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Rockefeller Habits by Verne Harnish

What is Brand Strategy
January 30, 2017
Start-ups and patent protection
February 2, 2017

What are the Rockefeller Habits?

Harnish created the “Rockefeller Habits” based on leadership principles used by John D. Rockefeller, the famous founder of Standard Oil who’s often regarded as the most successful business person in U.S. history. The habits are deemed essential for virtually any scaling organization, and in particular for ambitious entrepreneurial firms seeking hyper-growth and industry dominance. As Forbes writer Scott Allison put it:
“Those are companies where a month or a quarter is more like a year for a regular business. When you’re growing that fast you need some guiding principles, or rules to run by.”
Those guiding principles come to life in Harnish’s checklist. It provides a framework for routinizing important practices that together can align an entire organization around a common mission and vision. If you haven’t read Harnish’s book, I highly recommend it. In addition to key insights for employee engagement and customer success, you’ll come away with greater confidence in clearly communicating your company’s vision and goals. As you work toward conquering the checklist, there are several techniques that make it easier to adopt the most important habits.


What the book has done is confirm three underlying habits that are key to the successful management of a business. Priorities — Does the organization have objective Top 5 priorities for the year and the quarter (the month if growing over 100% annually) and a clear Top 1 priority along with an appropriate Theme? Does everyone in the organization have their own handful of priorities that align with the company’s priorities?
Data — Does the organization have sufficient data on a daily and weekly basis to provide insight into how the organization is running and what the market is demanding? Does everyone in the organization have at least one key daily or weekly metric driving his or her performance?
Rhythm — Does the organization have an effective rhythm of daily, weekly, monthly, quarterly, and annual meetings to maintain alignment and drive accountability? Are the meetings well run and useful?
Identify the chokepoint in your business model and industry and then gain control of that chokepoint.
For Rockefeller, the key to winning in the oil business was gaining an advantage in transportation costs, which is why he was heavily involved with the railroads. Even what appeared to be minor decisions aligned with his focus on transportation costs. When he decided to vertically integrate further by producing his own oak barrels; rather than bring in green timber like his competitors, he had the oak sawed in the woods then kiln dried, reducing their weight and slicing transportation costs in half.
If we now go back and look at the three sets of fundamentals outlined in this overview, we find they integrate nicely (and the rest of ’ the book provides the “how to” for doing this):
1. Priorities — there are a handful of rules, some of which don’t change much like the core values of the firm and the long-term Big Hairy Audacious Goal (BHAG) and others that change every quarter and every week, what Verne Harnish calls the Top 5 and Top 1 of 5. It’s the balance of short term and long term.
2. Data — in order to know if you’re acting consistent to your priorities you need feedback in terms of real time data. There are key metrics within the business that you’ want to measure over an extended period of time, called Smart Numbers; and there are met-” rics that provide a short-term laser focus on an aspect of the business or someone’s job called a Critical Number. It’s the balance of short term and long term.
3. Rhythm — until your people are “mocking” you, you’ve not repeated your message enough. A well-organized set of daily, weekly, monthly, quarterly and annual meetings keep everyone aligned and accountable. And the agendas for each provide the necessary balance between the short term and long term. What this book will do is provide you some tools for making these simple decisions and then give you the tools for keeping everyone aligned and accountable to those decisions.
The source of this article is the summary of the book: "Mastering the Rockefeller Habits" by Verne Harnish. We encourage everyone to read this book. It is one of the bestsellers, not without reason. Buy this book