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My notes from Mastering the Rockefeller Habits
- Overview
- You only have to define two points
- where you plan to be in 10-25 years
- what you have to do in the next 90 days
- Keep everything stupidly simple
- Handful of objectives each quarter
- What you’re planning to do
- Must really matter (to existing & potential customers)
- Differentiates you from your competition
- Priorities
- Top 5
- Top 1-of-5
- You only have to define two points
- Chapter 1 – Mastering Growth
- 3 Barriers to Growth
- Executive team needs to grow as leaders
- Delegate
- Predict
- Systems and Structures
- As you move from 2 to 4 (people, products, etc) complexity increases by 12x
- 3 Org charts
- Accountability Chart
- Work Process Chart
- One process / quarter
- Pick most dysfunctional and clean it up
- One process / quarter
- Almost Matrix
- Understanding Market Dynamics
- “Number one function of a leader… ability to predict”
- Executive team needs to grow as leaders
- Quarterly Themes
- Meeting Rhythm
- Daily huddle
- Top 5
- Top 1-of-5
- Roadblocks
- Report your numbers
- Weekly meeting
- Quarterly goals
- Daily huddle
- “One great person can replace three good people”
- 3 Barriers to Growth
- Chapter 2 – Right People Doing the Right Things Right
- 1% vision and 99% alignment
- Right People
- Fewer people paid more
- Pay 50 to 100% more
- Lots of training
- Would you enthusiastically rehire each person?
- Makes a list of 10-20 people you could email tomorrow who have contact with the type of people you want
- 2-paragraph summary describing your firm, position, kind of person you want to hire
- Call ahead of time to give heads-up the email is coming
- Send email
- Follow-up a week later
- Selling the company and its vision
- Selection Process
- Behavior-based structured interview
- See Topgrading
- Standard Personality Test
- Least important
- Bartell & Bartell, $600
- Have yourself tested
- Bigby Havis & Assoc. online testing products
- Culture is most important thing; #1 is alignment with core values
- #2 is positive outlook
- Emotional maturity ranks high
- Assessment-center approach
- 3 or 4 business challenges
- Candidate gets 1 hour
- Walk through with candidate to see how they think & how you work together
- Management hires, bring on as consultant first
- Behavior-based structured interview
- Get the wrong people out as quickly as possible
- Fewer people paid more
- (Right [Things) Right]
- Fundamental decisions, relationships and functions of a business
- Right Things
- Left side
- Do you have a viable economic model?
- Revenue / market share should grow at 2x market rate
- People and relationships involved in any business
- Customers
- Employees
- Shareholders
- Leaders success is defined as having satisfied all 3 stakeholders
- Outcomes
- Get
- Keep
- Grow
- Things Right
- Do you have the management practices and processes to take advantage of the market opportunity you’re pursuing?
- Profitability at top of industry
- Activities and Transactions
- Making or Buying (COO)
- R&D splits off at $10m
- Selling (VP Sales)
- Sales / Marketing split at $10m
- Key measurement for marketing is lead generation
- Sales / Marketing split at $10m
- Keeping Good Records (CFO)
- Accounting / Finance split at $10m
- Making or Buying (COO)
- Outcomes
- Better
- Faster
- Cheaper
- Priorities
- Choose one circle on each side that needs the most attention
- Think of the circles as spinning plates balanced on top of sticks
- Who is accountable for each circle?
- You lead people; manage their activities
- Chapter 3 – One-page Strategic Plan
- Downloads at gazelles.com
- To remain competitive, your organization needs 3 things:
- Framework
- Language
- Habit
- Planning Pyramid
- A vision is a dream with a plan.
- One-Page Strategic Plan
- Planning Pyramid on its side
- Name of the firm
- Can be the first step of disagreement
- Opportunities and Threats
- Conduct SWOT
- Top 5 Rule
- Core Values
- 5-8 statements
- Should’s & Shouldn’ts
- Ten Commandments or Constitution
- Jim Collins’ “Building Your Company’s Vision“
- Purpose
- Why is this company doing what it’s doing?
- What’s the higher purpose?
- Why do I have passion for what we’re doing?
- Actions & BHAG
- Review Core Values & Purpose
- What actions does the firm need to take to bring things into better alignment?
