measure highlights in simple terms the key difference between profit and cash
flow.

Operating cash flow reflects the impact of movements in your working capital on your earnings
before interest, taxes, depreciation, and amortization (EBITDA) over a certain period. Bankers use
this measure to calculate your debt service capacity. You should be using it as your means to increase

cash for growth, distributions, and other advantages that a cashed-up business will provide.
The following table details the calculation:

As you can see from this table, while Gary’s management team was congratulating itself for producing
an EBITDA performance of $5.6 million in 2013, the business actually posted a cash flow loss before
depreciation ($1.1 million) of $4.3 million.
Gary’s bankers were not most concerned that cash-flow performance was poor. They were alarmed
by the fact that Gary’s team didn’t even know what was going on.
The underlying business was strong, and the cash-flow performance could be fixed with some minor
tweaks. To do this, we needed to work out what financial changes were possible. This is where what
we call “The Power of One” becomes a useful tool. But first, back to the bank.

The Bank

Through our analysis, we were able to highlight a number of points that were hurting the banking
relationship, to Gary’s surprise:

1. The bank had $2 in the business for every $1 invested by shareholders.
2. In Gary’s case, volume is detrimental to cash. The more Gary sold, the worse his cash got (his

gross margin percentage was 31%, while his working capital percentage was 41%).
3. Gary didn’t have the cash capacity to repay the bank. His operating cash was $1.2 million in

2013, and yet he still had tax of $1.2 million, his interest bill was $1.4 million, and he had also
purchased $1 million of fixed assets.
Perhaps Gary’s bankers aren’t the idiots he thought they were!

“Gary’s bankers aren’t the idiots he thought they were!”

The Power of One and the 7 Levers

Managers adjust the 4 drivers by tweaking the 7 main financial levers available to them to improve
cash and returns in the business:

1. Price: You can increase the price of your goods and services.
2. Volume: You can sell more units at the same price.
3. Cost of goods sold (COGS)/direct costs: You can reduce the price you pay for your raw

materials and direct labor.
4. Operating expenses: You can reduce your operating costs.
5. Accounts receivable: You can collect from your debtors faster.
6. Inventory/work in progress: You can reduce the amount of stock you have on hand.
7. Accounts payable: You can slow down the payment of creditors.
So that you can see how to make use of these tools, it’s helpful to understand the benefit to cash if
either a 1% or a one-day change is made to each of these levers. We call this “The Power of One.”
Once armed with this information, management can construct a plan that focuses the business on
achieving a particular cash or return outcome using key performance indicators (KPIs) around these 7
levers.
When we calculated Gary’s Power of One, we found the following results:

This table shows that if Gary were to improve every driver by 1% or one day, the positive impact on
cash flow would be more than $1 million, and EBIT would improve by more than $900,000. In
reality, improving all drivers isn’t feasible (at least, not simultaneously). This is where management

should start to set specific goals: combinations and increments of the 1% and one-day changes that
are actually achievable.
In Gary’s case, we set the following combination:

While the changes to profit were not large, the true value for the business came from the changes to
the working capital. If the business could reduce its debtors (AR) by 5 days and its inventory by 15
days, more than $1.7 million of additional cash would be available to the business to reduce its debt
and rebuild its relationship with the bank. Neither move was seen as a stretch. And overall, these
changes would reduce the negative cash from $3.3 million to just under $1 million, a substantial
improvement.
The next step was to turn these changes into a formal KPI structure against which the business could
measure its progress. The first two tables on Page 233 were constructed, with the right-hand columns
representing good, average, and bad results.
The ideal profile was constructed to guide management and provide a means for simple comparison
against actual results. Ranges were set so that Gary’s management was able to construct a monthly
results table, which demonstrated in simple colors how the company was doing in light of its KPIs
set.

Gary’s opening results are shown in tables 3 and 4.
By color-coding the results in green (for good), yellow (for average), or red (for bad), the team could
get a very quick visual assessment of its performance. The more results were green, the more cash the
business was producing. The more red and yellow we saw, the worse the cash performance.

