Scaling Up summary

Only two to three percent of all US companies will become high-impact firms that last for over 25 years and contribute substantially to overall economic growth. Why do so few 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 and the organizational and physical infrastructure don’t grow alongside each other, success simply won’t last.

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 a 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 (FACe) and Process Accountability Chart (PACe).

It’s said that a single excellent employee can replace three good ones. So invest in all of your people to grow them!

Start by replacing the word “manager” with “coach.” The people analytics team at Google discovered 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 a team and inspiring its members to grow and improve.

You’d 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 keeps smaller 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 a succinct, realistic sentence. For example: “Practice what we preach.”

Now that your vision summary is ready, you’ve got the bones of a clear strategy. But if you want to reach your goals even more quickly, you should understand exactly where your organization’s strengths lie.

First, you’ll need to look 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 googling “safest car” will lead directly to Volvo.

The One-Page Strategic Plan (OPSP) is a framework that will help your company visualize and achieve your goals. More than 40,000 companies use OPSPs 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 OPSP: Who is responsible for each step? What is your number one priority for the next year? Which metrics can you use to track your progress toward it?

Great firms are like great 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 practise together too. That’s why meetings are so important.

A steady meeting routine allows information to flow accurately and prevents communication barriers. To 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 offsite in every quarter.

We’d all like to save up for something big, but this is often made tricky as we don’t know how much we need to spend each month. Financial statements are even neglected entirely by some firms, though funds are of course central to expansion.

It’s essential to understand how cash flows through your company and to have some cash reserves. In Great by Choice, Jim Collins and Morton T. Hansen revealed that outstanding companies have three to ten times more cash in reserve than their more mediocre competitors.

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?