- BHAG
- 10- to 25-year goal
- Targets & Sandbox
- Target
- Where you want the firm to be in 3- to 5-years
- Sandbox
- Target
- Brand Promise
- Key need to satisfy your customers
- Differentiation
- Key Thrusts / Capabilities
- 5 or 6
- How you’re going to
- Dominate the Sandbox
- Fulfill your Brand Promise
- Meet your Targets
- Goals & Key Initiatives
- Goals
- What your company needs to achieve in the coming year to realize your longer-term targets
- Key Initatives
- 5 or 6
- Corporate New Year’s resolutions
- Goals
- Critical Numbers
- One from the balance sheet, one from the income statement
- Actions and Rocks
- How
- 5 or 6 simultaneous 13-week missions
- Provide priorities to your entire organization
- Drive to achieve the quarterly missions (Rocks)
- Theme
- Scoreboard Design
- Celebration / Reward
- Quarterly Meetings
- Don’t leave until the next quarterly meeting date is set
- Reconsider your theme
- Re-establish your action steps
- Lots of preparation beforehand
- Schedules
- Due dates
- When things will happen
- What’s first? What’s next?
- One page outline of the steps & weekly due dates to complete the tasks
- Accountability
- Who
- Only one person is accountable
- If everyone’s accountable then no one’s accountable
- Chapter 4 – Use of Core Values
- Summary
- Few rules
- Repeat yourself
- Act consistent with the rules
- Strong culture leads to
- superior performance
- higher employee retention
- a better-aligned organization
- makes leading people much easier
- reduces policies and procedures
- make tough decisions
- Discovering your Core Values
- Finding the Right Words
- First draft in 15 minutes
- Finished document in 1 hr
- Mission to Mars
- 5 employees who demonstrate your core values through observing their actions
- Who are they?
- How do they work
- Finding the Right Words
- 8 actions to bring your core values alive
- 1 – Storytelling
- See Disney vision
- Tell a story, end with “and that’s why we consider (blank) one of our core values”
- Tell stories at monthly and/or quarterly meetings
- Ask for examples at weekly meetings
- 2 – Recruitment
- Use the language from the core values in recruitment ads and job descriptions
- Test the candidate’s alignment with your core values
- 3 – Orientation
- Company legend behind each core value
- 4 – Performance Appraisal
- Gazelles.com download, see Figure 4-1 “Creating a Personal Plan”
- Organize your employee handbook into sections around each core value
- 5 – Recognition and Reward
- Use to gain a new source of corporate stories
- 6 – Internal Newsletter
- 7 – Themes
- Core values are most obvious source of quarterly or annual themes
- 8 – Everyday Management
- When you make a decision, relate it to a core value
- 1 – Storytelling
- Have a Few Rules, Repeat Yourself, and Be Consistent
- Think of it as teaching your 2-year-old
- Summary
- Chapter 5 – Organizational Alignment and Focus
- Know your Top Priorities!
- Summary
- If you have too many priorities, you have no priorities
- Company’s 5 most important priorities
- Top 5 and Top 1-of-5
- Each individual has 5 most important priorities, aligned with the company’s
- Management Accountability Plan (MAP) aligns specific activities with priorities
- Establish Top 5 and Top 1 of 5
- Planning Pyramid
- Align long-term goals with quarterly challenges
- Use to determine Top 5
- For short term
- What do I need to be doing today to keep the company moving forward?
- For short term
- Top 5 and Top 1 of 5 should be basis of a regular performance appraisal process
- Alignment!
- Review with all employees at monthly and quarterly meetings
- Planning Pyramid
- Management Accountability Plan (MAP)
- Assign the accountabilities
- Gazelles.com download figure 5-1
- Assign within 24-48 hours of determining top 5
- Who’s going to be the point person on what, and when they’ll produce the deliverables
- Week-by-week plan over 13 weeks
- Everyone needs to produce a one-page MAP for each of their major priorities
- Finding Top 1 in 5
- 7 Sore Points for Companies
- Not big enough to compete
- Company lacks a key player
- Economic engine is broken
- Someone else is controlling our destiny
- Need a war chest to compete
- One of the best reasons to go public
- We can’t raise money until we grow
- We’ve got to scale back or we won’t survive
- Pursuing your Top 1 of 5 goal is probably the most distasteful, frustrating and perhaps discouraging thing you’ll ever confront
- Do not do it alone
- What is your number 1?