Gary was told to roll out this program across all aspects of his business, so that everyone knew the
parameters for success and the progress the company was making. He focused his sales team on the
sales and gross margin results, since it had responsibility for product discounting. The buying team
looked for products that would enhance gross margins. The finance and HR units kept an eye on
operating expenses. Both the sales team and finance monitored AR. Meanwhile, the warehouse group
monitored and reduced stock, and finance focused on when the company paid creditors (AP).

Working together, with clear definitions of success, Gary’s team turned around the business cash flow
very quickly. The company has now moved to a much more favorable position with its bankers, who
were astounded by the business’s rapid turnaround and significant debt reductions. Today, Gary has a
standard reporting format that he uses to inform his board. It’s available at scalingup.com.
As mentioned in the beginning of this section, you can get by with decent People, Strategy, and

Execution, but not if you run out of Cash. All growth firms hit bumps in the road (or craters!). Having
sufficient cash is key to surviving another day. We hope the ideas, tools, and techniques covered in
this section help you through the rough times and fuel your good times as you scale up your business.

NEXT STEPS
5 Things to Do Now

Thank you for reading Scaling Up. To jump-start implementation and benefit immediately from the
ideas in this book, here are five things to do now:

1. Have your extended management team (and employees) read the book. This will give
everyone a common language and context for implementation. Then complete a complimentary 4
Decisions Assessment and decide which of the four elements — People, Strategy, Execution, or
Cash — to pursue first. Go to that section of the book, and focus on reading and implementing
the advice from one chapter per month for the next quarter. The assessment and bulk discounts
on books are available at scalingup.com.

2. Form a weekly “council.” In addition to organizing a weekly management meeting, assemble a
few key leaders to discuss strategies and the bigger opportunities and challenges facing the
company. Go to Pages 108-109 to review the details of this crucial weekly “talk time” routine.
Focus on completing the 7 Strata of Strategy worksheet; assembling a list of influencers; and
working through the 4Ps or 4Es of marketing.

3. Launch a Quarterly Theme. Choose a measurable goal that addresses some choke point in the
business (something keeping you awake at night), and focus the entire company on achieving it
in the next few weeks. There’s no need for a fancy theme if you’re short on time. Put up a
whiteboard in a common area of the company, and start tracking progress via the daily huddle.
Then host a celebration at the end. Pick a goal that’s challenging but doable, so the team tastes
success quickly.

4. Start the daily huddle. Begin by holding a daily huddle for the executive team. Then, when
these leaders are comfortable with the routine, let them implement it with their respective
teams, cascading this crucial communication rhythm down through the organization. Share
specifics, but don’t fall into the trap of problem-solving, and keep these initial huddles to 15
minutes or less.

5. Plan your first quarterly or annual offsite. Set the dates for your next strategic planning
session, and start preparing surveys of employees and customers. Also have middle
management complete a SWOT and have the top leadership team complete the SWT. Once at the
offsite, start filling in the boxes of the various one-page Growth Tools. Focus initially on the
basic decisions represented on the Vision Summary worksheet (Core Values, Purpose, Brand
Promises, BHAG®, and Priorities), and choose a couple of habits from the Rockefeller Habits
Checklist™ to implement next.

Most important, relax with the process. Thousands of companies have successfully implemented the
Rockefeller Habits.

One Step at a Time

Whatever you do, avoid doing everything all at once. Our 4D Framework is a process of working on
one aspect of the business at a time so no one gets overwhelmed. It generally takes two to three years
for all the tools, techniques, and habits to become part of the company’s DNA, and another two to
three years to truly master the use of them.

It is critical to pick someone to drive overall implementation of the Rockefeller Habits. For many
founders, it might be best to give this accountability to your #2 in command. Verne wrote a column
specifically for entrepreneurs on how to “Hire the Right #2.” Go to scalingup.com to download a
copy.

