Mastering the Rockefeller Habits

"Until your people start mimicking you, you haven't repeated your message enough."

— Verne Harnish

Harnish founded the Entrepreneurs' Organization, the global network of founders of growth companies, and for fifteen years chaired its flagship program for CEOs, taught with MIT. He then created Gazelles, an executive education and coaching firm. In the late nineties he read Titan, Ron Chernow's biography of John D. Rockefeller, and found there three practices with which the founder of Standard Oil ran his company, and which he had also seen in the best companies he advised: priorities, data and rhythm.

When a company grows, what used to be solved in a hallway conversation stops working. People arrive who don't know the history, the founders are no longer in every decision and priorities get diluted. Harnish proposes building a simple structure that repeats, instead of depending on the heroic effort of a few.

The method is three disciplines:

• Priorities. Some don't change, like the values and the big long-term goal. Others change every quarter: the five priorities of the period and, among them, the number one. An organization with too many priorities has none.
• Data. To know whether you're acting according to your priorities you need real-time feedback. There are indicators tracked over a long time and a critical number attacked during a quarter. Feedback from customers and employees is reported as often as the financials.
• Rhythm. Daily, weekly, monthly, quarterly and annual meetings, each with its agenda, to keep everyone aligned and accountable. The most visible piece is the daily team huddle, a few minutes long, to review numbers and unblock whatever is stuck.

To land them, the book offers two tools. The one-page strategic plan brings together values, purpose, three- and five-year goals, priorities for the year and the quarter on a single sheet everyone can read. And the list of ten habits serves as a diagnostic:

• The leadership team is healthy and aligned.
• Everyone knows the most important thing to accomplish this quarter.
• Information flows fast and accurately.
• Every area has someone accountable for its goals.
• Employee input is gathered to find obstacles and opportunities.
• Customer feedback is analyzed with the same rigor as the financials.
• Values and purpose are alive in the organization.
• Employees can explain the strategy precisely.
• Every person can say with numbers whether they had a good day or a good week.
• Plans and performance are visible to everyone.

Harnish illustrates the power of priorities with a story from the early twentieth century. The consultant Ivy Lee asked Charles Schwab, president of Bethlehem Steel, to write down the six most important tasks for the next day in order, to work on the first until finishing it and then move to the second, without worrying if by day's end he had finished only one or two. He told him to try it with his team and pay him whatever he thought it was worth. Two weeks later, Schwab sent him a check for $25,000 and a note saying it was the most profitable lesson he had ever learned.

The common mistake is adopting the meetings without the discipline. A daily huddle that turns into an activity report, or a one-page plan nobody reviews after January, becomes bureaucracy. The value lies in repetition: the same agendas, the same day, every week.

A simple place to begin: define with your leadership team this quarter's number-one priority and a critical number that measures it. Starting Monday, hold a fifteen-minute daily huddle, at the same time, with three questions for each person: what's new, how are my numbers and where am I stuck.

As a founder it will help you keep your company aligned when you can no longer be in every conversation, and help the team know every day whether it's winning or losing.