- 7 Sore Points for Companies
- Chapter 6 – Quarterly Theme
- Summary
- Use themes and images
- Track progress
- Celebrate success
- Takes an image to anchor a message with the audience
- Connects not just with their heads, but also their hearts
- “encourage the heart” when seeking organizational alignment
- Priorities and Critical Numbers to Drive your Theme
- Refer back to one-page strategic plan
- Take Top priority & align with Critical Number
- Brainstorm a theme
- See Core Values
- Seven different forms of intelligence
- Verbal
- Visual
- Spatial
- Body
- Musical
- Interpersonal
- Intrapersonal
- Hit as many of these as possible when announcing the theme
- Tracking Progress
- Publically
- Rewarding and Celebrating
- Real reward is accomplishment, reaching a goal and doing it together
- Summary
- Chapter 7 – Employee Feedback
- Summary
- Recurring customer and employee hassles cost your employees 40% of their time
- Figure out what problems are arising and recurring
- 6-point process to resolve identified hassles
- Recurring problems and hassles make people hate their job
- Six Sigma Institute: fundamentals of quality control
- Make a 1% improvement in your products and services each week, you’ll gain greater and greater yields from the solutions with each passing year.
- Aim for solving too many problems, you’ll have made a hassle out of your de-hassling system
- Gathering Data
- 3 questions
- What should we start doing?
- What should we stop doing?
- What should we continue doing?
- Ask from their perspective and from the client’s perspective
- 3 questions
- Collect raw, unedited data, brainstorm solutions
- Report progress on longer-term issues
- Log anything which caused them to spend more than a minute doing / something they shouldn’t have needed doing
- What are customers requesting
- What hassles customers from doing business with you?
- Handling Feedback
- Be responsive
- Find some quick-hit solutions
- Don’t summarize the feedback
- Exception: if it’s personal, deal with it 1-1
- Reporting Progress
- Etiquette 101
- 6-point set of problem-solving guidelines
- Relevancy
- Go after what’s causing the most pain
- Specificity
- Address the root
- Ask “why” several times
- Focus on the what, not the who
- When all the what’s keep leading to the same who, you may need to fire that person
- Most hassles are process hassles, not people hassles
- Involve everyone affected
- Get the story once, not 10 times
- Never backstab
- Relevancy
- 6-point set of problem-solving guidelines
- Management-Development Opportunities
- Form a mid-level management team to do initial screening
- Summary
- Chapter 8 – Daily and Weekly Executive Meeting
- Summary
- Got to have rhythm
- Tightly run daily, weekly, monthly, quarterly, annual meetings
- Specific agenda
- Focus on what’s important
- You’ll solve problems quickly
- Have better alignment
- Routine
- Faster your growing, more meetings you need
- Short with a structure, time limits and specific agenda
- More Meetings
- Quarterly, measure progress towards year-end
- Annually, set goals based around One-Page Strategic Plan
- Growing < 15% / year, 1 year = 1 year
- Growing 20-100%, 1 quarter = 1 year
- Growing > 100%, 1 month = 1 year
- Each meeting builds upon the next
- Discuss new opportunities, strategic concerns and bottlenecks
- Daily Meetings
- 5- to 15-minute huddle
- Because everyone’s together, things get quickly and accurately communicated
- Focuses the collective intelligence of the team
- Timing
- Irregular, 8:08am
- People do better being on time when the time is irregular
- Start and end on time
- Don’t problem solve, only identify problems
- Irregular, 8:08am
- Who Runs the Meeting
- Someone who is structured and disciplined
- Main job: keep things running on time
- Agenda
- What’s Up
- Daily Measures
- Some sort of measurable behavior
- Where are you stuck?
- Powerful to verbalize where you’re having problems
- > 2 days without being stuck typically means there’s a bigger problem
- The only people who don’t get stuck are those who aren’t doing anything
- Weekly Meeting Agenda
- More issues-oriented
- Strategic gathering
- Schedule
- Same time, same place for 1 hour
- 5 min: Good News (Big Wins)
- 10 min: KPIs
- 10 min: Customer and Employee Feedback
- 30 min: A Rock / Single Issue
- Don’t cover everything, every week
- Issues only addressed at a shallow level
- Never focuses collective intelligence for a period on one issue
- Focus on a large priority for the month
- Limit to 1 issue
- Raise this issue / rock monthly so its discussed 3x / quarter
- You’ll knock out 15-20 rocks / year doing this
- Don’t cover everything, every week
- Closing comments
- Each attendee sums up with a word or phrase reaction
- Monthly Meeting
- Focus of monthly meeting is learning
- 2-4 hour meeting
- Extended management team
- Review progress
- Review P&L
- What’s working & not in processes and make adjustments
- 1-2 hours training
- Summary
- Chapter 9 – Brand Promise
- Summary
- What really matters to your customers?