You’re Not Alone — Coaching, Learning, and Technology

To support and speed up your implementation of our tools and make the process more enjoyable,
we’ve built a team on six continents offering a variety of services, including:

Coaching: No one has ever achieved peak performance without a coach. If you need help
implementing these tools, we can give you access to our elite team of certified coaching partners
spanning the globe. Utilizing a coach fast-tracks implementation and takes a load off the
leadership team, so you’re generating significant revenue and profits much sooner. Book a
complimentary 30-minute call for a debriefing on your 4 Decisions Assessment.

Learning: Book your team into a one-day public or private Scaling Up workshop. Take the idea
further, and have a member of your team earn a Rockefeller Habits Master Practitioner
Certification through our online learning and coaching program. This person can support
implementation internally.

In addition, we can offer you an extensive online array of accredited short courses, taught by top
business thought leaders, to provide you and your management team with the kind of continuing
business education in leadership, marketing, sales, hiring, etc., that keeps you ahead of the
competition. You can access all of this from the comfort of your desk or home.

Technology: We offer an online software-as-a-service (SaaS) management accountability system
called Align, which has more than 3,000 users. It’s the CEO’s (or COO’s) tool for managing the
cascading priorities, key performance indicators, and accountabilities that can become an Excel-
spreadsheet nightmare when you grow beyond a handful of employees, especially when your
teams are spread across multiple locations. We also offer a SaaS called Better Book Club that
helps you get employees reading books and applying what they learn to improve your
organization.

These support systems typically provide a 10x return on your investment. Information is available at
scalingup.com.

Who Will Succeed

In 2002, the year Mastering the Rockefeller Habits was first published, Verne hosted the 10-year
reunion for the “Birthing of Giants” executive program he founded and chaired on the campus of MIT.
This program was the genesis of what you’ve learned in this book. During the Q and A session, one of
the alumni asked him a key question: “Over the years, you have seen many business leaders succeed
and fail. Have you noticed anything specific about those who made it to greatness?”

Verne’s answer to that question is the same today. Success belongs to those who have these two
attributes:

• An insatiable desire to learn
• An unquenchable bias for action

Those who win are constantly looking for better ways to do things and to improve. They don’t sit
back and let others pass them by. They use their tools and resources to attack issues and make things
happen.

It’s that simple. Want to succeed with this book and your business? Keep on learning and acting as
you scale up.

Key Resources in Scaling Up
NOTE: Some websites require that you register or pay for access to the full text of articles.

Antifragile: Things That Gain From Disorder/Nassim 4
Nicholas Taleb

The E-Myth Revisited/Michael E. Gerber 4

The Lean Startup/Eric Ries 4, 53

“Give the Gazelles a Break”/Ann Wright interview with 4
Verne Harnish/Business Review Europe

“High-Impact Firms: Gazelles Revisited”/Zoltan J. Acs, 4
William Parsons, and Spencer Tracy for the US Small
Business Administration

Willful Blindness: Why We Ignore the Obvious at Our 5
Peril/Margaret Heffernan

Multipliers: How the Best Leaders Make Everyone 5, 75, 79
Smarter/Liz Wiseman with Greg McKeown

Good to Great: Why Some Companies Make the Leap... 10, 109, 120
And Others Don’t/Jim Collins

The Five Dysfunctions of a Team: A Leadership 15, 75, 151
Fable/Patrick M. Lencioni

Great by Choice: Uncertainty, Chaos, and Luck — Why 17, 31, 145, 195
Some Thrive Despite Them All/Jim Collins and Morten T.
Hansen

“How Fast Can Your Company Afford to Grow?”/Neil C. 17, 200, 205
Churchill and John W. Mullins/Harvard Business Review

“Businesses Worth Repeating”/Verne Harnish/Fortune 23

“Evolution and Revolution as Organizations Grow”/Larry 26
E. Greiner/Harvard Business Review

Emergence: The Connected Lives of Ants, Brains, Cities, 28
and Software/Steven Johnson

Turn the Ship Around! A True Story of Turning Followers 29
into Leaders/L. David Marquet

Crucial Conversations: Tools for Talking When Stakes Are 35
High/Keny Patterson, Joseph Grenny, Ron McMillan, and
Al Switzler

The Billionaire Who Wasn’t: How Chuck Feeney Secretly 44
Made and Gave Away a Fortune/Conor O’Clery

The Business of Happiness: 6 Secrets to Extraordinary 44
Success in Life and Work/Ted Leonsis with John Buckley

The Soul of Money: Transforming Your Relationship With 45
Money and Life/Lynne Twist with Teresa Barker

KPI library/online resource/ServiceNow 49

Key Performance Indicators: The 75 Measures Every 49
Manager Needs to Know/Bernard Marr

The Great Game of Business: The Only Sensible Way to 50, 72, 152, 157
Run a Company/Jack Stack

How the Mighty Fall, And Why Some Companies Never 51
Give In/Jim Collins 54
57
Lean execution/online video interview with Guy 57
Parsons/scalingup.com 60
61, 80
The Checklist Manifesto: How to Get Things Right/Atul 61
Gawande 65
65
“Secrets From Apple’s Genius Bar: Full Loyalty, No 65
Negativity”/Yukari Iwatani Kane and Ian Sherr/The Wall 65
Street Journal

“How to Create Scorecards for Topgrading”/Toby
Jenkins/Bluewire Media Web Strategy Blog

First, Break All the Rules: What the World’s Greatest
Managers Do Differently/Marcus Buckingham and Curt
CofFman

Change to Strange: Create a Great Organization by
Building a Strange Workforce/Daniel M. Cable

Assess Systems’ pre-employment tests and Objective
Management Group’s Sales Assessments

Who: The A Method for Hiring/Geoff Smart and Randy
Street

Topgrading: The Proven Hiring and Promoting Method
That Turbocharges Company Performance/Bradford D.
Smart

Certified Master Practitioner training in
Topgrading/scalingup.com

Drive: The Surprising Truth About What Motivates 70, 72
Us/Daniel H. Pink 71

Peak: How Great Companies Get Their Mojo from 72–73
Maslow/Chip Conley 74
74
“How Netflix Reinvented HR”/Patty McCord/Harvard 74
Business Review 74
75
StrengthsFinder assessments from Gallup Strengths Center
76, 116, 117
Now, Discover Your Strengths/Marcus Buckingham and 77, 111
Donald O. Clifton 78

Trombone Player Wanted/a six-DVD series/Marcus
Buckingham

The One Thing You Need to Know... About Great
Managing, Great Leading, and Sustained Individual
Success/Marcus Buckingham

Good Company: Business Success in the Worthiness
Era/Laurie Bassi, Ed Frauenheim, and Dan McMurrer, with
Larry Costello

Uncommon Service: How to Win by Putting Customers at
the Core of Your Business/Frances Frei and Anne Morriss

The New Rules of Marketing &PR: How to Use Social
Media, Online Video, Mobile Applications, Blogs, News
Releases, and Viral Marketing to Reach Buyers
Directly/David Meerman Scott

Outliers: Why People Are Successful/video

seminar/Malcolm Gladwell/scalingup.com 78
79, 80
The Happiness Advantage/online video/Shawn Achor
79
The Weekly Coaching Conversation: A Business Fable 80
About Taking Your Game and Your Team to the Next
Level/Brian Souza 80
96, 98
Lean In: Women, Work, and the Will to Lead/Sheryl
Sandberg 98
109
Leadership and the One Minute Manager: Increasing 111
Effectiveness Through Situational Leadership/Ken 112
Blanchard, Patricia Zigarmi, and Drea Zigarmi

Help Them Grow or Watch Them Go: Career
Conversations Employees Want/Beverly Kaye and Julie
Winkle Giulioni

“Building Your Company’s Vision”/James C. Collins and
Jerry I. Porras/Harvard Business Review

“The Core Competence of the Corporation”/C.K. Prahalad
and Gary Hamel/Harvard Business Review

Lords of Strategy: The Secret Intellectual History of the
New Corporate World/Walter Kiechel III