- Your brand promise is the key factor that sets you apart from all competitors
- Starting point from which all other executive decisions are derived
- Both competitive and measurable
- Start working now on the next value-added improvement
- Measurable brand promise defines your company in the minds of the public
- Gives your organization something huge to strive toward
- Choose the right one… and you win.
- One page strategic plan
- Top 5 and Top 1 of 5
- Brand promise is probably somewhere in here
- Value-add Worksheet
- 5 questions
- Zero in on your brand promise
- Consider your BHAG
- Define your Sandbox
- Desired sphere of influence
- Define your sandbox geographically
- Think about your customers and their demographic
- Consider how many product lines
- Determine Customer Needs
- What is your customers’ greatest need?
- Not want
- What is your customers’ greatest need?
- Measurable Brand Promise
- Shouldn’t be easy
- Cause some stress
- Avoid getting caught up in marketing slogans
- Find the measurable deliverable and leave the slogan to the marketing team
- Control Your Chokepoint
- Your Brand Promise can change
- Summary
- Chapter 10 – Art of Bank Financing
- Summary
- Make banks compete to loan you money
- Creative process
- Shaping the right perception of your business in the banker’s mind and heart
- Average presentation leads to below-average chances of being funded
- Who to ask, how to ask, what to ask for
- Have banks compete against each other to loan you money
- Step 1 – Loan Opportunity Assessment
- Interest rates vary from prime to prime +2%
- Depending on perceived risk of the loan and ability to negotiate
- Three basic phases
- Preparation
- Presentation
- Persistence
- Four levels of risk
- The transaction
- The industry
- Borrower’s financial position
- Quality of collateral
- How much will you need?
- What your real needs are
- Create a package that a bank would be interested in financing
- Prepared to give up equity or incur the debt
- Determine what you need
- Decide what you’re willing to give up
- Determine if your opportunity can attract financing; what you need to do to make it attractive
- Be willing to commit whatever time and resources are necessary
- Interest rates vary from prime to prime +2%
- Step 2 – Strategy Development
- Loan package
- Writing
- Research
- Preparing financials
- Company biographies
- Making presentations
- Following up
- Hire outside consultant, accountant and/or attorney
- Process takes 40-100 days
- 3-6 weeks: package preparation
- 1-3 weeks: bank presentations
- 2-4 weeks: bank processes your request
- 1-3 weeks: final paperwork and loan completion
- Loan Package is a Strategic Planning Document
- What you intend to accomplish
- Steps and resources to meet your objectives
- Extends 3 years out
- Current year then next 2
- What you intend to accomplish
- Future-focused companies are the ones that continue to prosper
- Formalized planning process
- Detailed marketing plan
- Market intelligence gathering system
- Loan package
- Step 3 – Loan Package Preparation and Research
- Selling document
- Understand your future
- Where you’ve come from, are now and are going
- Address potential challenges
- How you will deal with adversity
- Define your mission
- Vision of what the business can accomplish
- Bankers are conservative and analytical
- Loan officer processes loan application
- Makes recommendations to the credit manager and loan committee
- The right package = easier for the loan officer
- Credit Manager
- Focus is crunching financial numbers
- More information you present, more the credit manager will work with you
- Give them everything up front
- Table of Contents
- Executive Summary
- Company’s mission
- How opportunities result in increased earnings and profits
- The Industry
- The Company
- History and Major Accomplishments
- Divisions, Offices and Shop Locations
- Market Niche and Competitors
- Marketing Plan
- Clients
- Expansion Plans
- Company Values or Mission Statement
- Profit Centers and Product Lines
- Management and Ownership
- Brief biography of each of the key people
- Financial Information
- Purpose of Loan / Loan Request
- Also in executive summary
- Exhibits
- Executive Summary
- Selling document
- Step 4 – Searching for the Right Banks
- Shop at least 10 banks
- Find the red flags
- Explain what has occurred and how you are addressing it
- Summary