Google AdWords Keyword Planner

Epic Content Marketing: How to Tell a Different Story,
Break Through the Clutter, and Win More Customers by
Marketing Less/Joe Pulizzi

“Your Career Success Hinges on One Word: Do You Know

It?”/Verne Harnish/Linkedln 112
112, 113
The Inside Advantage: The Strategy That Unlocks the
Hidden Growth in Your Business/Robert H. Bloom and 112, 113
Dave Conti 115
117
How Companies Win: Profiting From Demand-Driven 117
Business Models No Matter What Business You’re In/Rick 119
Kash and David Calhoun 120

“Turning Goals Into Results: The Power of Catalytic 133, 149
Mechanisms’/Jim Collins/Harvard Business Review 135
138
“What Is Strategy?”/Michael E. Porter/Harvard Business
Review

ROAR! Get Heard in the Sales and Marketing Jungle: A
Business Fable/Kevin Daum with Daniel A. Turner

“The X-Factor”/Verne Harnish/Fortune

Built to Last: Successful Habits of Visionary
Companies/Jim Collins and Jerry I. Porras

The 7 Habits of Highly Effective People: Powerful
Lessons in Personal Change/Stephen R. Covey

The Balanced Scorecard: Translating Strategy Into
Action/Robert S. Kaplan and David P. Norton

The Innovator’s Dilemma: The Revolutionary Book That
Will Change the Way You Do Business/Clayton M.
Christensen

“Get in the Game” workshop/Jack Stack 157
159
Bringing Out the Best in People: How to Apply the
Astonishing Power of Positive Reinforcement/Aubrey C. 162
Daniels 163
170
Big Data: A Revolution That Will Transform How We Live, 172
Work, and Think/Viktor Mayer-Schönberger and Kenneth 175
Cukier 175
176
“Growth as a Process”/Interview with Jeffrey R. Immelt by 177
Thomas A. Stewart/Harvard Business Review
195, 207
The Ultimate Question 2.0: How Net Promoter Companies
Thrive in a Customer-Driven World/Fred Reichheld

“The Happiest Man in Detroit”/Keith Nnughton/Bloomberg
Businessweek

Titan: The Life of John D. Rockefeller, Sr./Ron Chernow

“CEO of the Year: T Boone Pickens”/Kerry Curry/D CEO

Managing Up: How to Forge an Effective Relationship
With Those Above You/Rosanne Badowski

Competing on Internet Time: Lessons From Netscape and
Its Battle With Microsoft/Michael A. Cusumano and David
B. Yoffie

Simple Numbers, Straight Talk, Big Profits! 4 Keys to
Unlock Your Business Potential/Greg Crabtree with
Beverly Blair Harzog

The Customer-Funded Business: Start, Finance, or Grow 200
Your Company With Your Customers’ Cash/John Mullins
202
“High Stakes Negotiation”/online course/Victoria 204
Medvec/scalingup.com 209
209–210
“Finding Money You Didn’t Know You Had”/Verne 210
Harnish/Fortune Small Business 236

“Right Away and All at Once: How We Saved
Continental”/Greg Brenneman/Harvard Business Review

Microsoft MapPoint software (to be replaced by Bing Maps
on Jan. 1, 2015)

Intellectual Capital: The New Wealth of
Organizations/Thomas A. Stewart

“Hire the Right #2”/Verne Harnish/scalingup.com

An Index of Selected Terms, People, Companies, and Authors in Scaling Up

NOTE: In the case of terms and topics mentioned throughout the book, this index lists major
references.

4 Decisions, 2, 3, 9-19, 93
4 Decisions Assessment, 9, 235, 236
4D Framework, 7-9

Driver, Demands, Disciplines, Decisions
4Es of marketing, 108, 235
4Q (4 Questions), 168
5Fs: Faith, Family, Friends, Fitness, Finance, 44
7 financial levers, 18, 195, 200, 205, 219, 220, 231, 232
7 Strata of Strategy, 2, 13, 14, 86, 87, 107-122, 235

Accountability, Responsibility, and Authority, 42-43
Achor, Shawn, 78
Actions, 37, 91, 129-130, 132
Ammex, 180
AmRest Holdings, 76-77, 172
Appletree Answers, 63, 93, 99-105, 169-170
Aquire, 73
Ashiana Housing, 187-189
Atlassian, 62, 75, 166

Badowski, Rosanne, 176
Banks, Rob, 107
barriers, 5, 21-25

leadership, 5, 25, 27-29, 31
scalable infrastructure, 5, 25, 29-30, 31
market dynamics, 5, 25, 30-31
Bassi, Laurie, 75
Benetton India Private Ltd., 167, 204
Benjamin Franklin International School, 139
Big Ass Fans/Big Ass Solutions, 128, 164
Big Hairy Audacious Goal (BHAG®), 6, 13, 29, 120-122, 127, 129-130
Bikoff, J. Darius, 110
Blanchard, Ken, 79, 80
Blinds.com, 76

Bloom, Robert H., 112, 113
Booth, Jeff, 53-54, 111-112, 116, 122
Brand Promise, 13, 61, 70, 112-113, 114-115, 127, 130-131
Brand Promise Guarantee, 13, 115-116
Brenneman, Greg, 209
Browne, Gene, 59, 64-65, 75, 77-78, 149, 153-156, 157
Buckingham, Marcus, 61, 73, 74, 80
BuildDirect.com, 53-54, 111-112, 113-114, 115, 116, 118, 119, 122

Cable, Daniel M., 61
Calano, Jimmy, 166
Calhoun, David, 112, 113
Cash Acceleration Strategies (CASh) tool, 18, 195, 196, 199-205
cash conversion cycle (CCC), 17, 199-205
Cash Flow Story, 219
Catapult Systems, 199, 202, 204
celebrations, 75, 133, 158-159, 235
Chernow, Ron, 175
Christensen, Clayton M., 138
Churchill, Neil C., 17, 200, 205
City Bin Co., The, 59, 64-65, 75, 77-78, 149, 153-156, 157
CJ Advertising, 77
Cleary, Andy, 184
Clifton, Donald O., 74
Coastal.com, 145, 169
Coffman, Curt, 61, 80
Collins, Jim, 6, 13, 17, 31, 51, 96, 109, 115, 120-121, 126, 145, 195
Conley, Chip, 71
Conti, Dave, 112, 113
Cooper, Dwight, 203
Core Competencies, 93, 98-99, 128, 139
Core Purpose, 16, 29, 59, 70, 93, 97, 98, 101-106, 124, 127, 129-130, 150, 160, 173, 174, 235
Core Values, 29, 76, 80, 93-96, 101-106, 173
council, 12, 108-109, 235
Covey, Stephen R., 133, 149
Crabtree, Greg, 195, 207, 210-211, 213, 216, 221, 225, 226, 227
Crabtree, Rowe & Berger, 207, 213,
Critical Number, 72, 127, 131-132, 133, 134, 152-153, 157, 158-159, 172
Croft, Jon, 75, 78-79

Crosetto, Fred, 180
Cukier, Kenneth, 162
Cusumano, Michael A., 177

daily huddle, 23, 178-183, 235
Daly, Jack, 75
Daniels, Aubrey C., 159
Daum, Kevin, 117
Differentiating Activities, 117-118
Donnelly, Kevin, 66

EmploymentGroup, 62
Ersek, Barrett, 120, 126, 209-210
Express-Med, 21-22
Ezypay, 96, 173

Fathom, 73
Frei, Frances, 76, 116-117
Fullerton, Mark, 48
Function Accountability Chart (FACe), 10, 11, 36, 38, 46-51

Person Accountable, 11, 47-51, 132
Results/Outcomes, 11, 50

Garbage University, 75, 77
Gawande, Atul, 57
gazelles, 1, 3-4, 97, 209
Gerber, Michael E., 4
Giulioni, Julie Winkle, 80
Gladwell, Malcolm, 78
Goals, 6-7, 131-132
Godsey, Ben, 152-153, 159
Goldsmith, Marshall, 45, 172
Goodner, Sam, 199, 202, 204-205
Good Night Medical, 23
Gray, Jade, 174
Greiner, Larry E., 26
Gung Ho! Pizza, 170-171, 174
Gupta, Vishal, 187-189

Hallberg, Chuck, 23

Hamel, Gary, 6, 98, 98-99, 109
Hansberger, James, 44
Hansen, Morten T., 17, 31, 145, 195
Happy Lawn, 120
Hardy, Roger, 145, 169
Harrington, Jack, 24, 158
Hedgehog Concept, 121
Heffernan, Margaret, 5
Hersey, Paul, 79
Higgins, Alan, 126, 165
Holganix, 120, 126

Ignite Social Media, 149-150
Infusionsoft, 1

Jacobson, Nelson, 123-124, 137
Jagger, Mike, 53-54
Job Scorecard, 59-61, 65, 74
Johnson, Steven, 28
JSJ Corporation, 123-124, 137

Kaplan, Robert S., 135
Kash, Rick, 112, 113
Kay, Rick, 184-185, 188
Kaye, Beverly, 80
Keating, Nathan, 219
Key Initiatives, 125, 131, 132
key performance indicators (KPIs), 11, 28, 46, 49-50, 56, 72, 120, 130, 134, 135, 163, 171, 174,

199, 231, 232
Kept Promise Indicators, 13, 113, 115, 131, 135
Key Thrusts/Capabilities, 125, 127, 131
Kiechel III, Walter, 109

Lean principles, 11, 53-55, 56, 73, 202
Lean Institute, 54

Lencioni, Patrick M., 15, 75, 151
Leonsis, Ted, 44

Manogue, Gary, 64
Markitforce, 126, 165
Marquet, L. David, 29

Marr, Bernard, 49
Mask, Clate, 1
Mayer-Schönberger, Viktor, 162
McGovern, Henry, 76, 172
Medvec, Victoria, 202
Meeting Rhythm, 9, 16, 175-190
Melbourne, Lois, 73
MemberHealth, 23
Microsoft MapPoint, 209-210
Milner, Joss, 219
Miltz, Alan, 195, 219
Mindshare, 110-111, 116
Miner Corporation, The, 173
Mohanty, Sanjeev, 167, 204
Moler, Kelly, 63, 66
MOM’s Organic Market, 59, 63, 65, 66, 70, 71, 72, 75, 78-79, 204
Moore, J. Stuart, 76, 95
Morrison, Simon, 41, 171
Morriss, Anne, 76, 116-117
Mullins, John W., 17, 200, 205

Nash, Scott, 53, 56, 57, 58, 59, 60, 63, 64, 179
Naughton, Keith, 172
Net Promoter Score/Net Promoter System (NPS), 145, 169, 170-171
Norton, David P., 135
Nurse Next Door, 53-54

O’Clery, Conor, 44
offsites, 158, 180, 190, 235
O’Loghlen, John, 174
One-Page Personal Plan (OPPP), 10, 36, 37, 43-45, 172
One-Page Strategic Plan (OPSP), 13-14, 86, 90-91, 107-108, 123-140, 150, 174, 177
One-PHRASE Strategy, 13, 116-117, 118
OTG Software, 184-185, 188
Outback Steakhouse, 119-120

Parsons, Guy, 54
Patterson, Kerry, 35
Perceptionist, 22

Perly Fullerton, 48
Perly, James, 48
Phillips, Lisa, 99
Pink, Daniel H., 70, 72
Porras, Jerry I., 6, 96, 120
Porter, Michael E., 13, 117, 118
Power of One, The, 18, 195, 197, 219-233
PPR Talent Management Group, 203
Prabhu, Ajay, 167
Prahalad, C.K., 98
Priorities, 9, 29, 72, 127, 131, 134, 137, 149-160, 173, 174, 185
Process Accountability Chart (PACe), 11, 36, 39, 52-57
Profit per X, 13, 120-121, 129-130, 150
ProService Hawaii, 152-153, 158-159
Provident Security, 53-54
Pulizzi, Joe, 112
Purpose: See Core Purpose

Quarterly Theme: See Theme
QuEST Global Engineering Pvt. Ltd., 167

Rackspace Hosting, 64, 115
Ratliff, John, 81, 82, 86, 87, 88, 89, 90, 91, 92
Raytheon, 24, 158
RedBalloon, 114-115, 121, 173
Reichheld, Fred, 170
rewards, 81, 104, 127, 133, 149, 153, 157
Ries, Eric, 4, 53
Ritz-Carlton, 43, 105, 181
Roche, Stephen, 41
Rockefeller Habits Checklist™, 15-17, 146, 147, 150-151, 235
Rockefeller, John D., 15, 175, 208
Rocks, 125, 127, 132-133, 154, 171, 172, 205
Rudy, Alan, 21-23, 121

Salisbury Landscaping, 203
Sandberg, Sheryl, 79
Sandbox, 109, 112-114, 131
Sapient, 76, 95

scoreboards, 17, 133, 173
scorecards, 167, 172
Scott, David Meerman, 77, 111
Shine Lawyers, 41, 171
Sim, Ken, 53-55
Simple Numbers, 207, 210, 214, 221, 227
Simson, Naomi, 114-115, 121
Situational Leadership, 79-80
Sleep Health Supplies: See Good Night Medical
Smart, Bradford D., 59-60, 65
Smart, Geoff, 59-60, 61, 65
Smith, Carey, 164
Softonic, 55
South, Jerry, 126
Souza, Brian, 79, 80
Speed Wire, 66
Sproule, Adam, 203
SRC Holdings, 50, 157
Stack, Jack, 50, 72, 152, 157, 158
Start/Stop/Keep, 16, 137, 140, 164, 165
Steinfeld, Jay, 76
Stepleton, John, 53
Stewart, Thomas A., 210
Street, Randy, 65
stucks, 183
Sullivan, Chris, 119-120
SWT (strengths, weaknesses, and trends), 13, 14, 86, 89, 137, 138-139, 235

Taleb, Nassim Nicholas, 4
Tannas, Scott, 26-27
Targets, 130-131, 133
Theme, 16, 29, 105, 133, 153-156, 157, 158-159, 235
Think, Plan, Act, Learn, 12
Tobin, Jim, 149, 152
Topgrading, 59-60, 65-66, 70
Towne Park, 126, 182
Twist, Lynne, 45
Tyabji, Hatim, 94, 96

Values: See Core
Values VeriFone, 94, 96
Virtual Technology Corporation (VTC), 24, 158
Vision Summary, 2, 12-13, 86, 88, 124-125, 235

Western Financial Group (WFG), 26-27
Who, What, When (WWW), 15, 146, 148, 185, 186
Winterhalter Gastronom, 114
Wiseman, Liz, 5, 75, 79
Womack, Jim, 54

X-Factor, 13, 110, 119- 120, 122

Yoffie, David B., 177

Zigarmi, Drea, 80
Zigarmi, Patricia, 80

Verne is founder of the world-renowned Entrepreneurs’ Organization (EO) and chaired for 15
years EO’s premier CEO program, the “Birthing of Giants,” held at MIT. Founder and CEO of
Gazelles, a global executive education and coaching company with hundreds of partners on six
continents, Verne has spent more than 30 years educating entrepreneurial teams.

The “Growth Guy” syndicated columnist, he’s also a regular columnist for Fortune magazine.
He’s the author of Mastering the Rockefeller Habits and, along with the editors of Fortune, authored
The Greatest Business Decisions of All Time, for which Jim Collins wrote the foreword. Verne
chairs annual Growth Summits in North America, Australia, Europe, and Asia and continues to teach
in the MIT-based executive program he founded.

Residing in Barcelona, Spain, he’s married with four children and enjoys piano, tennis, and magic
as a card-carrying member of the International Brotherhood of Magicians.